<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended September 30, 2004

                                       or

[ ]   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.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

              Bermuda                                       98-0416483
 (State or other jurisdiction                  (IRS Employer Identification No.)
of incorporation or organization)

         The Belvedere Building
           69 Pitts Bay Road
           Pembroke, Bermuda                                    HM 08
(Address of principal executive offices)                      (Zip Code)

                                 (441) 295-7195
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
-------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

      As of October 31, 2004, there were outstanding 43,021,657 common shares,
par value $0.01 per share, of the registrant.

<PAGE>

                      PLATINUM UNDERWRITERS HOLDINGS, LTD.
     QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2004

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                      Page
                                                                                                                      ----
<S>                                                                                                                   <C>
PART I  -  FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

        Consolidated Balance Sheets as of September 30, 2004 (Unaudited) and
          December 31, 2003........................................................................................     1

        Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September
          30, 2004 and 2003 (Unaudited)............................................................................     2

        Consolidated Statements of Changes in Shareholders' Equity for the Nine Months
          Ended September 30, 2004 and 2003 (Unaudited)............................................................     3

        Consolidated Statements of Cash Flows for the Nine Months Ended
          September 30, 2004 and 2003 (Unaudited)..................................................................     4

        Notes to Condensed Consolidated Financial Statements (Unaudited) for the
          Three and Nine Months Ended September 30, 2004 and 2003..................................................     5

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three and
          Nine Months Ended September 30, 2004 and 2003............................................................    13

Item 3. Quantitative and Qualitative Disclosures about Market Risk.................................................    33

Item 4. Controls and Procedures....................................................................................    34

PART II  -  OTHER INFORMATION

Item 1. Legal Proceedings..........................................................................................    36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds................................................    36

Item 6. Exhibits...................................................................................................    36

SIGNATURES.........................................................................................................    37
</TABLE>

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

                           Consolidated Balance Sheets
                       ($ in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                    (Unaudited)
                                                                                    September 30,   December 31,
                                                                                        2004            2003
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
                                     ASSETS
Investments:
   Fixed maturities available-for-sale, at fair value
     (amortized cost - $2,045,281 and $1,560,807, respectively)                      $2,064,718      $1,583,505
   Fixed maturities - trading, at fair value
     (amortized cost - $81,689 and $95,926, respectively)                                80,617          94,633
   Other invested asset                                                                   6,628           6,910
                                                                                     ----------      ----------
         Total investments                                                            2,151,963       1,685,048
Cash and cash equivalents                                                               222,347         105,461
Accrued investment income                                                                26,613          17,492
Reinsurance premiums receivable                                                         638,463         487,441
Reinsurance recoverable on ceded losses and loss adjustment expenses                      2,163           5,102
Prepaid reinsurance premiums                                                              3,013           6,129
Funds held by ceding companies                                                           85,780          65,060
Deferred acquisition costs                                                              142,000          79,307
Income tax recoverable                                                                        -           9,360
Deferred tax assets                                                                      10,433               -
Other assets                                                                             11,538          21,461
                                                                                     ----------      ----------
         Total assets                                                                $3,294,313      $2,481,861
                                                                                     ==========      ==========
                   LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Unpaid losses and loss adjustment expenses                                        $1,222,364      $  736,934
   Unearned premiums                                                                    537,251         305,985
   Reinsurance deposit liabilities                                                       23,210           5,699
   Debt obligations                                                                     137,500         137,500
   Ceded premiums payable                                                                 3,851           6,205
   Commissions payable                                                                  220,902         176,310
   Funds withheld                                                                        22,487               -
   Deferred taxes                                                                         9,111           1,792
   Other liabilities                                                                     29,108          44,233
                                                                                     ----------      ----------
         Total liabilities                                                            2,205,784       1,414,658
                                                                                     ----------      ----------
Shareholders' Equity:
   Preferred shares, $.01 par value, 25,000,000 shares authorized, no shares
     issued or outstanding                                                                    -               -
   Common shares, $.01 par value, 200,000,000 shares authorized, 43,017,657 and
     43,054,125 shares issued and outstanding, respectively                                 430             430
   Additional paid-in capital                                                           909,658         910,505
   Accumulated other comprehensive income                                                16,446          18,774
   Retained earnings                                                                    161,995         137,494
                                                                                     ----------      ----------
         Total shareholders' equity                                                   1,088,529       1,067,203
                                                                                     ----------      ----------
         Total liabilities and shareholders' equity                                  $3,294,313      $2,481,861
                                                                                     ==========      ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -1-

<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

     Consolidated Statements of Income and Comprehensive Income (Unaudited)
         For the Three and Nine Months Ended September 30, 2004 and 2003

                    ($ in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                       Three Months Ended             Nine Months Ended
                                                                          September 30,                  September 30,
                                                                    ------------------------       ------------------------
                                                                      2004            2003            2004            2003
                                                                    ---------       --------       ---------       --------
<S>                                                                 <C>             <C>            <C>             <C>
Revenue:
   Net premiums earned                                              $ 383,090        272,265       1,014,999       $789,711
   Net investment income                                               21,429         14,780          58,290         42,414
   Net realized gains on investments                                    2,262          1,508           1,435          2,771
   Other income                                                         1,021            544           2,137          4,444
                                                                    ---------       --------       ---------       --------
         Total revenue                                                407,802        289,097       1,076,861        839,340
                                                                    ---------       --------       ---------       --------
Expenses:
   Losses and loss adjustment expenses                                384,724        157,208         736,159        452,813
   Acquisition expenses                                                81,271         60,408         232,886        172,503
   Operating expenses                                                  15,400         18,499          53,436         71,663
   Net foreign currency exchange (gains) losses                          (628)        (1,356)           (326)         3,456
   Interest expense                                                     2,322          2,444           6,952          7,150
                                                                    ---------       --------       ---------       --------
         Total expenses                                               483,089        237,203       1,029,107        707,585
                                                                    ---------       --------       ---------       --------
         Income (loss) before income tax expense (benefit)            (75,287)        51,894          47,754        131,755
Income tax expense (benefit)                                           (5,535)        14,077          12,893         36,747
                                                                    ---------       --------       ---------       --------
         Net income (loss)                                          $ (69,752)        37,817          34,861       $ 95,008
                                                                    =========       ========       =========       ========
Earnings per share:
   Basic earnings per share                                         $   (1.62)          0.88            0.81       $   2.21
   Diluted earnings per share                                       $   (1.62)          0.81            0.78       $   2.04

Comprehensive income (loss):
   Net income (loss)                                                $ (69,752)        37,817          34,861       $ 95,008
   Other comprehensive income:
     Net change in unrealized gains (losses) on
       available-for-sale securities, net of deferred taxes            31,147        (11,984)         (2,036)        16,008
     Cumulative translation adjustments, net of deferred taxes           (140)             -            (292)             -
                                                                    ---------       --------       ---------       --------
         Comprehensive income (loss)                                $ (38,745)        25,833          32,533       $111,016
                                                                    =========       ========       =========       ========
Shareholder dividends:
   Dividends declared                                               $   3,435          3,443          10,360       $ 10,323
   Dividends declared per share                                     $    0.08           0.08            0.24       $   0.24
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -2-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

     Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
              For the Nine Months Ended September 30, 2004 and 2003

                                ($ in thousands)

<TABLE>
<CAPTION>
                                                                          Nine Months Ended
                                                                            September 30,
                                                                    -----------------------------
                                                                       2004              2003
                                                                    -----------       -----------
<S>                                                                 <C>               <C>
Preferred shares:
   Balances at beginning and end of period                          $         -       $         -
                                                                    -----------       -----------
Common shares:
   Balances at beginning of period                                          430               430
   Exercise of share options                                                  2                 -
   Issuance of common shares                                                  1                 -
   Purchase of common shares                                                 (3)                -
                                                                    -----------       -----------
         Balances at end of period                                          430               430
                                                                    -----------       -----------
Additional paid-in-capital:
   Balances at beginning of period                                      910,505           903,797
   Exercise of share options                                              5,834                 -
   Share based compensation                                               1,736             4,547
   Issuance of common shares                                              1,565               520
   Purchase of common shares                                             (9,982)                -
                                                                    -----------       -----------
         Balances at end of period                                      909,658           908,864
                                                                    -----------       -----------
Accumulated other comprehensive income (loss):
   Balances at beginning of period                                       18,774            10,581
   Net change in unrealized gains and losses on available-for-
     sale securities, net of deferred taxes                              (2,036)           16,008
   Net change in cumulative translation adjustments, net of
     deferred tax                                                          (292)                -
                                                                    -----------       -----------
         Balances at end of period                                       16,446            26,589
                                                                    -----------       -----------
Retained earnings:
   Balances at beginning of period                                      137,494             6,438
   Net income                                                            34,861            95,008
   Dividends paid to shareholders                                       (10,360)          (10,323)
                                                                    -----------       -----------
         Balances at end of period                                      161,995            91,123

                                                                    -----------       -----------
         Total shareholders' equity                                 $ 1,088,529       $ 1,027,006
                                                                    ===========       ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -3-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

                Consolidated Statement of Cash Flows (Unaudited)
              For the Nine Months Ended September 30, 2004 and 2003

                                ($ in thousands)

<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                                 -------------------------
                                                                                   2004            2003
                                                                                 ---------       ---------
<S>                                                                              <C>             <C>
Operating Activities:
   Net income                                                                    $  34,861       $  95,008
   Adjustments to reconcile net income to cash used in operations:
     Depreciation and amortization                                                  15,676          16,524
     Net realized gains on investments                                              (1,435)         (2,771)
     Net foreign currency exchange (gains) losses                                     (326)          3,456
     Share based compensation                                                        1,736           4,547
     Trading securities activities                                                  13,026               -
     Changes in assets and liabilities:
       Increase in accrued investment income                                        (9,121)        (11,367)
       Increase in reinsurance premiums receivable                                (151,022)       (472,685)
       Decrease in amounts receivable from St. Paul                                      -          54,553
       Increase in funds held by ceding companies                                  (20,720)         (3,618)
       Increase in deferred acquisition costs                                      (62,693)        (39,730)
       Increase in net unpaid losses and loss adjustment expenses                  488,814         372,855
       Increase in net unearned premiums                                           234,382         160,735
       Increase (decrease) in reinsurance deposit liabilities                       17,511         (17,871)
       Increase (decrease) in ceded premiums payable                                (2,354)         10,505
       Increase in commissions payable                                              44,592         118,162
       Increase in funds withheld                                                   22,487               -
       Changes in other assets and liabilities                                      (2,051)         10,472
   Cash from St. Paul related to the November 1, 2002 assumption of
     liabilities on reinsurance contracts becoming effective in 2002                     -         108,336
   Other net                                                                          (193)              -
                                                                                 ---------       ---------
         Net cash provided by operating activities                                 623,170         407,111
                                                                                 ---------       ---------
Investing Activities:
   Proceeds from sale of available-for-sale fixed maturities                       307,551         346,782
   Proceeds from maturity or paydown of available-for-sale fixed maturities        117,117         114,006
   Acquisition of available-for-sale fixed maturities                             (916,443)       (996,129)
                                                                                 ---------       ---------
         Net cash used in investing activities                                    (491,775)       (535,341)
                                                                                 ---------       ---------
Financing Activities:
   Dividends paid to shareholders                                                  (10,360)        (10,323)
   Proceeds from exercise of share options                                           5,836               -
   Proceeds from issuance of common shares                                               -             520
   Purchase of common shares                                                        (9,985)              -
                                                                                 ---------       ---------
         Net cash used in financing activities                                     (14,509)         (9,803)
                                                                                 ---------       ---------
         Net increase (decrease) in cash and cash equivalents                      116,886        (138,033)
Cash and cash equivalents at beginning of period                                   105,461         281,486
                                                                                 ---------       ---------
Cash and cash equivalents at end of period                                       $ 222,347       $ 143,453
                                                                                 =========       =========
Supplemental disclosures of cash flow information:
   Income taxes paid                                                             $   2,533       $  25,797
   Interest paid                                                                 $   7,219       $   7,620
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -4-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

        Notes to Condensed Consolidated Financial Statements (Unaudited)
         For the Three and Nine Months Ended September 30, 2004 and 2003

(1)   BASIS OF PRESENTATION

      The condensed consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America ("U.S. GAAP") and include the accounts of Platinum Underwriters
Holdings, Ltd. and its subsidiaries (the "Company"), including Platinum Re (UK)
Limited ("Platinum UK"), Platinum Underwriters Bermuda, Ltd., Platinum
Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Underwriters Finance,
Inc., Platinum Regency Holdings, and Platinum Administrative Services, Inc. All
material inter-company transactions have been eliminated in preparing these
consolidated financial statements. The condensed consolidated financial
statements included in this report as of and for the three and nine months ended
September 30, 2004 and 2003 are unaudited and include those adjustments,
consisting of normal recurring items that management considers necessary for a
fair presentation under U.S. GAAP. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and
related notes included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2003.

      The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could materially differ from these
estimates. The results of operations for any interim period are not necessarily
indicative of results for the full year.

      In November 2002, Platinum Underwriters Holdings, Ltd. ("Platinum
Holdings") completed an initial public offering of 33,044,000 common shares.
Concurrent with the public offering, Platinum Holdings sold 6,000,000 common
shares to The St. Paul Travelers Companies, Inc., formerly The St. Paul
Companies, Inc., ("St. Paul") and 3,960,000 common shares to RenaissanceRe
Holdings Ltd. ("RenaissanceRe") in private placements. In addition to the common
shares issued, the Company issued Equity Security Units, consisting of a
contract to purchase common shares in 2005 and an ownership interest in a senior
note due 2007. Also, concurrent with these transactions, the Company and St.
Paul entered into several agreements for the transfer of continuing reinsurance
business and certain related assets of St. Paul. Among these agreements were
quota share retrocession agreements effective November 2, 2002 under which the
Company assumed from St. Paul unpaid losses and loss adjustment expenses
("LAE"), unearned premiums and certain other liabilities on reinsurance
contracts becoming effective in 2002 (the "Quota Share Retrocession
Agreements"). St. Paul subsequently sold 6,000,000 common shares as described in
Note (6).

Share Based Compensation

      The Company adopted Statement of Financial Accounting Standards No. 123
"Accounting for Awards of Stock Based Compensation to Employees" ("SFAS 123")
and Statement of Financial Accounting Standards No. 148 "Accounting for
Stock-Based Compensation-Transition and Disclosure" ("SFAS 148") effective
January 1, 2003. SFAS 123 requires that the fair value of share options granted
under the Company's share option plan subsequent to the adoption of SFAS 148 be
amortized in earnings over the vesting periods. The fair value of the share
options granted is determined through the use of an option-pricing model. SFAS
148 amends SFAS 123 and provides transitioning guidance for a voluntary adoption
of FAS 123 as well as amends the disclosure requirements of SFAS 123. Prior to
the adoption of SFAS 123, the Company elected to use the intrinsic value method
of accounting for its share based

                                      -5-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

awards granted to employees established by Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and continues to
use the intrinsic method for share options granted in 2002. Under APB 25, if the
exercise price of the Company's employee share options is equal to or greater
than the fair market value of the underlying shares on the date of the grant, no
compensation expense is recorded.

      Had the Company calculated and recorded compensation expense for all share
option grants based on the "fair value" method described in SFAS 123, net income
and earnings per share, net of tax, would have been the pro forma amounts for
the three and nine months ended September 30, 2004 and 2003 as indicated below
($ in thousands, except per share data):

<TABLE>
<CAPTION>
                                            Three Months Ended             Nine Months Ended
                                               September 30,                 September 30,
                                       --------------------------      -------------------------
                                          2004             2003          2004           2003
                                       ----------       ---------      ---------      ----------
<S>                                    <C>              <C>            <C>            <C>
Share based compensation expense:
   As reported                         $      649             208          1,736      $    4,547
   Pro forma                                1,855           1,798          5,200          13,273
Net income (loss):
   As reported                            (69,752)         37,817         34,861          95,008
   Pro forma                              (70,958)         36,227         31,397          86,282
Basic earnings per share:
   As reported                              (1.62)           0.88           0.81            2.21
   Pro forma                                (1.66)           0.84           0.72            2.01
Diluted earnings per share:
   As reported                              (1.62)           0.81           0.78            2.04
   Pro forma                           $    (1.66)           0.77           0.71      $     1.86
</TABLE>

Reclassifications

      Certain reclassifications have been made to the 2003 financial statements
in order to conform to the 2004 presentation.

(2)   INVESTMENTS

      Investments classified as available-for-sale are carried at fair value as
of the balance sheet date. Net change in unrealized investment gains for the
nine months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                           September 30,
                                                      ----------------------
                                                        2004          2003
                                                      -------       --------
<S>                                                   <C>           <C>
Fixed maturities                                      $(3,261)      $ 20,913
Less - deferred taxes                                   1,225         (4,905)
                                                      -------       --------
         Net change in unrealized gains (losses)      $(2,036)      $ 16,008
                                                      -------       --------
</TABLE>

                                      -6-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

      Gross unrealized gains and losses on available-for-sale fixed maturities
as of September 30, 2004 were $24,764,000 and $5,327,000, respectively. The
unrealized losses of fixed maturities available-for-sale are aggregated by
investment category and length of time that individual securities have been in a
continuous unrealized loss position and are as follows:

<TABLE>
<CAPTION>
                                                              Unrealized
                                                 Fair Value      Loss
                                                 ----------   ----------
<S>                                              <C>          <C>
Less than twelve months:
U.S. Government and U.S. Government agencies      $ 79,185      $  367
Corporate bonds                                    253,295       2,570
Mortgage and asset backed securities                24,141         630
Municipal bonds                                     47,317         603
Foreign governments and states                      11,533          90
                                                  --------      ------
         Total                                     415,471       4,260
                                                  --------      ------
Twelve months or more:
U.S. Government and U.S. Government agencies        34,523         509
Corporate bonds                                     10,665         361
Redeemable preferred stocks                          3,553         197
                                                  --------      ------
         Total                                      48,741       1,067
                                                  --------      ------
Total of securities with unrealized losses:
U.S. Government and U.S. Government agencies       113,708         876
Corporate bonds                                    263,960       2,931
Mortgage and asset backed securities                24,141         630
Municipal bonds                                     47,317         603
Foreign governments and states                      11,533          90
Redeemable preferred stocks                          3,553         197
                                                  --------      ------
         Total                                    $464,212      $5,327
                                                  --------      ------
</TABLE>

      Management believes that the unrealized losses on fixed maturities are
related to interest rate changes and do not represent other credit impairments.

      Investments with a carrying value of $358,780,000 and cash and cash
equivalents of $24,508,000 at September 30, 2004 were held in trust to secure
liabilities under various reinsurance agreements.

                                      -7-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

(3)   EARNINGS PER SHARE

      Following is a reconciliation of the basic and diluted earnings per share
computations for the three and nine months ended September 30, 2004 and 2003 ($
in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                         Average
                                                             Net         Shares      Earnings
                                                           Income      Outstanding   Per Share
                                                          --------     -----------   ---------
<S>                                                       <C>          <C>           <C>
Three Months Ended September 30, 2004:
Basic loss per share:
   Loss available to common shareholders                  $(69,752)      43,127       $ (1.62)

Three Months Ended September 30, 2003:
Basic earnings per share:
   Income available to common shareholders                $ 37,817       43,022       $  0.88

Effect of dilutive securities:
   Share options                                                 -          767
   Interest expense related to Equity Security Units         1,628            -
   Common share conversion of Equity Security Units              -        5,087

Diluted earnings per share:
                                                          --------       ------
   Income available to common shareholders                $ 39,445       48,876       $  0.81
                                                          --------       ------
Nine Months Ended September 30, 2004:
Basic earnings per share:
   Income available to common shareholders                $ 34,861       43,186       $  0.81

Effect of dilutive securities:
   Share options                                                 -        2,227
   Interest expense related to Equity Security Units         4,577            -
   Common share conversion of Equity Security Units              -        5,009
Diluted earnings per share:
                                                          --------       ------
   Income available to common shareholders                $ 39,438       50,422       $   0.78
                                                          --------       ------
</TABLE>

                                      -8-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                         Average
                                                             Net         Shares      Earnings
                                                           Income      Outstanding   Per Share
                                                          --------     -----------   ---------
<S>                                                       <C>          <C>           <C>
Nine Months Ended September 30, 2003:
Basic earnings per share:
   Income available to common shareholders                $ 95,008       43,012       $   2.21

Effect of dilutive securities:
   Share options                                                 -          572
   Interest expense related to Equity Security Units         4,743            -
   Common share conversion of Equity Security Units              -        5,320
                                                          --------       ------
Diluted earnings per share:
   Income available to common shareholders                $ 99,751       48,904       $   2.04
                                                          --------       ------
</TABLE>

(4)   OPERATING SEGMENT INFORMATION

      The Company conducts its worldwide reinsurance business through three
operating segments: Property and Marine, Casualty and Finite Risk. The Property
and Marine operating segment includes principally property and marine
reinsurance coverages that are written in the United States and international
markets. This business includes property per-risk excess-of-loss treaties,
property proportional treaties and catastrophe excess-of-loss reinsurance
treaties. The Casualty operating segment includes principally reinsurance
treaties that cover umbrella liability, general and product liability,
professional liability, directors and officers liability, workers' compensation,
casualty clash, automobile liability, trade credit and surety. This segment also
includes accident and health reinsurance treaties, which are predominantly
reinsurance of health insurance products. The Finite Risk operating segment
includes principally structured reinsurance contracts with ceding companies
whose needs may not be met efficiently through traditional reinsurance products.
The Company focuses on providing such clients with customized solutions.

      In managing the Company's operating segments, management uses measures
such as underwriting income and underwriting ratios to evaluate segment
performance. Management does not allocate by segment its assets or certain
income and expenses such as investment income, interest expense and certain
corporate expenses. Segment underwriting income is reconciled to income before
income tax expense (benefit). The measures used by management in evaluating the
Company's operating segments should not be used as a substitute for measures
determined under U.S. GAAP. The following table summarizes underwriting activity
and ratios for the operating segments together with a reconciliation of
underwriting income to income before income tax expense (benefit) for the three
and nine months ended September 30, 2004 and 2003 ($ in thousands):

                                      -9-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                                  Property
                                                                 and Marine       Casualty     Finite Risk         Total
                                                                 ----------       --------     -----------      -----------
<S>                                                              <C>              <C>          <C>              <C>
Three months ended September 30, 2004:
Net premiums written                                             $ 120,629        171,967        147,899        $   440,495
                                                                 ---------        -------        -------        -----------
Net premiums earned                                                135,430        156,512         91,148            383,090
Losses and LAE                                                     195,495        105,559         83,670            384,724
Acquisition expenses                                                20,834         38,935         21,502             81,271
Other underwriting expenses                                          5,956          5,617            661             12,234
                                                                 ---------        -------        -------        -----------
   Segment underwriting loss                                     $ (86,855)         6,401        (14,685)       $   (95,139)
                                                                 ---------        -------        -------
Corporate expenses not allocated to segments                                                                         (3,166)
Net foreign currency exchange gains                                                                                     628
Interest expense                                                                                                     (2,322)
Other income                                                                                                          1,021
Net investment income and net realized gains on investments                                                          23,691
                                                                                                                -----------
   Loss before income tax benefit                                                                               $   (75,287)
                                                                                                                -----------
Ratios:
   Losses and LAE                                                    144.4%          67.4%          91.8%             100.4%
   Acquisition expense                                                15.4%          24.9%          23.6%              21.2%
   Other underwriting expense                                          4.4%           3.6%           0.7%               3.2%
                                                                 ---------        -------        -------        -----------
         Combined                                                    164.2%          95.9%         116.1%             124.8%
                                                                 ---------        -------        -------        -----------
Three months ended September 30, 2003:
Net premiums written                                             $  77,114        134,991         69,211        $   281,316
                                                                 ---------        -------        -------        -----------
Net premiums earned                                                 81,113        106,298         84,854            272,265
Losses and LAE                                                      41,237         71,052         44,919            157,208
Acquisition expenses                                                 9,930         29,465         21,013             60,408
Other underwriting expenses                                          7,412          5,065          2,616             15,093
                                                                 ---------        -------        -------        -----------
   Segment underwriting income                                   $  22,534            716         16,306        $    39,556
                                                                 ---------        -------        -------
Corporate expenses not allocated to segments                                                                         (3,406)
Net foreign currency exchange gains                                                                                   1,356
Interest expense                                                                                                     (2,444)
Other income                                                                                                            544
Net investment income and net realized gains on investments                                                          16,288
                                                                                                                -----------
   Income before income tax expense                                                                             $    51,894
                                                                                                                -----------
Ratios:
   Losses and LAE                                                     50.8%          66.8%          52.9%              57.7%
   Acquisition expense                                                12.2%          27.7%          24.8%              22.2%
   Other underwriting expense                                          9.1%           4.8%           3.1%               5.5%
                                                                 ---------        -------        -------        -----------
         Combined                                                     72.1%          99.3%          80.8%              85.4%
                                                                 ---------        -------        -------        -----------
</TABLE>

                                      -10-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                                  Property
                                                                 and Marine       Casualty     Finite Risk         Total
                                                                 ----------       --------     -----------      -----------
<S>                                                              <C>              <C>          <C>              <C>
Nine months ended September 30, 2004:
Net premiums written                                             $ 393,764        508,693        348,671        $ 1,251,128
                                                                 ---------        -------        -------        -----------
Net premiums earned                                                353,423        424,964        236,612          1,014,999
Losses and LAE                                                     285,047        293,734        157,378            736,159
Acquisition expenses                                                57,491        105,765         69,630            232,886
Other underwriting expenses                                         21,280         15,979          5,825             43,084
                                                                 ---------        -------        -------        -----------
   Segment underwriting income                                   $ (10,395)         9,486          3,779        $     2,870
                                                                 ---------        -------        -------
Corporate expenses not allocated to segments                                                                        (10,352)
Net foreign currency exchange gains                                                                                     326
Interest expense                                                                                                     (6,952)
Other income                                                                                                          2,137
Net investment income and net realized gains on investments                                                          59,725
                                                                                                                -----------
   Income before income tax expense                                                                             $    47,754
                                                                                                                -----------
Ratios:
   Losses and LAE                                                     80.7%          69.1%          66.5%              72.5%
   Acquisition expense                                                16.3%          24.9%          29.4%              22.9%
   Other underwriting expense                                          6.0%           3.8%           2.5%               4.2%
                                                                 ---------        -------        -------        -----------
         Combined                                                    103.0%          97.8%          98.4%              99.6%
                                                                 ---------        -------        -------        -----------
Nine months ended September 30, 2003:
Net premiums written                                             $ 278,369        381,005        289,277        $   948,651
                                                                 ---------        -------        -------        -----------
Net premiums earned                                                265,052        289,975        234,684            789,711
Losses and LAE                                                     135,292        199,489        118,032            452,813
Acquisition expenses                                                38,734         74,943         58,826            172,503
Other underwriting expenses                                         28,243         14,225          9,485             51,953
                                                                 ---------        -------        -------        -----------
   Segment underwriting income                                   $  62,783          1,318         48,341        $   112,442
                                                                 ---------        -------        -------
Corporate expenses not allocated to segments                                                                        (19,710)
Net foreign currency exchange losses                                                                                 (3,456)
Interest expense                                                                                                     (7,150)
Other income                                                                                                          4,444
Net investment income and net realized gains on investments                                                          45,185
                                                                                                                -----------
   Income before income tax expense                                                                             $   131,755
                                                                                                                -----------
Ratios:
   Losses and LAE                                                     51.0%          68.8%          50.3%              57.3%
   Acquisition expense                                                14.6%          25.8%          25.1%              21.8%
   Other underwriting expense                                         10.7%           4.9%           4.0%               6.6%
                                                                 ---------        -------        -------        -----------
         Combined                                                     76.3%          99.5%          79.4%              85.7%
                                                                 ---------        -------        -------        -----------
</TABLE>

                                      -11-
<PAGE>

              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES

   Notes to Condensed Consolidated Financial Statements (Unaudited), continued
         For the Three and Nine Months Ended September 30, 2004 and 2003

(5)   HURRICANES CHARLEY, FRANCES, IVAN AND JEANNE

      In late August and September of 2004, there were four significant named
hurricanes, Charley, Frances, Ivan and Jeanne (the "Hurricanes"), that caused
severe damage in the Caribbean and the southeast United States. As a result of
losses arising from these catastrophic events, certain reinsurance contracts
generated additional premiums. Further, previously accrued profit commissions
for certain reinsurance contracts were reduced.

      The aggregate adverse impact on net income of the Company for the three
months and nine months ended September 30, 2004 from the Hurricanes is
summarized as follows ($ in thousands):

<TABLE>
<S>                                                        <C>
Gross losses                                               $ 186,457
Less:
   Additional premiums earned                                (19,895)
   Profit commissions                                        (10,350)
                                                           ---------
         Net adverse impact before income tax benefit        156,212
Income tax benefit                                           (11,403)
                                                           ---------
         Net adverse impact after income tax benefit       $ 144,809
                                                           ---------
</TABLE>

(6)   SHELF REGISTRATION STATEMENT AND SALE OF COMMON SHARES BY ST. PAUL

      The Company has filed an unallocated universal shelf registration
statement with the Securities and Exchange Commission ("SEC"), which the SEC
declared effective on April 5, 2004. The securities registered under the shelf
registration statement for possible future sales include up to $750,000,000 of
common shares, preferred shares and various types of debt securities. The
registration statement included common shares held by St. Paul and RenaissanceRe
and common shares issuable upon exercise of options owned by St. Paul and
RenaissanceRe. On June 25, 2004, the Company announced St. Paul's intent to sell
6,000,000 of the Company's common shares in an underwritten public offering,
which was effected pursuant to a prospectus supplement to the shelf registration
statement dated June 28, 2004 and completed on June 30, 2004. The Company did
not sell any common shares in the offering and did not receive any proceeds from
the sale of the common shares by St Paul. St. Paul continues to hold an option
to acquire 6,000,000 common shares of the Company. The 6,000,000 common shares
sold by St. Paul amounted to $177,330,000 of the securities registered under the
$750,000,000 shelf registration statement.

(7)   COMPANY COMMON SHARE BUYBACK

      On August 4, 2004, the board of directors of the Company approved a plan
to purchase up to $50,000,000 of its common shares. During the three months
ended September 30, 2004 the Company purchased 349,700 of its common shares in
the open market at an aggregate amount of $9,985,000 at a weighted average price
of $28.55 per share. The shares purchased by the Company were canceled.

(8)   SUBSEQUENT EVENT

      Effective January 1, 2004, Platinum US and Platinum UK entered into an
excess-of-loss retrocessional contract that provided the Company with up to $100
million of coverage. Premiums ceded under this contract vary depending on the
amount of the ceded losses under the contract and the severity of individual
loss events on the insurance industry. The Company evaluated the Hurricane
losses and the effect of the contract on the Company's results of operations for
the quarter ended September 30, 2004 and commuted the contract effective
November 8, 2004. Results for the three and nine months ended September 30, 2004
do not reflect any benefit from the contract.

                                      -12-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

BUSINESS OVERVIEW

      Platinum Underwriters Holdings, Ltd. ("Platinum Holdings") is a Bermuda
holding company organized in 2002. Platinum Holdings and its subsidiaries (the
"Company") operate through three licensed reinsurance subsidiaries: Platinum
Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Re (UK) Limited
("Platinum UK") and Platinum Underwriters Bermuda, Ltd. ("Platinum Bermuda").
The Company provides property and marine, casualty and finite risk reinsurance
coverages, through reinsurance intermediaries, to a diverse clientele of
insurers and select reinsurers on a worldwide basis.

      The following discussion and analysis should be read in conjunction with
the consolidated financial statements and related notes thereto and management's
discussion and analysis of financial condition and results of operations
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2003. The Company's consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP").

      In November 2002, Platinum Holdings completed an initial public offering
of 33,044,000 common shares. Concurrent with the public offering, Platinum
Holdings sold 6,000,000 common shares to The St. Paul Travelers Companies, Inc.,
formerly The St. Paul Companies, Inc., ("St. Paul"), and 3,960,000 common shares
to RenaissanceRe Holdings Ltd. ("RenaissanceRe") in private placements. In
addition to the common shares issued, the Company issued Equity Security Units,
consisting of a contract to purchase common shares in 2005 and an ownership
interest in a senior note due 2007. Also, concurrent with these transactions,
the Company and St. Paul entered into several agreements for the transfer of
continuing reinsurance business and certain related assets of St. Paul. Among
these agreements were quota share retrocession agreements effective November 2,
2002 under which the Company assumed from St. Paul unpaid losses and loss
adjustment expenses ("LAE"), unearned premiums and certain other liabilities on
reinsurance contracts becoming effective in 2002 (the "Quota Share Retrocession
Agreements"). St. Paul subsequently sold its 6,000,000 common shares.

      The Company writes property and casualty reinsurance. Property reinsurance
protects a ceding company against financial loss arising out of damage to
property or loss of its use caused by an insured peril. Examples of property
reinsurance are property catastrophe and property per-risk coverages. Property
catastrophe reinsurance protects a ceding company against losses arising out of
multiple claims for a single event while property per-risk reinsurance protects
a ceding company against loss arising out of a single claim for a single event.
Casualty reinsurance protects a ceding company against financial loss arising
out of the obligation to others for loss or damage to persons or property.
Examples of casualty reinsurance are reinsurance treaties that cover umbrella
liability, general and product liability, professional liability, directors and
officers liability, workers' compensation, casualty clash, automobile liability,
surety and trade credit. Casualty also includes accident and health reinsurance
treaties, which are predominantly reinsurance of health insurance products.

      The property and casualty reinsurance industry is highly competitive. The
Company competes with reinsurers worldwide, many of which have greater
financial, marketing and management resources. Large financial institutions
represent some of the Company's competitors, while others are specialty
reinsurance companies. Financial institutions have also created alternative
capital market products that compete with reinsurance products, such as
reinsurance securitization. The Company's principal

                                      -13-
<PAGE>

competitors vary by type of business. Bermuda-based reinsurers are significant
competitors on property catastrophe business. Lloyd's of London syndicates are
significant competitors on marine business. On international business, the large
European reinsurers are significant competitors.

      The reinsurance industry historically has been cyclical, characterized by
periods of price competition due to excessive underwriting capacity as well as
periods of favorable pricing due to shortages of underwriting capacity. Cyclical
trends in the industry and the industry's profitability can also be affected
significantly by volatile developments, including natural and other disasters,
such as hurricanes, windstorms, earthquakes, floods, fires, explosions and other
catastrophic events, including terrorist attacks, the frequency and severity of
which are inherently difficult to predict. Property and casualty reinsurance
rates often rise in the aftermath of significant catastrophe losses. As
liabilities are established to cover expected claims, the industry's capacity to
write new business diminishes. The industry is also affected by changes in the
propensity of courts to expand insurance coverage and grant large liability
awards, as well as fluctuations in interest rates, inflation and other changes
in the economic environment that affect market prices of investments.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2004 as Compared with the Three Months Ended
September 30, 2003

      Net income (loss) for the three months ended September 30, 2004 and 2003
was as follows ($ in thousands):

<TABLE>
<CAPTION>
                    Three Months Ended September 30,
                    --------------------------------
                      2004                     2003            Decrease
                    ---------                 ------           ----------
<S>                 <C>                       <C>              <C>
Net income (loss)   $(69,752)                 37,817           $(107,569)
</TABLE>

      The net loss in 2004 as compared with net income in 2003 is attributable
to the decline in underwriting income of $134,695,000, due primarily to the
combination of four significant named hurricanes, Charley, Frances, Ivan and
Jeanne (the "Hurricanes"), causing severe damage in the Caribbean and the
southeast United States. Partially offsetting the loss from the Hurricanes was
improved underwriting income from growth of profitable business in all segments.
Net income in 2004 as compared with 2003 was also impacted by an increase in
investment income of $6,649,000, a decline in operating expenses of $3,099,000,
and a reduction in income tax expense of $19,612,000 in 2004.

      The aggregate adverse impact on net income of the Company for the three
months and nine months ended September 30, 2004 from the Hurricanes is
summarized as follows:

<TABLE>
<S>                                                       <C>
Gross losses                                              $ 186,457
Less:
   Additional premiums earned                               (19,895)
   Profit commissions                                       (10,350)
                                                          ---------
         Net impact on underwriting                         156,212
Income tax benefit                                          (11,403)
                                                          ---------
         Net adverse impact after income tax benefit      $ 144,809
                                                          ---------
</TABLE>

                                      -14-
<PAGE>

      Net premiums written and net premiums earned for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                           Three Months Ended September 30,
                           --------------------------------
                             2004                     2003           Increase
                           --------                 -------          --------
<S>                        <C>                      <C>              <C>
Net premiums written       $440,495                 281,316          $159,179
Net premiums earned        $383,090                 272,265          $110,825
</TABLE>

      The increase in net premiums written in 2004 is attributable to growth in
all segments. The increase in net premium earned is related to the growth in
current and prior periods' net premiums written and is affected by changes in
the mix of business and the structure of the underlying reinsurance contracts.

      Net investment income for the three months ended September 30, 2004 and
2003 was $21,429,000 and $14,780,000, respectively. Net investment income
increased in 2004 primarily due to increased invested assets attributable to
positive cash flow from operations. Net realized gains on investments of
$2,262,000 and $1,508,000 for the three months ended September 30, 2004 and
2003, respectively, were the result of investment sales activity to manage the
credit quality and duration of the investment portfolio.

      Other income for the three months ended September 30, 2004 and 2003 was
$1,021,000 and $544,000, respectively. Other income includes net earnings on
several reinsurance contracts in the Finite Risk segment that are accounted for
as deposits. Other income in the three months ended September 30, 2004 also
includes $629,000 of net unrealized losses relating to changes in the fair value
of approximately $80,000,000 of fixed maturities classified as trading at
September 30, 2004. There were no fixed maturities classified as trading and no
unrealized gains or losses included in other income for the three months ended
September 30, 2003.

      Net foreign currency exchange gains for the three months ended September
30, 2004 and 2003 were $628,000 and $1,356,000, respectively. Foreign currency
exchange gains and losses result from the re-valuation into U.S. dollars of
assets and liabilities denominated in foreign currencies. The principal foreign
currencies re-valued into U.S. dollars are the British pound and euros. The
reduction in foreign currency exchange volatility in 2004 as compared with 2003
is due to steps taken to manage exposures to foreign currency exchange rate
fluctuations by holding invested assets in the same foreign currencies in which
the related net insurance assets and liabilities are denominated.

      Losses and LAE and the resulting loss ratios for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                             Three Months Ended September 30,
                             --------------------------------
                                2004                  2003           Increase
                             ----------              -------       ------------
<S>                          <C>                     <C>           <C>
Losses and LAE               $  384,724              157,208       $    227,516
Losses and LAE ratio              100.4%                57.7%       42.7 points
</TABLE>

      The increase in gross losses and LAE and related ratio in 2004 as compared
with 2003 is due primarily to losses of approximately $186,457,000 from the
Hurricanes, as compared with the low level of catastrophe losses in 2003. The
increase in losses and LAE in 2004 is also attributable to the growth in
business in all segments . Favorable loss development, primarily in the Property
and Marine segment, in 2004 and 2003 amounted to $16,100,000 and $16,000,000,
respectively.

                                      -15-
<PAGE>

      Acquisition expenses and resulting acquisition expense ratios for the
three months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                 Three Months Ended September 30,
                                 --------------------------------          Increase
                                    2004                    2003          (Decrease)
                                 ---------                 ------        -------------
<S>                              <C>                       <C>           <C>
Acquisition expenses             $  81,271                 60,408        $      20,863
Acquisition expense ratio             21.2%                  22.2%        (1.0) points
</TABLE>

      The increase in acquisition expenses is due primarily to the increase in
net premiums earned in 2004 as compared with 2003. The decrease in the
acquisition expense ratio in 2004 as compared with 2003 is primarily due to
changes in the mix of business.

      Operating expenses for the three months ended September 30, 2004 and 2003
were $15,400,000 and $18,499,000, respectively. Operating expenses include costs
such as salaries, rent and like items related to reinsurance operations as well
as costs associated with Platinum Holdings. Operating expenses for the three
months ended September 30, 2003 include approximately $1,363,000 of various
non-recurring start-up related costs.

      Interest expense for the three months ended September 30, 2004 and 2003
was $2,322,000 and $2,444,000, respectively, and relates to the Company's Equity
Security Units, which are classified as debt obligations on the Company's
balance sheet.

      Income tax expense (benefit) and the effective income tax rate for the
three months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                    Three Months Ended September 30,
                                    --------------------------------
                                      2004                    2003           Decrease
                                    --------                 -------         ---------
<S>                                 <C>                      <C>             <C>
Income tax expense (benefit)        $ (5,535)                14,077          $(19,612)
Effective income tax rate                7.4%                  27.1%
</TABLE>

      The income tax benefit in 2004 as compared with the income tax expense in
2003 is the result of losses from the Hurricanes in the three months ended
September 30, 2004, of which approximately 80% was incurred by Platinum Bermuda,
which is not subject to corporate income tax. During the three months ended
September 30, 2004 and as a result of losses from the Hurricanes, management
revised its estimate of the annual effective tax rate for 2004 to 27%.

Nine Months Ended September 30, 2004 as Compared with the Nine Months Ended
September 30, 2003

      Net income for the nine months ended September 30, 2004 and 2003 was as
follows ($ in thousands):

<TABLE>
<CAPTION>
                Nine Months Ended September 30,
                -------------------------------
                  2004                    2003           Decrease
                -------                  ------          ---------
<S>             <C>                      <C>             <C>
Net income      $34,861                  95,008          $(60,147)
</TABLE>

      The 63.3% decrease in net income in 2004 from 2003 is principally
attributable to the decline in underwriting income of $109,572,000 due to the
Hurricanes. The aggregate adverse impact on underwriting results for the nine
months ended September 30, 2004 from the Hurricanes is approximately
$156,212,000. Partially offsetting the loss from the Hurricanes was growth of
profitable business in all segments. Favorable development of losses was
$40,000,000 and $49,200,000 in 2004 and 2003,

                                      -16-
<PAGE>
respectively. Net income in 2004 as compared with 2003 was also impacted by an
increase in investment income of $15,876,000, a decline in operating expenses of
$18,227,000, and a reduction in income tax expense of $23,854,000 in 2004.

      Net premiums written and net premiums earned for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                            Nine Months Ended September 30,
                            -------------------------------
                               2004                  2003            Increase
                            ----------              -------          --------
<S>                         <C>                     <C>              <C>
Net premiums written        $1,251,128              948,651          $302,477
Net premiums earned         $1,014,999              789,711          $225,288
</TABLE>

      The increase in net premiums written and earned in 2004 as compared with
2003 is attributable to growth in all segments, and includes approximately
$19,895,000 of additional premiums related to losses arising from the
Hurricanes. The increase in net premiums earned is related to the growth in
current and prior periods' net premiums written and is affected by changes in
the mix of business and the structure of the underlying reinsurance contracts.

      Net investment income for the nine months ended September 30, 2004 and
2003 was $58,290,000 and $42,414,000, respectively. Net investment income
increased during 2004 primarily due to increased invested assets attributable to
positive cash flow from operations, excluding trading securities activities, of
$610,144,000. Net realized gains on investments of $1,435,000 and $2,771,000 for
the nine months ended September 30, 2004 and 2003, respectively, were the result
of investment sale activity to manage the credit quality, duration and diversity
of the investment portfolio.

      Other income for the nine months ended September 30, 2004 and 2003 was
$2,137,000 and $4,444,000, respectively. Other income for the nine months ended
September 30, 2004 includes $220,000 of net unrealized gains relating to changes
in fair value of fixed maturities classified as trading, $565,000 of earnings on
reinsurance contracts accounted for as deposits and a gain of $1,000,000 on the
sale of assets. There were no fixed maturities classified as trading or
unrealized gains or losses included in other income for the nine months ended
September 30, 2003. Other income for the nine months ended September 30, 2003
represents earnings on reinsurance contracts accounted for as deposits. Earnings
on reinsurance contracts accounted for as deposits decreased in 2004 as compared
with 2003 due to fewer reinsurance contracts accounted for as deposits.

      Net foreign currency exchange gains (losses) for the nine months ended
September 30, 2004 and 2003 were $326,000 and ($3,456,000), respectively. Gains
and losses result from the re-valuation into U.S. dollars of insurance related
assets and liabilities as well as invested assets denominated in foreign
currencies. The reduction in foreign currency exchange volatility in 2004 as
compared with 2003 is due to actions taken to manage exposures to foreign
currency exchange rate fluctuations, including holding invested assets in the
same foreign currencies in which the related net insurance assets and
liabilities are denominated.

      Losses and LAE and the resulting loss ratios for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                              Nine Months Ended September 30,
                              -------------------------------
                                 2004                 2003             Increase
                              ----------             -------         ------------
<S>                           <C>                    <C>             <C>
Losses and LAE                $  736,159             452,813         $    283,346
Losses and LAE ratio                72.5%               57.3%         15.2 points
</TABLE>

                                      -17-
<PAGE>
      The increase in losses and LAE in 2004 as compared with 2003 is due
primarily to gross losses of approximately $186,457,000 from the Hurricanes as
well as the growth in business in all segments. The increase in the loss ratio
in 2004 as compared with 2003 is due primarily to losses from the Hurricanes in
2004. Also contributing to the increase in the loss ratio in 2004 was favorable
development of $44,600,000 in 2004 as compared with $49,200,000 in 2003.

      Acquisition expenses and resulting acquisition expense ratios for the nine
months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                               Nine Months Ended September 30,
                               -------------------------------
                                  2004                   2003          Increase
                               ----------              -------        -----------
<S>                            <C>                     <C>            <C>
Acquisition expenses           $  232,886              172,503        $    60,383
Acquisition expense ratio            22.9%                21.8%        1.1 points
</TABLE>

      The increase in acquisition expenses in 2004 as compared with 2003 is
consistent with the growth in business in all segments, partially offset by
reductions in profit commissions resulting from losses from the Hurricanes. The
increase in the acquisition expense ratio in 2004 as compared with 2003 is
primarily due to changes in the mix of business.

      Operating expenses for the nine months ended September 30, 2004 and 2003
were $53,436,000 and $71,663,000, respectively. Operating expenses include costs
such as salaries, rent and like items related to reinsurance operations as well
as costs associated with Platinum Holdings. Operating expenses in 2003 include a
charge for $9.4 million for the payment to and share option expense of the
Company's former chief executive officer as well as various start-up costs of
approximately $6,000,000 that are not recurring in 2004.

      Interest expense for the nine months ended September 30, 2004 and 2003 was
$6,952,000 and $7,150,000, respectively, and relates to the Company's Equity
Security Units, which are classified as debt obligations on the Company's
balance sheet.

      Income tax expense and the effective income tax rate for the nine months
ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                             Nine Months Ended September 30,
                             -------------------------------
                                2004                   2003          Decrease
                             ----------               ------      --------------
<S>                          <C>                      <C>         <C>
Income tax expense           $   12,893               36,747      $     (23,854)
Effective income tax rate          27.0%                27.9%      (0.9) points
</TABLE>

      The decrease in the effective income tax rate in 2004 as compared with
2003 is the result of Platinum Bermuda providing an increasing proportion of
income before income tax expense. Additionally, the effective tax rate in 2003
reflects expenses related to the severance payment to and share option expense
of the Company's former chief executive officer that were incurred by Platinum
Holdings, which has no corporate income tax, thereby increasing the 2003
effective tax rate.

SEGMENT INFORMATION

      The Company conducts its worldwide reinsurance business through three
operating segments: Property and Marine, Casualty and Finite Risk. In managing
the Company's operating segments, management uses measures such as underwriting
income and underwriting ratios to evaluate segment performance. Management does
not allocate by segment its assets or certain income and expenses such

                                      -18-
<PAGE>

as investment income, interest expense and certain corporate expenses. Segment
underwriting income is reconciled to income before income tax expense (benefit).
The measures used by management in evaluating the Company's operating segments
should not be used as a substitute for measures determined under U.S. GAAP. The
following table summarizes underwriting activity and ratios for the three
operating segments for the three and nine months ended September 30, 2004 and
2003 ($ in thousands):

<TABLE>
<CAPTION>
                                                               Property
                                                              and Marine       Casualty      Finite Risk        Total
                                                              -----------      --------      -----------     -----------
<S>                                                           <C>              <C>           <C>             <C>
Three months ended September 30, 2004:
Net premiums written                                          $   120,629       171,967        147,899       $   440,495
                                                              -----------       -------        -------       -----------
Net premiums earned                                               135,430       156,512         91,148           383,090
Losses and LAE                                                    195,495       105,559         83,670           384,724
Acquisition expenses                                               20,834        38,935         21,502            81,271
Other underwriting expenses                                         5,956         5,617            661            12,234
                                                              -----------       -------        -------       -----------
  Segment underwriting income (loss)                          $   (86,855)        6,401        (14,685)      $   (95,139)
                                                              -----------       -------        -------
Corporate expenses not allocated to segments                                                                      (3,166)
Net foreign currency exchange gains                                                                                  628
Interest expense                                                                                                  (2,322)
Other income                                                                                                       1,021
Net investment income and net realized gains on investments                                                       23,691
                                                                                                             -----------
  Loss before income tax benefit                                                                             $   (75,287)
                                                                                                             -----------
Ratios:
  Losses and LAE                                                    144.4%         67.4%          91.8%            100.4%
  Acquisition expense                                                15.4%         24.9%          23.6%             21.2%
  Other underwriting expense                                          4.4%          3.6%           0.7%              3.2%
                                                              -----------       -------        -------       -----------
        Combined                                                    164.2%         95.9%         116.1%            124.8%
                                                              -----------       -------        -------       -----------
Three months ended September 30, 2003:
Net premiums written                                          $    77,114       134,991         69,211       $   281,316
                                                              -----------       -------        -------       -----------
Net premiums earned                                                81,113       106,298         84,854           272,265
Losses and LAE                                                     41,237        71,052         44,919           157,208
Acquisition expenses                                                9,930        29,465         21,013            60,408
Other underwriting expenses                                         7,412         5,065          2,616            15,093
                                                              -----------       -------        -------       -----------
  Segment underwriting income                                 $    22,534           716         16,306       $    39,556
                                                              -----------       -------        -------
Corporate expenses not allocated to segments                                                                      (3,406)
Net foreign currency exchange gains                                                                                1,356
Interest expense                                                                                                  (2,444)
Other income                                                                                                         544
Net investment income and net realized gains on investments                                                       16,288
                                                                                                             -----------
  Income before income tax expense                                                                           $    51,894
                                                                                                             -----------
Ratios:
  Losses and LAE                                                     50.8%         66.8%          52.9%             57.7%
  Acquisition expense                                                12.2%         27.7%          24.8%             22.2%
  Other underwriting expense                                          9.1%          4.8%           3.1%              5.5%
                                                              -----------       -------        -------       -----------
        Combined                                                     72.1%         99.3%          80.8%             85.4%
                                                              -----------       -------        -------       -----------
</TABLE>

                                      -19-
<PAGE>

<TABLE>
<CAPTION>
                                                               Property
                                                              and Marine       Casualty      Finite Risk        Total
                                                              -----------      --------      -----------     -----------
<S>                                                           <C>              <C>           <C>             <C>
Nine months ended September 30, 2004:
Net premiums written                                          $   393,764       508,693        348,671       $ 1,251,128
                                                              -----------       -------        -------       -----------
Net premiums earned                                               353,423       424,964        236,612         1,014,999
Losses and LAE                                                    285,047       293,734        157,378           736,159
Acquisition expenses                                               57,491       105,765         69,630           232,886
Other underwriting expenses                                        21,280        15,979          5,825            43,084
                                                              -----------       -------        -------       -----------
  Segment underwriting income (loss)                          $   (10,395)        9,486          3,779       $     2,870
                                                              -----------       -------        -------
Corporate expenses not allocated to segments                                                                     (10,352)
Net foreign currency exchange gains                                                                                  326
Interest expense                                                                                                  (6,952)
Other income                                                                                                       2,137
Net investment income and net realized gains on investments                                                       59,725
                                                                                                             -----------
  Income before income tax expense                                                                           $    47,754
                                                                                                             -----------
Ratios:
  Losses and LAE                                                     80.7%         69.1%          66.5%             72.5%
  Acquisition expense                                                16.3%         24.9%          29.4%             22.9%
  Other underwriting expense                                          6.0%          3.8%           2.5%              4.2%
                                                              -----------       -------        -------       -----------
        Combined                                                    103.0%         97.8%          98.4%             99.6%
                                                              -----------       -------        -------       -----------
Nine months ended September 30, 2003:
Net premiums written                                          $   278,369       381,005        289,277       $   948,651
                                                              -----------       -------        -------       -----------
Net premiums earned                                               265,052       289,975        234,684           789,711
Losses and LAE                                                    135,292       199,489        118,032           452,813
Acquisition expenses                                               38,734        74,943         58,826           172,503
Other underwriting expenses                                        28,243        14,225          9,485            51,953
                                                              -----------       -------        -------       -----------
  Segment underwriting income                                 $    62,783         1,318         48,341       $   112,442
                                                              -----------       -------        -------
Corporate expenses not allocated to segments                                                                     (19,710)
Net foreign currency exchange losses                                                                              (3,456)
Interest expense                                                                                                  (7,150)
Other income                                                                                                       4,444
Net investment income and net realized gains on investments                                                       45,185
                                                                                                             -----------
  Income before income tax expense                                                                           $   131,755
                                                                                                             -----------
Ratios:
  Losses and LAE                                                     51.0%         68.8%          50.3%             57.3%
  Acquisition expense                                                14.6%         25.8%          25.1%             21.8%
  Other underwriting expense                                         10.7%          4.9%           4.0%              6.6%
                                                              -----------       -------        -------       -----------
        Combined                                                     76.3%         99.5%          79.4%             85.7%
                                                              -----------       -------        -------       -----------
</TABLE>

      PROPERTY AND MARINE

      The Property and Marine operating segment includes principally property
and marine reinsurance coverages that are written in the United States and
international markets. This business includes property per-risk excess-of-loss
treaties, property proportional treaties and catastrophe excess-of-loss
reinsurance treaties. This operating segment generated 27.4% of the
Company's net premiums written for

                                      -20-
<PAGE>

the three months ended September 30, 2004 and 2003 and 31.5% and 29.3% of the
Company's net premiums written for the nine months ended September 30, 2004 and
2003, respectively.

Three Months Ended September 30, 2004 as Compared with the Three Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Three Months Ended September 30,
                       --------------------------------
                         2004                     2003             Increase
                       --------                  ------            --------
<S>                    <C>                       <C>               <C>
Net premiums written   $120,629                  77,114            $ 43,515
Net premiums earned    $135,430                  81,113            $ 54,317
         </TABLE>

      Net premiums written and earned increased in 2004, as compared with 2003,
due to growth across all property classes. The increase in net premiums written
is the result of a more efficient use of catastrophe capacity through enhanced
modeling capabilities, an increase of property pro-rata business and a transfer
of catastrophe capacity from the Finite Risk segment to the Property and Marine
segment. Net premiums written and earned also include approximately $13,000,000
of additional premiums related to losses arising from the Hurricanes.

      Losses and LAE and the resulting loss ratios for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Three Months Ended September 30,
                       --------------------------------
                         2004                     2003           Increase
                       --------                  ------        -------------
<S>                    <C>                       <C>           <C>
Losses and LAE         $195,495                  41,237        $    154,258
Losses and LAE ratio      144.4%                   50.8%        93.6 points
</TABLE>

      The increase in losses and LAE and the related losses and LAE ratio in
2004 is due to gross losses of $147,403,000 from the Hurricanes as compared with
the low level of catastrophe losses in 2003. Partially offsetting losses and LAE
in 2004 was approximately $15,000,000 of favorable development of prior years'
unpaid losses and LAE as compared with approximately $12,400,000 of favorable
development in 2003. During 2004 and 2003, actual reported losses were
significantly less than expected for the short-tailed property lines resulting
in reductions in estimated ultimate losses.

      Acquisition expenses and resulting acquisition expense ratios for the
three months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                             Three Months Ended September 30,
                             --------------------------------
                               2004                     2003            Increase
                             --------                  ------         ------------
<S>                          <C>                       <C>            <C>
Acquisition expenses         $ 20,834                   9,930         $    10,904
Acquisition expense ratio        15.4%                   12.2%         3.2 points
</TABLE>

      The increase in acquisition expenses in 2004 as compared with 2003 is
consistent with the growth in business. The increase in the acquisition expense
ratio is primarily due to profit commissions and changes in the mix of business.

      Other underwriting expenses for the three months ended September 30, 2004
and 2003 were $5,956,000 and $7,412,000, respectively, and represent costs such
as salaries, rent and like items. The decrease in other underwriting expenses is
due to cost reductions in the Property and Marine segment including
non-recurring start-up costs incurred in 2003. Other underwriting expenses for
the three

                                      -21-
<PAGE>

months ended September 30, 2004 and 2003 include fees of $993,000 and $748,000,
respectively, relating to the Services and Capacity Reservation Agreement dated
November 1, 2002 with RenaissanceRe, (the "RenRe Agreement"), that provides for
a periodic review of aggregate property catastrophe exposures by RenaissanceRe.

Nine Months Ended September 30, 2004 as Compared with the Nine Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Nine Months Ended September 30,
                       -------------------------------
                         2004                   2003              Increase
                       --------                -------           ---------
<S>                    <C>                     <C>               <C>
Net premiums written   $393,764                278,369           $ 115,395
Net premiums earned    $353,423                265,052           $  88,371
</TABLE>

      The increase in net premiums written and earned in 2004 as compared with
2003 is the result of a more efficient use of catastrophe capacity through
enhanced modeling capabilities, an increase of property pro-rata business and a
transfer of catastrophe capacity from the Finite Risk segment to the Property
and Marine segment. Net premiums written and earned also include approximately
$13,000,000 of additional premiums related to losses arising from the
Hurricanes.

         Losses and LAE and the resulting loss ratios for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Nine Months Ended September 30,
                       -------------------------------
                         2004                   2003           Increase
                       --------                -------       ------------
<S>                    <C>                     <C>           <C>
Losses and LAE         $285,047                135,292       $    149,755
Losses and LAE ratio       80.7%                  51.0%       29.7 points
</TABLE>

         The increase in losses and LAE and the related losses and LAE ratio in
2004 is due to gross losses of $147,403,000 from the Hurricanes as compared with
the low level of catastrophe losses in 2003. Partially offsetting the increased
losses and LAE relating to the Hurricanes is approximately $38,200,000 of
favorable development of prior years' unpaid losses and LAE as compared with
approximately $23,200,000 of favorable development in 2003. During 2004 and
2003, actual reported losses were significantly less than expected for the
short-tailed property lines resulting in reductions in estimated ultimate
losses.

         Acquisition expenses and resulting acquisition expense ratios for the
nine months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                             Nine Months Ended September 30,
                             -------------------------------
                               2004                    2003            Increase
                             --------                 ------         ------------
<S>                          <C>                      <C>            <C>
Acquisition expenses         $ 57,491                 38,734         $    18,757
Acquisition expense ratio        16.3%                  14.6%         1.7 points
</TABLE>

      The increase in acquisition expenses in 2004 as compared with 2003 is
consistent with the growth in business in the segment. The increase in the
acquisition expense ratio is due to profit commissions and changes in the mix of
business.

      Other underwriting expenses for the nine months ended September 30, 2004
and 2003 were $21,280,000 and $28,243,000, respectively. The decrease in other
underwriting expenses is due to cost reductions in the Property and Marine
segment including various non recurring start-up costs incurred in

                                     -22-
<PAGE>

2003. Other underwriting expenses for the nine months ended September 30, 2004
and 2003 include fees of $4,641,000 and $4,475,000, respectively, relating to
the RenRe Agreement.

      CASUALTY

      The Casualty operating segment includes principally reinsurance treaties
that cover umbrella liability, general and product liability, professional
liability, directors and officers liability, workers' compensation, casualty
clash, automobile liability, surety and trade credit. This segment also includes
accident and health reinsurance treaties, which are predominantly reinsurance of
health insurance products. This operating segment generated 39.0% and 48.0% of
the Company's net premiums written for the three months ended September 30, 2004
and 2003, respectively. This operating segment generated 40.6% and 40.2% of the
Company's net premiums written for the nine months ended September 30, 2004 and
2003, respectively.

Three Months Ended September 30, 2004 as Compared with the Three Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Three Months Ended September 30,
                       --------------------------------
                         2004                    2003             Increase
                       --------                 -------           ---------
<S>                    <C>                      <C>               <C>
Net premiums written   $171,967                 134,991           $  36,976
Net premiums earned    $156,512                 106,298           $  50,214
</TABLE>

      The increase in premiums written is due to the growth in contracts bound
in both 2003 and 2004 that together generate net premiums written in 2004. In
response to market conditions, the Company previously increased its involvement
in the directors and officers and umbrella lines of business. The Company
continues to expand its treaty participation with existing clients and form new
client relationships. Additionally, in 2004 the Company expanded its
participation in surety and trade credit business. The Company continues to
maintain its underwriting discipline and, in response to deteriorating market
conditions in the directors and officers liability line of business, has begun
to significantly decrease its involvement in that line of business.

      Losses and LAE and the resulting loss ratios for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Three Months Ended September 30,
                       --------------------------------
                         2004                     2003            Increase
                       --------                  ------         ------------
<S>                    <C>                       <C>            <C>
Losses and LAE         $105,559                  71,052         $    34,507
Losses and LAE ratio       67.4%                   66.8%         0.6 points
</TABLE>

      The increase in losses and LAE in 2004 as compared with 2003 is consistent
with the growth in business. The resulting loss ratios in 2004 and 2003 are
comparable. The increase in the loss ratio in 2004 is due to changes in the mix
of business toward lines with higher loss ratios and lower acquisition expense
ratios.

                                      -23-
<PAGE>

      Acquisition expenses and resulting acquisition expense ratios for the
three months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                              Three Months Ended September 30,
                              --------------------------------          Increase
                                2004                     2003          (Decrease)
                              ---------                 ------        -------------
<S>                           <C>                       <C>           <C>
Acquisition expenses          $  38,935                 29,465        $       9,470
Acquisition expense ratio          24.9%                  27.7%        (2.8) points
</TABLE>

      The increase in acquisition expenses is due primarily to the increase in
net premiums earned in 2004 as compared with 2003. The decrease in acquisition
expense ratio in 2004 is due to changes in the mix of business toward lines with
higher loss ratios and lower acquisition expense ratios.

      Other underwriting expenses for the three months ended September 30, 2004
and 2003 were $5,617,000 and $5,065,000, respectively, and represent costs such
as salaries, rent and like items. The resulting other underwriting expense
ratios for the three months ended September 30, 2004 and 2003 were 3.6% and
4.8%, respectively. The decrease in the ratio in 2004 as compared with 2003 is
due primarily to the increase in net premiums earned.

Nine Months Ended September 30, 2004 as Compared with the Nine Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>

                              Nine Months Ended September 30,
                              -------------------------------
                                2004                   2003           Increase
                              ---------               -------         ---------
<S>                           <C>                     <C>             <C>
Net premiums written          $ 508,693               381,005          $127,688
Net premiums earned           $ 424,964               289,975          $134,989
</TABLE>

      The increase in premiums written and earned is due to the growth in
contracts bound in both 2003 and 2004 that together generate net premiums
written in 2004. In response to market conditions, the Company previously
increased its involvement in the directors and officers and umbrella lines of
business. The Company continues to expand its treaty participation with existing
clients and form new client relationships. The Company continues to maintain its
underwriting discipline and, in response to deteriorating market conditions in
the directors and officers liability line of business, has begun to
significantly decrease its involvement in that line . Additionally, in 2004 the
Company expanded its participation in surety and trade credit business.
Offsetting these increases were revisions of estimates of Casualty premiums that
resulted in reductions of net premiums written in 2004 of approximately
$16,300,000 and a reduction in net premiums earned in 2004 of approximately
$10,800,000. The net effect of the revisions of estimates on underwriting
income, after related reductions in losses, LAE and acquisitions expenses, was
not material. The increase in net premium earned is related to the growth in
current and prior periods' net premiums written and is affected by changes in
the mix of business and the structure of the underlying reinsurance contracts.

      Losses and LAE and the resulting loss ratios for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                              Nine Months Ended September 30,
                              -------------------------------
                                2004                    2003            Increase
                              ---------               -------          -----------
<S>                           <C>                     <C>              <C>
Losses and LAE                $ 293,734               199,489          $    94,245
Losses and LAE ratio               69.1%                 68.8%          0.3 points
</TABLE>

                                      -24-
<PAGE>

      The increase in losses and LAE in 2004 as compared with 2003 is consistent
with the growth in net premiums earned. The resulting losses and LAE ratios in
2004 and 2003 are comparable. Improvements in the loss ratio in 2004, due to
increased profitability of the 2003 and 2004 underwriting years over the 2002
underwriting year, were offset by adverse development in the U.K. Motor class.
In addition, losses and LAE in 2004 include losses arising from the partial
collapse of the new airport terminal in Paris, France.

      Acquisition expenses and resulting acquisition expense ratios for the nine
months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                              Nine Months Ended September 30,
                              -------------------------------
                                2004                    2003            Increase
                              ---------               -------         ------------
<S>                           <C>                     <C>             <C>
Acquisition expenses          $ 105,765               74,943          $      30,822
Acquisition expense ratio          24.9%                25.8%          (0.9) points
</TABLE>

      The increase in acquisition expenses is due primarily to the increase in
net premiums earned in 2004 as compared with 2003. The decrease in acquisition
expense ratios for the nine months ended September 30, 2004 and 2003 is due to
changes in the mix of business toward lines with higher loss ratios and lower
acquisition expense ratios.

      Other underwriting expenses for the nine months ended September 30, 2004
and 2003 were $15,979,000 and $14,225,000, respectively. The resulting other
underwriting expense ratios for the nine months ended September 30, 2004 and
2003 were 3.8% and 4.9%, respectively. The decrease in the ratio in 2004 as
compared with 2003 is due primarily to the increase in net premiums earned.

      FINITE RISK

      The Finite Risk operating segment includes principally structured
reinsurance contracts with ceding companies whose needs may not be met
efficiently through traditional reinsurance products. The Company focuses on
providing such clients with customized solutions. This operating segment
generated 33.6% and 24.6% of the Company's net premiums written for the three
months ended September 30, 2004 and 2003, respectively. This operating segment
generated 27.9% and 30.5% of the Company's net premiums written for the nine
months ended September 30, 2004 and 2003, respectively. For this segment, the
Company believes it is especially important to evaluate the overall combined
ratio, rather than its component parts of loss and expense ratios.

Three Months Ended September 30, 2004 as Compared with the Three Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the three months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                              Three Months Ended September 30,
                              --------------------------------
                                2004                     2003           Increase
                              ---------                 ------          --------
<S>                           <C>                       <C>             <C>
Net premiums written          $ 147,899                 69,211           $78,688
Net premiums earned           $  91,148                 84,854           $ 6,294
</TABLE>

      The Finite Risk portfolio consists of a small number of contracts that can
be large in premium size and are written on an intermittent basis. Consequently,
net premiums written can be expected to vary significantly from period to
period. The increase in net premiums written for the three months ended
September 30, 2004 is due primarily to several capped quota share contracts
written in the current year.

                                      -25-
<PAGE>

Net premium earned is related to current and prior periods' net premiums written
and is affected by changes in the mix of business and the structure of the
underlying reinsurance contracts.

      Losses and LAE, acquisition expenses and the resulting ratios for the
three months ended September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>

                                           Three Months Ended September 30,
                                           --------------------------------            Increase
                                             2004                     2003            (decrease)
                                           ----------                ------         -------------
<S>                                        <C>                       <C>            <C>
Losses and LAE                             $   83,670                 44,919        $      38,751
Losses and LAE ratio                             91.8%                  52.9%         38.9 points

Acquisition expenses                       $   21,502                 21,013        $         489
Acquisition expense ratio                        23.6%                  24.8%        (1.2) points

Losses, LAE and acquisition expenses       $  105,172                 65,932        $      39,240
Losses, LAE and acquisition expense ratio       115.4%                  77.7%         37.7 points
</TABLE>

      The increase in losses, LAE and acquisition expenses and the losses, LAE
and acquisition expense ratio in 2004 as compared with 2003 is due to gross
losses of $39,054,000 from the Hurricanes, partially offset by a reduction in
profit commissions of $10,350,000. There were no catastrophe losses in 2003. The
increase in the loss ratio in 2004 is also partly attributable to favorable loss
development in 2003 of approximately $4,000,000. Overall, the current Finite
Risk book of business has a greater proportion of lower risk and lower margin
capped quota share contracts and a lower proportion of higher margin catastrophe
contracts than in 2003.

      Other underwriting expenses for the three months ended September 30, 2004
and 2003 were $661,000 and $2,616,000, respectively, and represent costs such as
salaries, rent and like items. The decrease in other underwriting expenses is
due to cost reductions in the Finite Risk segment as well as various
non-recurring start-up costs incurred in 2003.

Nine Months Ended September 30, 2004 as Compared with the Nine Months Ended
September 30, 2003

      Net premiums written and net premiums earned for the nine months ended
September 30, 2004 and 2003 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                       Nine Months Ended September 30,
                                       -------------------------------
                                         2004                   2003          Increase
                                       --------                -------        --------
<S>                                    <C>                     <C>            <C>
Net premiums written                   $348,671                289,277        $59,394
Net premiums earned                    $236,612                234,684        $ 1,928
</TABLE>

      The increase in net premiums written and net premiums earned is primarily
attributable to several capped quota share contracts that were written in 2004.
Net premium earned is related to current and prior periods' net premiums written
and is affected by changes in the mix of business and the structure of the
underlying reinsurance contracts.

      Losses and LAE, acquisition expenses and the resulting ratios for the nine
months ended September 30, 2004 and 2003 were as follows ($ in thousands):

                                      -26-
<PAGE>

<TABLE>
<CAPTION>
                                           Nine Months Ended September 30,
                                           -------------------------------
                                              2004                2003          Increase
                                           ----------           ----------    ------------
<S>                                        <C>                   <C>          <C>
Losses and LAE                             $  157,378            118,032      $     39,346
Losses and LAE ratio                             66.5%              50.3%      16.2 points

Acquisition expenses                       $   69,630             58,826      $     10,804
Acquisition expense ratio                        29.4%              25.1%       4.3 points

Losses, LAE and acquisition expenses       $  227,008            176,858      $     50,150
Losses, LAE and acquisition expense ratio        95.9%              75.4%      20.5 points
</TABLE>

      The increase in losses, LAE and acquisition expenses and the losses, LAE
and acquisition expense ratio in 2004 as compared with 2003 is due to gross
losses of $39,054,000 from the Hurricanes, partially offset by a reduction in
profit commissions of $10,350,000. There were no catastrophe losses in 2003.
Favorable development impacting both losses and LAE and acquisition expenses
occurred in both 2004 and 2003. Net favorable development in 2004 and 2003
amounted to $6,700,000 and $19,800,000, respectively.

      Other underwriting expenses for the nine months ended September 30, 2004
and 2003 were $5,825,000 and $9,485,000, respectively. The decrease in other
underwriting expenses is due to cost reductions in the Finite Risk segment as
well as various non-recurring start-up costs incurred in 2003.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

      FINANCIAL CONDITION

      Cash and cash equivalents were $222,347,000 as of September 30, 2004.
Fixed maturities were $2,145,335,000 as of September 30, 2004. The Company's
fixed maturity investment portfolio is comprised entirely of publicly traded
investment grade bonds. The investment portfolio, including cash and cash
equivalents, had a weighted average duration of 3.4 years as of September 30,
2004. Management monitors the composition of the investment portfolio and cash
flows from the portfolio to maintain liquidity necessary to meet the Company's
obligations. The Company believes it has sufficient cash on hand to meet its
short-term obligations and to maintain the liquidity necessary for portfolio
management.

      Certain assets and liabilities associated with underwriting have increased
significantly, some of which include significant estimates. Premiums receivable,
deferred acquisition costs, unpaid losses and LAE, unearned premiums and
commissions payable all include significant estimates. Premiums receivable of
$638,463,000 includes $533,729,000 of estimates of premiums that are accrued.
Unpaid losses and LAE, net of reinsurance recoverable, of $1,220,201,000
includes $967,467,000 of estimates of losses that were incurred but not reported
("IBNR"). Commissions payable of $220,902,000 include $208,623,000 which are
estimated or profit commissions payable.

      SOURCES OF LIQUIDITY

      The consolidated sources of funds of the Company consist primarily of
premiums written, investment income, proceeds from sales and redemption of
investments, losses recovered from retrocessionaires, and actual cash and cash
equivalents held by the Company. Net cash flow provided by operations, excluding
trading securities activities, for the nine months ended September 30, 2004 was
$610,144,000 and was used primarily to acquire additional investments.

      Platinum Holdings is a holding company that conducts no reinsurance
operations of its own. All of its reinsurance operations are conducted through
its wholly owned operating subsidiaries Platinum US,

                                      -27-
<PAGE>

Platinum UK and Platinum Bermuda. As a holding company, the cash flow of
Platinum Holdings consists primarily of dividends, interest and other
permissible payments from its subsidiaries. Platinum Holdings depends on such
payments for general corporate purposes and to meet its obligations, including
the contract adjustment payments related to the Equity Security Units and the
payment of any dividends to its shareholders.

      The Company has filed an unallocated universal shelf registration
statement with the Securities and Exchange Commission ("SEC"), which the SEC
declared effective on April 5, 2004. The securities registered under the shelf
registration statement for possible future sales include up to $750,000,000 of
common shares, preferred shares and various types of debt securities. The
registration statement included common shares held by St. Paul and RenaissanceRe
and common shares issuable upon exercise of options owned by St. Paul and
RenaissanceRe. On June 25, 2004, the Company announced St. Paul's intent to sell
6,000,000 of the Company's common shares in an underwritten public offering,
which was effected pursuant to a prospectus supplement to the shelf registration
statement dated June 28, 2004 and completed on June 30, 2004. The Company did
not sell any common shares in the offering and did not receive any proceeds from
the sale of the common shares by St Paul. St. Paul continues to hold an option
to acquire 6,000,000 common shares of the Company. The 6,000,000 common shares
sold by St. Paul amounted to $177,330,000 of the $750,000,000 securities
registered under the shelf registration statement.

      LIQUIDITY REQUIREMENTS

      The principal consolidated cash requirements of the Company are the
payment of losses and LAE, commissions, brokerages, operating expenses,
dividends to its shareholders, the servicing of debt (including interest
payments on the senior notes and contract adjustment payments on the purchase
contracts included in the Company's Equity Security Units), the acquisition of
and investment in businesses, capital expenditures, premiums retroceded and
excise taxes.

      Platinum UK and Platinum Bermuda are not licensed, approved or accredited
as reinsurers anywhere in the United States and therefore, under the terms of
most of their contracts with United States ceding companies, they are required
to provide collateral to these ceding companies for unpaid ceded liabilities in
a form acceptable to state insurance commissioners. Typically, this type of
collateral takes the form of a letter of credit issued by an acceptable bank,
the establishment of a trust, or a cash advance. Platinum UK and Platinum
Bermuda expect to obtain letters of credit through commercial banks and may be
required to provide the banks with a security interest in certain of Platinum
UK's and Platinum Bermuda's investments. Platinum US and Platinum Bermuda have
reinsurance contracts that require them to provide collateral should certain
events occur, such as a decline in the rating by A.M. Best below specified
levels or a decline in statutory equity below specified amounts, or when certain
levels of assumed liabilities are attained. Some reinsurance contracts also have
special termination provisions that permit early termination should certain
events occur.

      The payment of dividends and other distributions from the Company's
regulated reinsurance subsidiaries is limited by applicable laws and statutory
requirements of the jurisdictions in which the subsidiaries operate, including
Bermuda, the United States and the United Kingdom. Based on the regulatory
restrictions of the applicable jurisdictions, the maximum amount available for
payment of dividends or other distributions by the reinsurance subsidiaries of
the Company in 2004 without prior regulatory approval is estimated to be
$139,190,000.

      Management believes that the cash flow generated by the operating
activities of the Company's subsidiaries will provide sufficient funds for the
Company to meet its liquidity needs over the next twelve months. Beyond the next
twelve months, cash flow available to the Company may be influenced by a

                                      -28-
<PAGE>

variety of factors, including economic conditions in general and in the
insurance and reinsurance markets, legal and regulatory changes as well as
fluctuations from year to year in claims experience and the presence or absence
of large catastrophic events.

ECONOMIC CONDITIONS

         Periods of moderate economic recession or inflation tend not to have a
significant direct effect on the Company's underwriting operations. Significant
inflationary or recessionary periods can, however, impact the Company's
underwriting operations and investment portfolio. Management considers the
potential impact of economic trends in estimating its unpaid losses and LAE.

CURRENT OUTLOOK

      We believe that our markets continue to provide strong opportunities.
Currently, we believe that premium rates in certain casualty reinsurance markets
are at attractive levels. We believe that premiums in our Casualty segment will
grow. Because there are areas of the casualty market where, in our view, pricing
is inadequate, we are being selective and write business only when we believe it
will be profitable.

      As a result of recent catastrophe losses in the industry, we believe that
reinsurance rates in areas affected by the catastrophes will strengthen while
rates in areas unaffected will decrease. Overall, we believe that rates remain
at attractive levels. Significant time and effort has been invested in
developing sophisticated catastrophe modeling tools that assist us in
identifying profitable business opportunities. We believe we can maintain an
acceptable risk/reward relationship in our portfolio and maintain the Property
and Marine segment while managing our catastrophe exposure risk within
acceptable levels.

      We believe opportunities to write finite contracts will decrease and
current market conditions are unlikely to produce the profitability experienced
in 2003.

      We routinely review various opportunities for investments or transactions
that would provide an attractive return on equity or an opportunity to write new
classes of business or access additional markets.

      The New York State Attorney General filed suit against an insurance broker
alleging illegal conduct including the manipulation of the insurance market. In
addition, other regulatory authorities have also launched investigations. The
Company is not a party to any of the litigation and has not received any
subpoena or information requests. The Company has reviewed the allegations
contained in the filed complaint and has begun an internal review of its
business arrangements. While the internal review continues, at this time there
is no evidence that the Company is involved in the type of conduct that is the
subject of the complaint. It is not possible to predict the ultimate effect of
the current litigation or its impact on the reinsurance industry and the
Company's business.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

      It is important to understand the Company's accounting policies in order
to understand its financial position and results of operations. Management
considers certain of these policies to be critical to the presentation of the
financial results since they require management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets, liabilities, revenues, expenses, and related disclosures at the
financial reporting date and throughout the relevant periods. Certain of the
estimates and assumptions result from judgments that can be subjective and
complex, and consequently actual results may differ from these estimates. The
Company's most critical accounting policies involve written and unearned
premium, unpaid losses and LAE, reinsurance, investments, income tax expense and
share-based compensation. The critical accounting policies presented herein are

                                      -29-
<PAGE>

discussed in more detail in the notes to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2003.

      PREMIUMS

      Assumed reinsurance premiums are recognized as revenues when premiums
become earned proportionately over the coverage period. Net premiums earned are
recorded in the statement of income, net of the cost of retrocession. Net
premiums written not yet recognized as revenue are recorded in the balance sheet
as unearned premiums, gross of any ceded unearned premiums.

      Due to the nature of reinsurance, ceding companies routinely report and
remit premiums subsequent to the contract coverage period. Consequently,
reinsurance premiums written include amounts reported by the ceding companies,
supplemented by premium accruals. Along with estimating premiums earned but not
reported the Company records the expenses associated with these premiums in the
form of losses, LAE and commissions. As actual premiums are reported by the
ceding companies, management evaluates the appropriateness of the premium
estimates and any adjustment to these estimates is recorded in the period in
which it becomes known. Adjustments to original premium estimates could be
material and could significantly impact earnings in the period they are
recorded. Due to the time lag inherent in the reporting of premiums by ceding
companies, a significant portion of amounts included as premiums written and
receivable is estimated, net of commissions, and is not currently due based on
the terms of the underlying contracts.

      Certain of our reinsurance contracts include provisions that adjust
premiums or acquisition expenses based upon the experience under the contracts.
Premiums written and earned, as well as related acquisition expenses under these
contracts, are recognized based upon the losses recorded under those contracts.

      Reinstatement premiums and additional premiums are recognized in
accordance with the provisions of assumed reinsurance contracts, based on losses
recorded under such contracts. Reinstatement premiums are the premiums charged
for the restoration of the reinsurance limit of a reinsurance contract to its
full amount, generally coinciding with the payment of losses by the reinsurer.
These premiums relate to the future coverage obtained during the remainder of
the initial contract term and are earned over the remaining contract term.
Additional premiums are those premiums triggered by losses and not related to
reinstatement of limits and are earned immediately. An allowance for
uncollectable premiums is established for possible non-payment of such amounts
due, as deemed necessary.

      UNPAID LOSSES AND LAE

      The most significant judgment made by management in the preparation of
financial statements is the estimation of unpaid losses and LAE liabilities also
referred to as "loss reserves." These liabilities are balance sheet estimates of
future amounts required to pay losses and LAE for reinsured claims, which have
occurred at or before the balance sheet date. Every quarter, the Company's
actuaries prepare estimates of loss reserves based on established actuarial
techniques. Because the ultimate amount of unpaid losses and LAE is uncertain,
we believe that quantitative techniques to estimate these amounts are enhanced
by professional and managerial judgment. Company management reviews these
estimates and determines its best estimate of the liabilities to record in the
Company's financial statements.

      Loss reserves include estimates of the cost of claims that were reported
but not yet paid ("case reserves") and the cost of IBNR. Case reserves are
usually based upon claim reports received from ceding companies, and may be
increased or reduced by the Company's claims personnel. IBNR is based on
actuarial methods including the loss ratio method, the Bornhuetter-Ferguson
method and the chain

                                      -30-
<PAGE>

ladder method. IBNR related to a specific event may be based on the Company's
estimated exposure to an industry loss. This estimation process may include the
use of catastrophe modeling software.

      Generally, initial actuarial estimates of IBNR not related to a specific
event are based on the loss ratio method applied to each underwriting year for
each class of business. Actual paid losses and case reserves ("reported losses")
are subtracted from expected ultimate losses to determine IBNR. The initial
expected ultimate losses involve management judgment and are based on: (i)
contract by contract expected loss ratios derived from the Company's pricing
process, and (ii) historical loss ratios of the Company and St. Paul adjusted
for rate changes and trends. These judgments will take into account management's
view of past, current and future: (i) market conditions, (ii) changes in the
business underwritten, (iii) changes in timing of the emergence of claims and
(iv) other factors that may influence expected ultimate losses.

      Over time, as a greater number of claims are reported, actuarial estimates
of IBNR are based on the Bornhuetter-Ferguson and the chain ladder techniques.
The Bornhuetter-Ferguson technique utilizes actual reported losses and expected
patterns of reported losses, taking the initial expected ultimate losses into
account to determine a new estimate of expected ultimate losses. This technique
is most appropriate when there are few reported claims and a relatively less
stable pattern of reported losses. The chain ladder technique utilizes actual
reported losses and expected patterns of reported losses to determine a new
estimate of expected ultimate losses that is independent of the initial expected
ultimate losses. This technique is most appropriate when there are a large
number of reported losses with significant statistical credibility and a
relatively stable pattern of reported losses. The pattern of reported losses is
determined utilizing actuarial analysis including judgment and is based on
historical patterns of the recording of paid losses and case reserves to the
Company, as well as industry patterns. Information that may cause historical
patterns to differ from future patterns is considered and reflected in expected
patterns as appropriate. For property and health coverages these patterns
indicate that a substantial portion of the ultimate losses are reported within 2
to 3 years after the contract is effective. Casualty patterns can vary from 3
years to well over 20 years depending on the type of business.

      While the Company commenced operations in 2002, the business written is
sufficiently similar to the historical business of the reinsurance underwriting
segment of St. Paul ("St. Paul Re") that the Company uses the historical loss
experience of this business to estimate its initial expected ultimate losses and
its expected patterns of reported losses. These patterns can span more than a
decade and, given its own limited history, the availability of the St. Paul Re
data is a valuable asset to the Company.

      Under U.S. GAAP, we are not permitted to establish liabilities until the
occurrence of an event that may give rise to a loss. When an event occurs of
sufficient magnitude we may establish a specific IBNR reserve. Generally, this
involves a catastrophe occurrence, which affects many ceding company clients.
Ultimate losses and LAE are based on management's judgment that reflects
estimates gathered from ceding company clients, estimates of insurance industry
losses gathered from public sources and estimates from catastrophe modeling
software.

      Estimated amounts recoverable from retrocessionaires on unpaid losses and
LAE are determined based on the Company's estimate of ultimate losses and LAE
and the terms and conditions of its retrocessional contracts. These amounts are
reflected as assets.

      Unpaid losses and LAE represent management's best estimates, at a given
point in time, of the ultimate settlement and administration costs of claims
incurred, and it is possible that the ultimate liability may materially differ
from such estimates. Such estimates are not precise because, among other things,
they are based on predictions of future developments and estimates of future
trends in claim severity and frequency and other factors.

                                      -31-
<PAGE>

      The uncertainty inherent in loss estimation is particularly pronounced for
casualty coverages, such as umbrella liability, general and product liability,
professional liability, directors and officers liability and automobile
liability, where information, such as required medical treatment and costs for
bodily injury claims, only emerges over time. In the overall loss reserving
process, provisions for economic inflation and changes in the social and legal
environment are considered. The uncertainty inherent in the reserving process
for primary insurers is even greater for the reinsurer. This is because of, but
not limited to, the time lag inherent in reporting information from the primary
insurer to the reinsurer and differing reserving practices among ceding
companies.

      Loss reserves are refined and adjusted as new information becomes
available. Any such adjustments are accounted for as changes in estimates and
are reflected in results of operations in the period in which they are made.

      REINSURANCE

      Written premiums, earned premiums, incurred losses and LAE reflect the net
effects of assumed and ceded reinsurance transactions. Reinsurance accounting is
followed for assumed and ceded transactions when risk transfer requirements have
been met. Evaluating risk transfer involves significant assumptions relating to
the amount and timing of expected cash flows, as well as the interpretation of
underlying contract terms. Reinsurance contracts that do not transfer
significant insurance risk are generally accounted for as reinsurance deposit
liabilities with interest expense charged to other income and credited to the
liability.

      INVESTMENTS

      In accordance with our investment guidelines, our investments consist
largely of high-grade marketable fixed income securities. Fixed maturities for
which the Company may not have a positive intent to hold until maturity are
classified as available-for-sale and reported at fair value, with unrealized
gains and losses excluded from net income and reported in other comprehensive
income as a separate component of shareholders' equity, net of deferred taxes.
Fixed maturities that the Company has the intent to sell prior to maturity are
classified as trading securities and reported at fair value, with unrealized
gains and losses included in other income. Securities classified as trading
securities are generally foreign currency denominated securities intended to
match foreign currency denominated liabilities in order to minimize net
exposures arising from fluctuations in foreign currency exchange rates. Realized
gains and losses on sales of investments are determined on a specific
identification basis. In addition, unrealized depreciation in the value of
individual securities considered by management to be other than temporary is
charged to income in the period it is determined. Investment income is recorded
when earned and includes the amortization of premiums and discounts on
investments.

      INCOME TAX EXPENSE

      Platinum Holdings and Platinum Bermuda are domiciled in Bermuda, which has
no corporate income tax. The Company also has subsidiaries in the United States,
United Kingdom and Ireland that are subject to the tax laws thereof.

      The Company applies the asset and liability method of accounting for
income tax expense (benefit). Under the asset and liability method, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates applicable to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period the change is enacted.
A valuation allowance is

                                      -32-
<PAGE>

established for deferred tax assets where it is more likely than not that future
tax benefits will not be realized.

      SHARE BASED COMPENSATION

      During 2003, the Company adopted Statement of Financial Accounting
Standards No. 123 "Accounting for Awards of Stock Based Compensation to
Employees" ("SFAS 123") and Statement of Financial Accounting Standards No. 148
"Accounting for Stock-Based Compensation-Transition and Disclosure" ("SFAS
148"). SFAS 123 requires that the fair value of share options granted under the
Company's share option plan subsequent to the adoption of SFAS 148 be amortized
in earnings over the vesting periods. The fair value of the share options
granted is determined through the use of an option-pricing model. SFAS 148
amends SFAS 123 and provides transitioning guidance for a voluntary adoption of
FAS 123 as well as amends the disclosure requirements of SFAS 123. Prior to the
adoption of SFAS 123, the Company elected to use the intrinsic value method of
accounting for its share based awards granted to employees established by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25") and continues to use the intrinsic method for share option
granted in 2002. Under APB 25, if the exercise price of the Company's employee
share options is equal to or greater than the fair market value of the
underlying shares on the date of the grant, no compensation expense is recorded.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET AND CREDIT RISK

      The Company's principal invested assets are fixed maturities, which are
subject to the risk of potential losses from adverse changes in market rates and
prices and credit risk resulting from adverse changes in the borrower's ability
to meet its debt service obligations. The Company's strategy to limit this risk
is to place its investments in high quality credit issues and to limit the
amount of credit exposure with respect to any one issuer or industry. The
Company also selects investments with characteristics such as duration, yield,
currency and liquidity to reflect the underlying characteristics of related
estimated claim liabilities. The Company attempts to minimize the credit risk by
actively monitoring the portfolio and requiring a minimum average credit rating
of A2 as defined by Moody's Investor Service. As of September 30, 2004, the
portfolio has a dollar weighted average rating of Aa3.

      The Company has other receivable amounts subject to credit risk. The most
significant of these are reinsurance premiums receivable from ceding companies
and losses recoverable from retrocessionaires. To mitigate credit risk related
to losses recoverable from retrocessionaires, we establish business and
financial standards for retrocessionaire approval, incorporate ratings by major
rating agencies, consider current market information, and obtain letters of
credit or other forms of collateral where deemed necessary. To mitigate credit
risk related to premium receivables, we have established standards for ceding
companies and, in most cases, have a contractual right of offset thereby
allowing the Company to settle claims net of any premium receivable.

INTEREST RATE RISK

      The Company is exposed to fluctuations in interest rates. Movements in
rates can result in changes in the market value of our fixed income portfolio
and can cause changes in the actual timing of when we expect to receive certain
principal payments. Rising interest rates result in a decline in the market
value of our fixed income portfolio and can expose our portfolio, in particular
our mortgage backed securities, to extension risk. Conversely, a decline in
interest rates will result in a rise in the market value of our fixed income
portfolio and can expose our portfolio, in particular our mortgage

                                      -33-
<PAGE>

backed securities, to prepayment risk. The aggregate hypothetical impact on our
fixed income portfolio, generated from an immediate parallel shift in the
treasury yield curve, as of September 30, 2004 is approximately as follows ($ in
thousands):

<TABLE>
<CAPTION>
                                                          Interest Rate Shift in Basis Points
                                      -----------------------------------------------------------------------
                                        - 100 bp       - 50 bp        Current        + 50 bp       + 100 bp
                                      -----------      ---------      ---------     ---------     -----------
<S>                                   <C>              <C>            <C>           <C>           <C>
Total market value                    $ 2,210,970      2,174,684      2,145,335     2,099,618     $ 2,061,590
Percent change in market value                3.1%           1.4%             -          (2.1%)          (3.9%)
Resulting unrealized appreciation /
  (depreciation)                      $    84,000         47,714         18,365       (27,352)    $   (65,380)
</TABLE>

FOREIGN CURRENCY RISK

      The Company writes business on a worldwide basis. Consequently, the
Company's principal exposure to foreign currency risk is its obligation to
settle claims in foreign currencies. Changes in foreign currency exchange rates
can impact revenues, costs, receivables and liabilities, as measured in the U.S.
dollar, our financial reporting currency. The Company seeks to reduce its
exposure to its largest foreign currency risks by holding invested assets
denominated in foreign currencies to offset liabilities denominated in foreign
currencies.

SOURCES OF FAIR VALUE

      The following table presents the carrying amounts and estimated fair
values of the Company's financial instruments as of September 30, 2004 ($ in
thousands):

<TABLE>
<CAPTION>
                          Carrying
                           Amount     Fair Value
                         ----------   ----------
<S>                      <C>          <C>
Financial assets:
  Fixed maturities       $2,145,335   $2,145,335
  Other invested asset        6,628        6,628

Financial liabilities:
  Debt obligations       $  137,500   $  161,040
</TABLE>

      The fair value of fixed maturities is based on quoted market prices at the
reporting date for those or similar investments. The fair values of debt
obligations are based on quoted market prices. Other invested asset represents a
strategic investment in a non-public reinsurance company and is carried at
estimated fair value.

ITEM 4. CONTROLS AND PROCEDURES

      The Company carried out an evaluation, under the supervision and with the
participation of our management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this
report pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of
1934. Based on that evaluation, our management, including the Chief Executive
Officer and Chief Financial Officer, concluded that our disclosure controls and
procedures are effective in timely alerting them to material information
required to be included in our periodic reports to be filed with the Securities
and Exchange Commission. In addition, there have been no significant changes in
our internal controls over financial

                                      -34-
<PAGE>

reporting that materially adversely affected or are reasonably likely to
materially adversely affect the Company's internal controls over financial
reporting subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies or material weaknesses. It
should be noted that the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.

FORWARD-LOOKING STATEMENTS

      This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are necessarily based on
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by, or on behalf of, us.

      In particular, statements using words such as "may," "should," "estimate,"
"expect," "anticipate," "intend," "believe," "predict," "potential," or words of
similar import generally involve forward-looking statements. For example, we may
have included certain forward-looking statements in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" with regard to trends
in results, prices, volumes, operations, investment results, margins, risk
management and exchange rates. This Form 10-Q may also contain forward-looking
statements with respect to our business and industry, such as those relating to
our strategy and management objectives and trends in market conditions, market
standing, product volumes, investment results and pricing conditions.

      In light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this Form 10-Q
should not be considered as a representation by us or any other person that our
objectives or plans will be achieved. Numerous factors could cause our actual
results to differ materially from those in the forward-looking statements,
including the following:

      (1)   our ability to successfully execute our business strategy;

      (2)   conducting operations in a competitive environment;

      (3)   our ability to maintain our A.M. Best Company rating;

      (4)   significant weather-related or other natural or man-made disasters
            over which the Company has no control;

      (5)   the effectiveness of our loss limitation methods;

      (6)   the adequacy of the Company's liability for unpaid losses and loss
            adjustment expenses;

      (7)   the availability of retrocessional reinsurance on acceptable terms;

      (8)   our ability to maintain our business relationships with reinsurance
            brokers;

      (9)   general political and economic conditions, including the effects of
            civil unrest, war or a prolonged U.S. or global economic downturn or
            recession;

      (10)  the cyclicality of the property and casualty reinsurance business;

      (11)  market volatility and interest rate and currency exchange rate
            fluctuation;

      (12)  tax, regulatory or legal restrictions or limitations applicable to
            the Company or the property and casualty reinsurance business
            generally; and

                                      -35-
<PAGE>

      (13)  changes in the Company's plans, strategies, objectives, expectations
            or intentions, which may happen at any time at the Company's
            discretion.

      As a consequence, current plans, anticipated actions and future financial
condition and results may differ from those expressed in any forward-looking
statements made by or on behalf of the Company. The foregoing factors should not
be construed as exhaustive. Additionally, forward-looking statements speak only
as of the date they are made, and we undertake no obligation to release publicly
the results of any future revisions or updates we may make to forward-looking
statements to reflect new information or circumstances after the date hereof or
to reflect the occurrence of future events.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      In the normal course of business, the Company may become involved in
various claims and legal proceedings. The Company is not currently aware of any
pending or threatened material litigation.

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

      (c) On August 4, 2004, the board of directors of the Company approved a
plan to purchase up to $50,000,000 of its common shares. Following is a summary
of purchases during the quarterly period ended September 30, 2004:

<TABLE>
<CAPTION>
                                                       (c)                  (d)
                                                     Total Number          Maximum
                                                      of Shares         Dollar Amount
                             (a)         (b)         Purchased as       that May Yet
                         Total Number   Average    Part of Publicly      Be Purchased
                          of Shares    Price paid     Announced         Under the Plan
    Period                Purchased    per Share       Plans             or Programs
----------------------   ------------  ----------  ----------------   -------------------
<S>                      <C>           <C>         <C>                <C>
July 1 - 31, 2004                -             -            -         $    50,000,000
August 1 - 31, 2004        349,700     $   28.55      349,700              40,015,000
September 1 - 30, 2004           -             -            -              40,015,000
                           -------                    -------
    Total                  349,700     $   28.55      349,700         $    40,015,000
                           =======                    =======
</TABLE>

ITEM 6. EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number                             Description
-------     -----------------------------------------------------------------
<S>         <C>
31.1        Certification of Gregory E.A. Morrison, Chief Executive Officer of
            Platinum Holdings, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of
            the Securities Exchange Act of 1934, as amended.

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 Securities Exchange Act of 1934, as amended.

32.1        Certification of Gregory E.A. Morrison, 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.
</TABLE>

                                      -36-
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                         PLATINUM UNDERWRITERS HOLDINGS, LTD

Date: November 9, 2004   /s/  GREGORY E. A. MORRISON
                         ----------------------------------------------------
                         By: Gregory E. A. Morrison
                         President and Chief Executive Officer

Date: November 9, 2004   /s/  JOSEPH F. FISHER
                         ----------------------------------------------------
                         By: Joseph F. Fisher
                         Executive Vice President and Chief Financial Officer

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