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
      1934For
      the quarterly period ended March 31,
      2009ORo
                TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      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 of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)
 
 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes ___ No
___
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
 Large
      accelerated filer
              X
              
              Accelerated
      filerNon-accelerated
      filer
              
              (Do
      not check if a smaller reporting company)
              Smaller
      reporting company
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes
___     No X
 
 As of
April 15, 2009, there were outstanding 51,163,377 common shares, par value
$0.01 per share, of the registrant.
  
  PLATINUM
UNDERWRITERS HOLDINGS, LTD.
 QUARTERLY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2009
 
 TABLE OF
CONTENTS
 PagePART
      I  –  FINANCIAL INFORMATIONItem
      1.
                Financial
      StatementsConsolidated
      Balance Sheets as of March 31, 2009 (Unaudited) and December 31,
      2008
                1Consolidated
      Statements of Operations andConsolidated
      Statements of Comprehensive Incomefor
      the Three Months Ended March 31, 2009 and 2008
      (Unaudited)
                2Consolidated
      Statements of Changes in Shareholders’ Equityfor
      the Three Months Ended March 31, 2009 and 2008
      (Unaudited)
                3Consolidated
      Statements of Cash Flowsfor
      the Three Months Ended March 31, 2009 and 2008
      (Unaudited)
                4Notes
      to the Consolidated Financial Statementsfor
      the Three Months Ended March 31, 2009 and 2008
      (Unaudited)
                5Item
      2.
                Management's
      Discussion and Analysis of Financial Condition andResults
      of Operations
                17Item
      3.
                Quantitative
      and Qualitative Disclosures about Market Risk
                26Item
      4.
                Controls
      and Procedures
                28PART
      II  –  OTHER INFORMATIONItem
      1A.
                Risk
      Factors
                28Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                29Item
      6.
                Exhibits
                29SIGNATURES
                30
 
 
 
 PART
I - FINANCIAL INFORMATION
  ITEM 1.
              FINANCIAL
      STATEMENTS
  Platinum
Underwriters Holdings, Ltd. and Subsidiaries
 Consolidated Balance Sheets
 ($ in
thousands, except share data)
 (Unaudited)March 31,
      2009
                                              
                                              
                                              December 31,
      2008ASSETSInvestments:Fixed
      maturity available-for-sale securities at fair value(amortized
      cost – $4,062,567 and $3,267,571,
      respectively)
                                              
                                              $
                                              3,841,550
                                              
                                              
                                              $
                                              3,063,804Fixed
      maturity trading securities at fair value(amortized
      cost – $118,172 and $296,837,
      respectively)
                                              
                                              
                                              125,402
                                              
                                              
                                              
                                              305,237Preferred
      stocks (cost – $1,879 and $3,087,
      respectively)
                                              
                                              
                                              1,879
                                              
                                              
                                              
                                              2,845Short-term
      investments
                                              
                                              
                                              36,728
                                              
                                              
                                              
                                              75,036Total
      investments
                                              
                                              
                                              4,005,559
                                              
                                              
                                              
                                              3,446,922Cash
      and cash equivalents
                                              
                                              
                                              309,082
                                              
                                              
                                              
                                              813,017Accrued
      investment income
                                              
                                              
                                              32,817
                                              
                                              
                                              
                                              29,041Reinsurance
      premiums receivable
                                              
                                              
                                              356,736
                                              
                                              
                                              
                                              307,539Reinsurance
      recoverable on ceded losses and loss adjustment expenses
                                              
                                              
                                              9,833
                                              
                                              
                                              
                                              12,413Prepaid
      reinsurance premiums
                                              
                                              
                                              8,387
                                              
                                              
                                              
                                              10,897Funds
      held by ceding companies
                                              
                                              
                                              136,944
                                              
                                              
                                              
                                              136,278Deferred
      acquisition costs
                                              
                                              
                                              47,828
                                              
                                              
                                              
                                              50,719Income
      tax recoverable
                                              
                                              
                                              4,416
                                              
                                              
                                              
                                              11,973Deferred
      tax assets
                                              
                                              
                                              70,140
                                              
                                              
                                              
                                              71,444Other
      assets
                                              
                                              
                                              9,254
                                              
                                              
                                              
                                              36,920Total
      assets
                                              
                                              $
                                              4,990,996
                                              
                                              
                                              $
                                              4,927,163LIABILITIES
      AND SHAREHOLDERS’ EQUITYLiabilitiesUnpaid
      losses and loss adjustment expenses
                                              
                                              $
                                              2,494,997
                                              
                                              
                                              $
                                              2,463,506Unearned
      premiums
                                              
                                              
                                              213,638
                                              
                                              
                                              
                                              218,890Debt
      obligations
                                              
                                              
                                              250,000
                                              
                                              
                                              
                                              250,000Ceded
      premiums payable
                                              
                                              
                                              1,714
                                              
                                              
                                              
                                              2,918Commissions
      payable
                                              
                                              
                                              127,195
                                              
                                              
                                              
                                              125,551Other
      liabilities
                                              
                                              
                                              73,993
                                              
                                              
                                              
                                              56,901Total
      liabilities
                                              
                                              
                                              3,161,537
                                              
                                              
                                              
                                              3,117,766Shareholders’ EquityPreferred
      shares, $.01 par value, 25,000,000 shares authorized, none and 5,750,000
      shares issued and outstanding, respectively
                                              
                                              
                                              –
                                              
                                              
                                              
                                              57Common
      shares, $.01 par value, 200,000,000 shares authorized, 51,163,377 and
      47,482,161 shares issued and outstanding, respectively
                                              
                                              
                                              512
                                              
                                              
                                              
                                              475Additional
      paid-in capital
                                              
                                              
                                              1,056,434
                                              
                                              
                                              
                                              1,114,135Accumulated
      other comprehensive loss
                                              
                                              
                                              (204,807
                                              )
                                              
                                              
                                              (188,987
                                              )Retained
      earnings
                                              
                                              
                                              977,320
                                              
                                              
                                              
                                              883,717Total
      shareholders' equity
                                              
                                              
                                              1,829,459
                                              
                                              
                                              
                                              1,809,397Total
      liabilities and shareholders' equity
                                              
                                              $
                                              4,990,996
                                              
                                              
                                              $
                                              4,927,163
 
  See
accompanying Notes to the Consolidated Financial Statements.
  - 1
-
  Platinum
Underwriters Holdings, Ltd. and Subsidiaries
 Consolidated Statements of Operations (Unaudited)
and
 Consolidated
Statements of Comprehensive Income (Unaudited)
 For the
Three Months Ended March 31, 2009 and 2008
 ($ in
thousands, except per share data)
 
 2009
                                    
                                    
                                    2008Revenue:Net
      premiums earned
                                    
                                    $
                                    247,752
                                    
                                    
                                    $
                                    301,851Net
      investment income
                                    
                                    
                                    34,246
                                    
                                    
                                    
                                    49,062Net
      realized investment gains
                                    
                                    
                                    20,570
                                    
                                    
                                    
                                    2,972Other
      income (expense)
                                    
                                    
                                    232
                                    
                                    
                                    
                                    (96
                                    )Total
      revenue
                                    
                                    
                                    302,800
                                    
                                    
                                    
                                    353,789Expenses:Net
      losses and loss adjustment expenses
                                    
                                    
                                    144,164
                                    
                                    
                                    
                                    160,203Net
      acquisition expenses
                                    
                                    
                                    40,156
                                    
                                    
                                    
                                    60,542Net
      changes in fair value of derivatives
                                    
                                    
                                    2,417
                                    
                                    
                                    
                                    810Total
      other-than-temporary impairment losses
                                    
                                    
                                    12,411
                                    
                                    
                                    
                                    –Portion
      of impairment losses recognized in othercomprehensive
      income (loss)
                                    
                                    
                                    (9,003
                                    )
                                    
                                    
                                    –Net
      impairment losses
                                    
                                    
                                    3,408
                                    
                                    
                                    
                                    –Operating
      expenses
                                    
                                    
                                    20,868
                                    
                                    
                                    
                                    21,690Net
      foreign currency exchange (gains) losses
                                    
                                    
                                    996
                                    
                                    
                                    
                                    (4,869
                                    )Interest
      expense
                                    
                                    
                                    4,755
                                    
                                    
                                    
                                    4,750Total
      expenses
                                    
                                    
                                    216,764
                                    
                                    
                                    
                                    243,126Income
      before income tax expense
                                    
                                    
                                    86,036
                                    
                                    
                                    
                                    110,663Income
      tax expense
                                    
                                    
                                    1,114
                                    
                                    
                                    
                                    5,492Net
      income
                                    
                                    
                                    84,922
                                    
                                    
                                    
                                    105,171Preferred
      dividends
                                    
                                    
                                    1,301
                                    
                                    
                                    
                                    2,602Net
      income attributable to common shareholders
                                    
                                    $
                                    83,621
                                    
                                    
                                    $
                                    102,569Earnings per common share:Basic
      earnings per common share
                                    
                                    $
                                    1.69
                                    
                                    
                                    $
                                    1.97Diluted
      earnings per common share
                                    
                                    $
                                    1.58
                                    
                                    
                                    $
                                    1.76Comprehensive income:Net
      income
                                    
                                    $
                                    84,922
                                    
                                    
                                    $
                                    105,171Other
      comprehensive loss:Net
      change in unrealized gains and losses onavailable-for-sale
      securities, net of deferred tax
                                    
                                    
                                    (1,576
                                    )
                                    
                                    
                                    (4,121
                                    )Comprehensive
      income
                                    
                                    $
                                    83,346
                                    
                                    
                                    $
                                    101,050Shareholder dividends:Preferred
      shareholder dividends declared
                                    
                                    $
                                    2,602
                                    
                                    
                                    $
                                    2,602Dividends
      declared per preferred share
                                    
                                    
                                    0.45
                                    
                                    
                                    
                                    0.45Common
      shareholder dividends declared
                                    
                                    
                                    4,262
                                    
                                    
                                    
                                    4,154Dividends
      declared per common share
                                    
                                    $
                                    0.08
                                    
                                    
                                    $
                                    0.08
 
 
 See
accompanying Notes to the Consolidated Financial Statements.
  - 2
-
  Platinum
Underwriters Holdings, Ltd. and Subsidiaries
 Consolidated Statements of Changes in Shareholders’
Equity (Unaudited)
 For the
Three Months Ended March 31, 2009 and 2008
 ($ in
thousands)
 
 
 2009
                                                  
                                                  
                                                  2008Preferred shares:Balances
      at beginning of period
                                                  
                                                  $
                                                  57
                                                  
                                                  
                                                  $
                                                  57Conversion
      of preferred shares
                                                  
                                                  
                                                  (57
                                                  )
                                                  
                                                  
                                                  –Balances
      at end of period
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  57Common shares:Balances
      at beginning of period
                                                  
                                                  
                                                  475
                                                  
                                                  
                                                  
                                                  538Issuance
      of common shares
                                                  
                                                  
                                                  1
                                                  
                                                  
                                                  
                                                  1Purchase
      of common shares
                                                  
                                                  
                                                  (23
                                                  )
                                                  
                                                  
                                                  (50
                                                  )Settlement
      of equity awards
                                                  
                                                  
                                                  2
                                                  
                                                  
                                                  
                                                  –Conversion
      of preferred shares
                                                  
                                                  
                                                  57
                                                  
                                                  
                                                  
                                                  –Balances
      at end of period
                                                  
                                                  
                                                  512
                                                  
                                                  
                                                  
                                                  489Additional paid-in capital:Balances
      at beginning of period
                                                  
                                                  
                                                  1,114,135
                                                  
                                                  
                                                  
                                                  1,338,466Issuance
      of common shares
                                                  
                                                  
                                                  247
                                                  
                                                  
                                                  
                                                  1,647Purchase
      of common shares
                                                  
                                                  
                                                  (60,068
                                                  )
                                                  
                                                  
                                                  (167,892
                                                  )Share
      based compensation
                                                  
                                                  
                                                  3,144
                                                  
                                                  
                                                  
                                                  3,027Settlement
      of equity awards
                                                  
                                                  
                                                  (1,024
                                                  )
                                                  
                                                  
                                                  (296
                                                  )Balances
      at end of period
                                                  
                                                  
                                                  1,056,434
                                                  
                                                  
                                                  
                                                  1,174,952Accumulated other comprehensive
      loss:Balances
      at beginning of period
                                                  
                                                  
                                                  (188,987
                                                  )
                                                  
                                                  
                                                  (24,339
                                                  )Cumulative
      effect of accounting change, net of deferred tax
                                                  
                                                  
                                                  (14,244
                                                  )
                                                  
                                                  
                                                  –Portion
      of other-than-temporary impairment losses recognized inother
      comprehensive income (loss)
                                                  
                                                  
                                                  (9,003
                                                  )
                                                  
                                                  
                                                  –Net
      change in unrealized gains and losses on available-for-sale securities,
      net of deferred tax
                                                  
                                                  
                                                  7,427
                                                  
                                                  
                                                  
                                                  (4,121
                                                  )Balances
      at end of period
                                                  
                                                  
                                                  (204,807
                                                  )
                                                  
                                                  
                                                  (28,460
                                                  )Retained earnings:Balances
      at beginning of period
                                                  
                                                  
                                                  883,717
                                                  
                                                  
                                                  
                                                  683,655Cumulative
      effect of accounting change, net of deferred tax
                                                  
                                                  
                                                  14,244
                                                  
                                                  
                                                  
                                                  –Net
      income
                                                  
                                                  
                                                  84,922
                                                  
                                                  
                                                  
                                                  105,171Preferred
      share dividends
                                                  
                                                  
                                                  (1,301
                                                  )
                                                  
                                                  
                                                  (2,602
                                                  )Common
      share dividends
                                                  
                                                  
                                                  (4,262
                                                  )
                                                  
                                                  
                                                  (4,154
                                                  )Balances
      at end of period
                                                  
                                                  
                                                  977,320
                                                  
                                                  
                                                  
                                                  782,070Total
      shareholders’ equity
                                                  
                                                  $
                                                  1,829,459
                                                  
                                                  
                                                  $
                                                  1,929,108
 
  See
accompanying Notes to the Consolidated Financial Statements.
  - 3
-
  Platinum
Underwriters Holdings, Ltd. and Subsidiaries
 Consolidated Statements of Cash Flows
(Unaudited)
 For the
Three Months Ended March 31, 2009 and 2008
 ($ in
thousands)
  
 2009
                                            
                                            
                                            2008Operating Activities:Net
      income
                                            
                                            $
                                            84,922
                                            
                                            
                                            $
                                            105,171Adjustments
      to reconcile net income to cash used in operations:Depreciation
      and amortization
                                            
                                            
                                            7,663
                                            
                                            
                                            
                                            2,136Net
      realized investment (gains) losses
                                            
                                            
                                            (20,570
                                            )
                                            
                                            
                                            (45
                                            )Net
      impairment losses
                                            
                                            
                                            3,408
                                            
                                            
                                            
                                            –Net
      foreign currency exchange (gains) losses
                                            
                                            
                                            996
                                            
                                            
                                            
                                            (4,869
                                            )Share
      based compensation
                                            
                                            
                                            3,144
                                            
                                            
                                            
                                            3,053Deferred
      income tax benefit (expense)
                                            
                                            
                                            1,633
                                            
                                            
                                            
                                            (2,625
                                            )Trading
      securities activities, net
                                            
                                            
                                            204,390
                                            
                                            
                                            
                                            7,554Changes
      in assets and liabilities:(Increase)
      decrease in accrued investment income
                                            
                                            
                                            (3,661
                                            )
                                            
                                            
                                            5,599Increase
      in reinsurance premiums receivable
                                            
                                            
                                            (49,450
                                            )
                                            
                                            
                                            (55,773
                                            )(Increase)
      decrease in funds held by ceding companies
                                            
                                            
                                            (792
                                            )
                                            
                                            
                                            581Decrease
      in deferred acquisition costs
                                            
                                            
                                            2,805
                                            
                                            
                                            
                                            2,424Decrease
      in net current income tax accounts
                                            
                                            
                                            6,503
                                            
                                            
                                            
                                            5,993Increase
      in net unpaid losses and loss adjustment expenses
                                            
                                            
                                            38,077
                                            
                                            
                                            
                                            46,339Decrease
      in net unearned premiums
                                            
                                            
                                            (2,480
                                            )
                                            
                                            
                                            (4,427
                                            )Decrease
      in ceded premiums payable
                                            
                                            
                                            (1,114
                                            )
                                            
                                            
                                            (4,429
                                            )Increase
      in commissions payable
                                            
                                            
                                            1,837
                                            
                                            
                                            
                                            11,704Changes
      in other assets and liabilities
                                            
                                            
                                            (7,750
                                            )
                                            
                                            
                                            (16,064
                                            )Other
      net
                                            
                                            
                                            33
                                            
                                            
                                            
                                            373Net
      cash provided by operating activities
                                            
                                            
                                            269,594
                                            
                                            
                                            
                                            102,695Investing Activities:Proceeds
      from sale of available-for-sale securities
                                            
                                            
                                            128,941
                                            
                                            
                                            
                                            6,177Proceeds
      from maturity or paydown of available-for-sale securities
                                            
                                            
                                            186,916
                                            
                                            
                                            
                                            442,368Acquisition
      of available-for-sale securities
                                            
                                            
                                            (1,044,698
                                            )
                                            
                                            
                                            (299,553
                                            )Acquisition
      of trading securities
                                            
                                            
                                            (14,525
                                            )
                                            
                                            
                                            –Net
      change in short-term investments
                                            
                                            
                                            38,585
                                            
                                            
                                            
                                            (121,064
                                            )Net
      cash provided by (used in) investing activities
                                            
                                            
                                            (704,781
                                            )
                                            
                                            
                                            27,928Financing Activities:Dividends
      paid to preferred shareholders
                                            
                                            
                                            (2,602
                                            )
                                            
                                            
                                            (2,602
                                            )Dividends
      paid to common shareholders
                                            
                                            
                                            (4,262
                                            )
                                            
                                            
                                            (4,154
                                            )Purchase
      of common shares
                                            
                                            
                                            (60,091
                                            )
                                            
                                            
                                            (167,941
                                            )Net
      cash used in financing activities
                                            
                                            
                                            (66,955
                                            )
                                            
                                            
                                            (174,697
                                            )Effect
      of foreign currency exchange rate changes on cash
                                            
                                            
                                            (1,793
                                            )
                                            
                                            
                                            2,139Net
      decrease in cash and cash equivalents
                                            
                                            
                                            (503,935
                                            )
                                            
                                            
                                            (41,935
                                            )Cash
      and cash equivalents at beginning of period
                                            
                                            
                                            813,017
                                            
                                            
                                            
                                            1,076,279Cash
      and cash equivalents at end of period
                                            
                                            $
                                            309,082
                                            
                                            
                                            $
                                            1,034,344Supplemental disclosures of cash flow
      information:Income
      taxes paid
                                            
                                            $
                                            (7,122
                                            )
                                            
                                            $
                                            2,125Interest
      paid
                                            
                                            $
                                            –
                                            
                                            
                                            $
                                            –
 
  See
accompanying Notes to the Consolidated Financial Statements.
  - 4
-
  Platinum
Underwriters Holdings, Ltd. and Subsidiaries
 Notes to the Consolidated Financial Statements
(Unaudited)
 For the
Three Months Ended March 31, 2009 and 2008
   1.
              Basis of
      Presentation
  Platinum
Underwriters Holdings, Ltd. (“Platinum Holdings”) is a Bermuda holding company
organized in 2002.  Platinum Holdings and its consolidated
subsidiaries (collectively, the “Company”) operate through two licensed
reinsurance subsidiaries:  Platinum Underwriters Bermuda, Ltd.
(“Platinum Bermuda”) and Platinum Underwriters Reinsurance, Inc. (“Platinum
US”).  The terms “we,” “us,” and “our” also refer to Platinum Holdings
and its consolidated subsidiaries, unless the context otherwise
indicates.  Through December 31, 2006, we also underwrote
business through Platinum Re (UK) Limited (“Platinum UK”), our other licensed
reinsurance subsidiary.  In 2007, Platinum UK ceased underwriting
reinsurance business.  We provide 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
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 Holdings and its consolidated
subsidiaries, including Platinum Bermuda, Platinum US, Platinum UK, Platinum
Underwriters Finance, Inc. (“Platinum Finance”), Platinum Regency Holdings
(“Platinum Regency”), Platinum Administrative Services, Inc. and Platinum UK
Services Company Limited.  All material inter-company transactions
have been eliminated in preparing these consolidated financial
statements.  The consolidated financial statements included in this
report as of and for the three months ended March 31, 2009 and 2008 are
unaudited and include 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 our Annual Report on Form 10-K for the year ended December 31,
2008.
  The
preparation of financial statements requires us 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.
  Recently
Issued Accounting Pronouncements
  In April
2009, the Financial Accounting Standards Board (the “FASB”) issued FASB Staff
Position No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments” (“FSP 115-2”).  FSP 115-2
amends previous guidance with respect to other-than-temporary impairment for
debt securities.  The objective of the FASB was to make the guidance
more operational and to improve presentation and disclosure of
other-than-temporary impairments.  Under FSP 115-2, if we intend
to sell a debt security or it is more likely than not that we will be required
to sell the debt security before its anticipated recovery, we will recognize the
other-than-temporary impairment in the consolidated statement of operations
equal to the entire difference between the investment’s amortized cost basis and
its fair value at the balance sheet date.  For debt securities, we
must also determine that the present value of expected future cash flows from a
debt security are greater than the amortized cost of the security, otherwise a
credit loss has occurred.  If a credit loss exists, the impairment is
separated into:  (a) the amount of the total other-than-temporary
impairment related to the credit loss, which is recognized in the consolidated
statement of operations and (b) the amount of the total impairment related to
all other factors, which is recognized in other comprehensive income, net of
applicable taxes.  FSP 115-2 is effective for interim and annual
reporting periods ending after June 15, 2009, with early adoption permitted
for periods ending after March 15, 2009.  We adopted
FSP 115-2 as of March 31, 2009.
  Under
FSP 115-2, if we do not intend to sell a debt security held at the
beginning of the period of adoption and it is more likely than not that will not
be required to sell the security before recovery of its amortized cost basis,
then we recognize the cumulative effect of initially applying FSP 115-2 as
an adjustment to the opening balance of retained earnings with a corresponding
adjustment to accumulated other comprehensive income.  Upon adoption
of FSP 115-2, we recorded a cumulative effect adjustment of $14,244,000,
net of deferred tax, which decreased accumulated other comprehensive income and
increased retained earnings as of January 1, 2009.  Also upon
adoption of FSP 115-2, we increased the amortized cost of certain
available-for-sale securities by $15,103,000 and decreased deferred tax assets
by $858,000.  The
adjustment to the amortized cost of these securities represents
other-than-temporary impairments not related to credit and recognized in
earnings prior to the adoption of FSP 115-2.The adoption did not
have any impact on our shareholders’ equity and comprehensive
income.  The effect of FSP 115-2 in 2009 was to increase net
income by recognizing the amount of the total other-than-temporary impairment
not related to the credit loss in other comprehensive income.  The
amount of other-than-temporary impairments not related to credit losses
recognized in other comprehensive income for the three months ended
March 31, 2009 was $9,003,000.
  In April
2009, the FASB issued FASB Staff Position Statement of Financial Accounting
Standards No. 157-4, “Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly” (“FSP 157-4”), which provides additional
guidance for estimating fair value when the volume and level of activity for an
asset or liability has significantly decreased and emphasizes that the fair
value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction (that is, not a forced liquidation or
distressed sale) between market participants at the measurement date under
current market conditions.  FSP 157-4 is effective for interim and
annual reporting periods ending after June 15, 2009 and not
later than the adoption of FSP 115-2.  We adopted
FSP 157-4 as of March 31, 2009.
  - 5
-
  In April
2009, the FASB issued FASB Staff Position Statement of Financial Accounting
Standards No. 107-1 and Accounting Principles Board Opinion 28-1, “Interim
Disclosures about Fair Value of Financial Instruments”
(“FSP 107-1”).  FSP 107-1 increases the frequency of the
disclosures about fair value with the objective of improving the transparency
and quality of information provided to users of financial
statements.  FSP 107-1 is effective for interim reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009.  We adopted FSP 107-1 as of
March 31, 2009.
  In March
2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosure about Derivative Instruments and Hedging Activities – an amendment
of FASB Statement No. 133” (“SFAS 161”).  SFAS 161 amends and
expands the disclosure requirements in Statement of Financial Accounting
Standards No. 133, “Accounting for Derivative Instruments and Hedging
Activities” about an entity’s derivative and hedging activities and how these
activities affect an entity’s financial position, financial performance and cash
flows, thereby improving the transparency of financial
reporting.  SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15,
2008.  The adoption of SFAS 161 did not have any material impact on
the presentation of our consolidated financial statements.
  2.
              Investments
  Available-for-sale
Securities
  The
following table sets forth our fixed maturity available-for-sale securities and
preferred stocks as of March 31, 2009 ($ in thousands):
  Amortized
      Cost
                                
                                
                                Gross
                                  UnrealizedGains
                                
                                
                                Gross
                                  UnrealizedLosses
                                
                                
                                Fair
      ValueU.S.
      Government
                                
                                $
                                4,096
                                
                                
                                
                                469
                                
                                
                                
                                –
                                
                                
                                $
                                4,565U.S.
      Government agencies
                                
                                
                                709,916
                                
                                
                                
                                20,823
                                
                                
                                
                                80
                                
                                
                                
                                730,659Corporate
      bonds
                                
                                
                                808,890
                                
                                
                                
                                8,588
                                
                                
                                
                                58,168
                                
                                
                                
                                759,310Commercial
      mortgage-backed securities
                                
                                
                                476,795
                                
                                
                                
                                314
                                
                                
                                
                                114,497
                                
                                
                                
                                362,612Residential
      mortgage-backed securities
                                
                                
                                1,087,364
                                
                                
                                
                                20,928
                                
                                
                                
                                77,029
                                
                                
                                
                                1,031,263Asset-backed
      securities
                                
                                
                                154,682
                                
                                
                                
                                1,165
                                
                                
                                
                                33,267
                                
                                
                                
                                122,580Municipal
      bonds
                                
                                
                                542,100
                                
                                
                                
                                11,767
                                
                                
                                
                                2,910
                                
                                
                                
                                550,957Non-U.S.
      governments
                                
                                
                                278,724
                                
                                
                                
                                2,429
                                
                                
                                
                                1,549
                                
                                
                                
                                279,604Total
      fixed maturity available-for-sale securities
                                
                                
                                4,062,567
                                
                                
                                
                                66,483
                                
                                
                                
                                287,500
                                
                                
                                
                                3,841,550Preferred
      stocks
                                
                                
                                1,879
                                
                                
                                
                                –
                                
                                
                                
                                –
                                
                                
                                
                                1,879Total
      available-for-sale securities
                                
                                $
                                4,064,446
                                
                                
                                
                                66,483
                                
                                
                                
                                287,500
                                
                                
                                $
                                3,843,429
  U.S.
Government agencies include securities issued by financial institutions under
the Temporary Liquidity Guarantee Program guaranteed by the Federal Deposit
Insurance Corporation, the Federal National Mortgage Association, and other U.S.
Government agencies.
  Unrealized
Gains and Losses
  Net
change in unrealized investment gains and losses on our available-for-sale
securities for the quarter ended March 31, 2009 was as follows ($ in
thousands):
 Available
      for sale securities
                          
                          $
                          (17,008
                          )Less
      deferred tax
                          
                          
                          1,188Cumulative
      effect of accounting change, net of deferred tax
                          
                          
                          14,244Net
      change in unrealized gains and losses
                          
                          $
                          (1,576
                          )
  Gross
unrealized gains and losses on available-for-sale securities as of March 31,
2009 were $66,483,000 and $287,500,000, respectively.  As of March 31,
2009, the single largest unrealized loss was a sub-prime asset-backed security
with an amortized cost of $10,088,000 and an unrealized loss of
$8,470,000.  As of March 31, 2009, the single largest unrealized
loss within our mortgage-backed security portfolio was $7,896,000 related
to a commercial mortgage-backed security with an amortized cost of
$15,040,000.  Investment holdings within our corporate bond portfolio
were diversified across approximately 30 industry sectors and across many
individual issuers and issues within each sector.  As of
March 31, 2009, the single largest unrealized loss within our corporate
bond portfolio was $4,385,000 related to a security with an amortized
cost of $7,394,000.
  - 6
-
  The
following table sets forth our unrealized losses on securities classified as
available-for-sale aggregated by investment category and length of time that
individual securities have been in a continuous unrealized loss position as of
March 31, 2009 ($ in thousands):
 
 Fair
      Value
                                    
                                    
                                    UnrealizedLossLess than twelve months:U.S.
      government agencies
                                    
                                    $
                                    10,221
                                    
                                    
                                    
                                    80Corporate
      bonds
                                    
                                    
                                    234,334
                                    
                                    
                                    
                                    14,718Commercial
      mortgage-backed securities
                                    
                                    
                                    242,097
                                    
                                    
                                    
                                    67,842Residential
      mortgage-backed securities
                                    
                                    
                                    63,936
                                    
                                    
                                    
                                    29,656Asset-backed
      securities
                                    
                                    
                                    48,226
                                    
                                    
                                    
                                    7,559Municipal
      bonds
                                    
                                    
                                    132,661
                                    
                                    
                                    
                                    2,304Non-U.S.
      governments
                                    
                                    
                                    14,491
                                    
                                    
                                    
                                    202Total
                                    
                                    $
                                    745,966
                                    
                                    
                                    
                                    122,361Twelve months or more:U.S.
      government agencies
                                    
                                    $
                                    –
                                    
                                    
                                    
                                    –Corporate
      bonds
                                    
                                    
                                    155,308
                                    
                                    
                                    
                                    43,450Commercial
      mortgage-backed securities
                                    
                                    
                                    114,001
                                    
                                    
                                    
                                    46,655Residential
      mortgage-backed securities
                                    
                                    
                                    51,409
                                    
                                    
                                    
                                    47,373Asset-backed
      securities
                                    
                                    
                                    14,178
                                    
                                    
                                    
                                    25,708Municipal
      bonds
                                    
                                    
                                    16,785
                                    
                                    
                                    
                                    606Non-U.S.
      governments
                                    
                                    
                                    16,075
                                    
                                    
                                    
                                    1,347Total
                                    
                                    $
                                    367,756
                                    
                                    
                                    
                                    165,139Total unrealized losses:U.S.
      government agencies
                                    
                                    $
                                    10,221
                                    
                                    
                                    
                                    80Corporate
      bonds
                                    
                                    
                                    389,642
                                    
                                    
                                    
                                    58,168Commercial
      mortgage-backed securities
                                    
                                    
                                    356,098
                                    
                                    
                                    
                                    114,497Residential
      mortgage-backed securities
                                    
                                    
                                    115,345
                                    
                                    
                                    
                                    77,029Asset-backed
      securities
                                    
                                    
                                    62,404
                                    
                                    
                                    
                                    33,267Municipal
      bonds
                                    
                                    
                                    149,446
                                    
                                    
                                    
                                    2,910Non-U.S.
      governments
                                    
                                    
                                    30,566
                                    
                                    
                                    
                                    1,549Total
                                    
                                    $
                                    1,113,722
                                    
                                    
                                    
                                    287,500
  We
routinely review our available-for-sale investments to determine whether
unrealized losses represent temporary changes in fair value or were the result
of “other-than-temporary impairments.”  The process of determining
whether a security is other-than-temporarily impaired requires judgment and
involves analyzing many factors.  These factors include, but are not
limited to, the overall financial condition of the issuer, the length and
magnitude of an unrealized loss, specific credit events, the collateral
structure and the credit support that may be applicable.  If the
present value of expected future cash flows from a debt security are less than
the amortized cost of the security, then a credit loss has
occurred.  If a credit loss exists, the impairment is determined
as:  (a) the amount related to the credit loss, which is recognized in
the consolidated statement of operations and (b) the amount related to all other
factors, which is recognized in other comprehensive income, net of applicable
taxes and is calculated as amortized cost less fair value plus credit
losses.
  Our
structured securities, consisting of commercial mortgage-backed, residential
mortgage-backed and asset-backed securities, represent our largest unrealized
loss position as of March 31, 2009.  Our non-agency residential
mortgage-backed securities include securities with underlying prime, sub-prime
and Alt-A mortgages.  We analyze our residential mortgage-backed
securities on a periodic basis using default loss models based on the
performance of the underlying loans.  Performance metrics include, but
are not limited to, delinquencies, defaults, foreclosures, prepayment speeds and
cumulative losses incurred.  The expected losses for a mortgage pool
are compared to the break-even loss, which represents the point at which our
tranche begins to experience losses.  We evaluate projected cash flows
as well as other factors in order to determine if credit impairment has
occurred.  For the three months ended March 31, 2009, we recorded
$1,425,000 of credit impairment charges related to non-agency residential
mortgage-backed securities and $140,000 related to sub-prime asset-backed
securities.  Our commercial mortgage-backed securities are evaluated
on a periodic basis using analytical techniques and various metrics including,
but not limited to, the level of subordination, debt-service-coverage ratios,
loan-to-value ratios, delinquencies, defaults and foreclosures.  For
the three months ended March 31, 2009, we recorded $635,000 of credit impairment
charges related to commercial mortgage-backed securities.
  - 7
-
   The
following table sets forth a summary of the credit losses recognized on our
available-for-sale debt securities ($ in thousands):
 Beginning
      balance at January 1, 2009
                          
                          $
                          –Cumulative
      effect of accounting change
                          
                          
                          2,300Credit
      losses on securities not previously impaired
                          
                          
                          945Additional
      credit losses on previously impaired securities
                          
                          
                          1,255Ending
      balance at March 31, 2009
                          
                          
                          4,500
  In
evaluating the potential for other-than-temporary impairment, we consider our
intent to sell a security and whether it is more likely than not that we may be
required to sell a security before a sufficient period of time for the value to
recover the unrealized loss.  Our intent to sell a security is based,
in part, on whether we expect our current and anticipated future positive net
cash flows from operations, as well as proceeds from maturing securities, to
generate sufficient liquidity to meet our obligations.  If we
determine that we intend to sell a security, then the unrealized loss related to
such security, representing the difference between the security’s amortized cost
and its fair value, is recognized in the consolidated statement of
operations.
  We
evaluate our holdings of perpetual preferred stocks by individual issuer and
determine if we can forecast a reasonable period of time for the securities to
recover the unrealized loss position.  If we are unable to forecast a
reasonable period of time sufficient for our perpetual preferred stocks to
recover, an impairment is recorded in the consolidated statement of operations
for the entire unrealized loss.  We recorded other-than-temporary
impairment charges of $1,208,000 on our holdings of perpetual preferred stocks
for the three months ended March 31, 2009.
  Overall,
we believe that the gross unrealized loss in our available-for-sale portfolio
represents temporary declines due primarily to the loss of liquidity in the
financial markets and that the net unrealized losses on our available-for-sale
securities are not necessarily predictive of ultimate performance.  We
also believe that the provisions we have made for other-than-temporary
impairments are adequate and that we have the ability and intent to hold our
securities for a sufficient period of time to recover the value, which may be
until maturity if necessary.  Economic conditions may deteriorate more
than expected and may adversely affect the expected cash flows of our
securities, which in turn may lead to other-than-temporary impairments recorded
in future periods.
  Trading
Securities
  The
following table sets forth the fair value of our fixed maturity trading
securities as of March 31, 2009 ($ in thousands):
 Insurance-linked
      securities
                            
                            $
                            14,530Non-U.S.
      dollar denominated securities:Corporate
      bonds
                            
                            
                            3,244Non-U.S.
      governments
                            
                            
                            107,628Total
      trading securities
                            
                            $
                            125,402
  We
elected to apply the fair value measurement attributes of SFAS 159 to our
investments in insurance-linked securities.  Insurance-linked
securities have exposure to catastrophe loss, which we actively
manage.  We believe that the various risk elements of insurance-linked
securities are more appropriately accounted for in accordance with the fair
value measurement attributes of SFAS 159.  We have included
insurance-linked securities at a fair value of $14,530,000 in our fixed maturity
trading securities on the consolidated balance sheets, and have recorded an
unfavorable change in the mark-to-market of $3,000 in net realized investment
gains in the consolidated statement of operations.  These securities
are included in investing activities in the consolidated statement of cash
flows.
  Net
realized investment gains include losses for mark-to-market adjustments of
$1,199,000 on trading securities for the three months ended March 31,
2009.
  Net
Investment Income
  The
following table sets forth our net investment income for the three months ended
March 31, 2009 ($ in thousands):
 Fixed
      maturity securities
                          
                          $
                          33,566Short-term
      investments and cash and cash equivalents
                          
                          
                          976Funds
      held
                          
                          
                          872Subtotal
                          
                          
                          35,414Less
      investment expenses
                          
                          
                          1,168Net
      investment income
                          
                          $
                          34,246
  - 8
-
  Net
Realized Investment Gains and Losses
  Proceeds
from sales, maturities and calls of fixed maturity available-for-sale securities
were $315,857,000 for the three months ended March 31,
2009.  Proceeds from sales, maturities and calls of fixed maturity
trading securities were $327,861,000 for the three months ended March 31,
2009.  There were no sales of preferred stocks for the three months
ended March 31, 2009.
  The
following table sets forth our net realized investment gains and losses for the
three months ended March 31, 2009 ($ in thousands):
 Net
      gains (losses) on the sale of investments:Gross
      realized gains
                            
                            $
                            22,162Gross
      realized losses
                            
                            
                            (393
                            )Subtotal
                            
                            
                            21,769Mark-to-market
      adjustments on trading securities
                            
                            
                            (1,199
                            )Net
      realized investment gains
                            
                            $
                            20,570
  Maturities
  Actual
maturities of our fixed maturity available-for-sale and trading securities could
differ from stated maturities due to call or prepayment
provisions.  The following table sets forth the amortized cost and
fair value of our fixed maturity available-for-sale and trading securities by
stated maturity as of March 31, 2009 ($ in thousands):
 
 Amortized
                        Cost
                      
                      
                      Fair
      ValueDue
      in one year or less
                      
                      $
                      192,590
                      
                      
                      $
                      193,137Due
      from one to five years
                      
                      
                      1,510,665
                      
                      
                      
                      1,531,472Due
      from five to ten years
                      
                      
                      465,931
                      
                      
                      
                      460,675Due
      in ten or more years
                      
                      
                      292,712
                      
                      
                      
                      265,212Mortgage-backed
      and asset-backed securities
                      
                      
                      1,718,841
                      
                      
                      
                      1,516,456Total
                      
                      $
                      4,180,739
                      
                      
                      $
                      3,966,952
  3.
              Fair Value
      Measurements
  We
consider prices for actively traded government securities and exchange
traded preferred stocks to be based on quoted prices in active markets for
identical assets (Level 1 as defined by Statement of Financial Accounting
Standards No. 157, “Fair Value Measurements” (“SFAS 157”)).  The
fair values of our other fixed maturity securities, which generally include
mortgage-backed and asset-backed securities, corporate bonds, municipal bonds,
and bonds issued or
guaranteed by governmental entities, are based on prices obtained from
independent pricing vendors, index providers, or broker-dealers using observable
inputs (Level 2 as defined by SFAS 157).  The observable inputs used
in standard market valuation pricing models may include, but are not limited to,
credit ratings, interest rates and yield curves at commonly quoted intervals,
volatilities, prepayment speeds, loss severities, credit risks and default
rates.  The fair values of our derivative instruments, which are
included in other liabilities in the consolidated balance sheet, are determined
by management primarily using unobservable inputs through the application of our
own assumptions and internal valuation pricing models (Level 3 as defined by
SFAS 157).
  - 9
-
  The
following table presents the fair value measurement levels for all assets and
liabilities which the Company has recorded at fair value as of March 31,
2009 ($ in thousands):
 
 Fair
      Value Measurement Using:Total
                              
                              
                              Level
      1
                              
                              
                              Level
      2
                              
                              
                              Level
      3Financial assets:U.S.
      government
                              
                              $
                              4,565
                              
                              
                              
                              4,565
                              
                              
                              
                              –
                              
                              
                              $
                              –U.S.
      government agencies
                              
                              
                              730,659
                              
                              
                              
                              –
                              
                              
                              
                              730,659
                              
                              
                              
                              –Corporate
                              
                              
                              762,554
                              
                              
                              
                              13,060
                              
                              
                              
                              749,494
                              
                              
                              
                              –Commercial
      mortgage-backed securities
                              
                              
                              362,612
                              
                              
                              
                              –
                              
                              
                              
                              362,612
                              
                              
                              
                              –Residential
      mortgage-backed securities
                              
                              
                              1,031,263
                              
                              
                              
                              –
                              
                              
                              
                              1,031,263
                              
                              
                              
                              –Asset-backed
      securities
                              
                              
                              122,581
                              
                              
                              
                              –
                              
                              
                              
                              122,581
                              
                              
                              
                              –Municipals
                              
                              
                              550,957
                              
                              
                              
                              –
                              
                              
                              
                              550,957
                              
                              
                              
                              –Non-U.S.
      governments
                              
                              
                              387,232
                              
                              
                              
                              32,487
                              
                              
                              
                              354,745
                              
                              
                              
                              –Insurance-linked
      securities
                              
                              
                              14,530
                              
                              
                              
                              –
                              
                              
                              
                              14,530
                              
                              
                              
                              –Preferred
      stocks
                              
                              
                              1,879
                              
                              
                              
                              1,879
                              
                              
                              
                              –
                              
                              
                              
                              –Short-term
      investments
                              
                              
                              36,728
                              
                              
                              
                              –
                              
                              
                              
                              36,728
                              
                              
                              
                              –Total
                              
                              $
                              4,005,560
                              
                              
                              
                              51,991
                              
                              
                              
                              3,953,569
                              
                              
                              $
                              –Financial liabilities:Derivative
      instruments
                              
                              
                              4,689
                              
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              4,689Total
                              
                              $
                              4,689
                              
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              $
                              4,689
  The
following table presents the reconciliation of the beginning and ending fair
value measurements of our Level 3 liabilities, consisting of derivative
instruments, measured at fair value using significant unobservable inputs for
the three months ended March 31, 2009 ($ in thousands):
 Beginning
      balance at January 1, 2009
                              
                              $
                              (4,753
                              )Purchases,
      issuances, and settlements
                              
                              
                              2,481Total
      unrealized and realized losses included in earnings
                              
                              
                              (2,417
                              )Ending
      balance at March 31, 2009
                              
                              
                              (4,689
                              )Losses
      for the period attributable to the net change in unrealized losses
      relating to liabilities outstanding
                              
                              $
                              (2,417
                              )
  The net
change in unrealized losses of $2,417,000 relating to derivative instruments
outstanding was included in the net changes in fair value of derivatives
included in the consolidated statement operations for the three months ended
March 31, 2009.  We settled balances of $2,481,000 on derivatives
in the three months ended March 31, 2009 and such payments were also
included in the net changes in fair value of derivatives in the consolidated
statement of operations.
  4.
              Derivative
      Instruments
  In August
2008, we entered into a derivative agreement with Topiary Capital Limited
(“Topiary”), a Cayman Islands special purpose vehicle, that provides us
with the ability to recover up to $200,000,000 should two catastrophic events
involving U.S. wind, U.S. earthquake, European wind or Japanese earthquake occur
that meet specified loss criteria during any of three annual periods commencing
August 1, 2008.  Any recovery we make under this contract is
based on an index using insured property industry loss estimates that are
compiled by Property Claim Services, a division of Insurance Services Offices,
Inc., for certain U.S. perils, and parametric triggers for certain non-U.S.
perils, and is not based on actual losses we may incur.  Consequently,
the transaction is accounted for as a derivative and carried at the estimated
net fair value.
  - 10
-
  Under the
terms of the agreement, we will pay to Topiary approximately $9,650,000 during
each of the three annual periods.  The net derivative liability at
March 31, 2009 of $4,689,000 was included in other liabilities on our
consolidated balance sheet.  The change in net fair value of
$2,417,000 was included in the change in fair value of derivatives on our
consolidated statement of operations.
  Topiary’s
limit of loss is collateralized with high quality investment grade securities in
a secured collateral account.  The performance of the securities in
the collateral account is guaranteed under a total return swap agreement with
Goldman Sachs International whose obligations under the swap agreement are
guaranteed by Goldman Sachs Group, Inc.
  5.
              Earnings Per
      Share
  The
following is a calculation of the basic and diluted earnings or loss per common
share for the three months ended March 31, 2009 and 2008 ($ in thousands,
except per share data):
 
 Net
                                      Income
                                    
                                    
                                    WeightedAverage
                                      CommonShares
                                      Outstanding
                                    
                                    
                                    Earnings
                                      Per
      Common
                                      ShareThree Months Ended March 31,
      2009:Basic
      earnings per share:Net
      income attributable to common shareholders
                                    
                                    $
                                    83,621
                                    
                                    
                                    
                                    49,521
                                    
                                    
                                    $
                                    1.69Effect
      of dilutive securities:Common
      share options, restricted common shares and common share
    units
                                    
                                    
                                    –
                                    
                                    
                                    
                                    1,114Conversion
      of preferred shares
                                    
                                    
                                    –
                                    
                                    
                                    
                                    3,067Preferred
      share dividends
                                    
                                    
                                    1,301
                                    
                                    
                                    
                                    –Adjusted
      net income for diluted earnings per share
                                    
                                    $
                                    84,922
                                    
                                    
                                    
                                    53,702
                                    
                                    
                                    $
                                    1.58Three Months Ended March 31,
      2008:Basic
      earnings per share:Net
      income attributable to common shareholders
                                    
                                    $
                                    102,569
                                    
                                    
                                    
                                    52,104
                                    
                                    
                                    $
                                    1.97Effect
      of dilutive securities:Common
      share options, restricted common shares and common share
    units
                                    
                                    
                                    –
                                    
                                    
                                    
                                    2,662Conversion
      of preferred shares
                                    
                                    
                                    –
                                    
                                    
                                    
                                    5,108Preferred
      share dividends
                                    
                                    
                                    2,602
                                    
                                    
                                    
                                    –Adjusted
      net income for diluted earnings per share
                                    
                                    $
                                    105,171
                                    
                                    
                                    
                                    59,874
                                    
                                    
                                    $
                                    1.76
  6.
              Operating Segment
      Information
  We
conduct our worldwide reinsurance business through three operating segments:
Property and Marine, Casualty and Finite Risk.  The Property and
Marine operating segment includes property reinsurance, crop reinsurance and
marine and aviation reinsurance.  This operating segment includes
reinsurance contracts that are either catastrophe excess-of-loss, per-risk
excess-of-loss or proportional contracts.  The Casualty operating
segment includes principally reinsurance contracts that cover umbrella
liability, general and product liability, professional liability, workers'
compensation, casualty clash, automobile liability, surety, trade credit,
political risk and accident and health.  The Finite Risk operating
segment includes principally structured reinsurance contracts with ceding
companies whose needs may not be met efficiently through traditional reinsurance
products.  In exchange for contractual features that limit our
downside risk, reinsurance contracts that we classify as finite risk provide the
potential for significant profit commission to the ceding
company.  The classes of risks underwritten through finite risk
contracts are generally consistent with the classes covered by traditional
products.  The finite risk contracts that we underwrite generally
provide prospective protection, meaning coverage is provided for losses that are
incurred after inception of the contract, as contrasted with retrospective
coverage, which covers losses that are incurred prior to inception of the
contract.  The three main categories of finite risk contracts are
quota share, multi-year excess-of-loss and whole account aggregate stop
loss.
  - 11
-
  In
managing our operating segments, we use measures such as underwriting income and
underwriting ratios to evaluate segment performance.  We do not
allocate assets or certain income and expenses such as investment income,
interest expense and certain corporate expenses to segments.  The
measures we use in evaluating our 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 together with a reconciliation of underwriting income to income before
income tax expense for the three months ended March 31, 2009 and 2008 ($ in
thousands):
 
 Property
                                        and
      Marine
                                      
                                      
                                      Casualty
                                      
                                      
                                      Finite
      Risk
                                      
                                      
                                      TotalThree Months Ended March 31,
      2009:Net
      premiums written
                                      
                                      $
                                      141,735
                                      
                                      
                                      
                                      98,014
                                      
                                      
                                      
                                      5,523
                                      
                                      
                                      $
                                      245,272Net
      premiums earned
                                      
                                      
                                      133,671
                                      
                                      
                                      
                                      109,960
                                      
                                      
                                      
                                      4,121
                                      
                                      
                                      
                                      247,752Net
      losses and LAE
                                      
                                      
                                      77,451
                                      
                                      
                                      
                                      59,141
                                      
                                      
                                      
                                      7,572
                                      
                                      
                                      
                                      144,164Net
      acquisition expenses
                                      
                                      
                                      17,364
                                      
                                      
                                      
                                      26,221
                                      
                                      
                                      
                                      (3,429
                                      )
                                      
                                      
                                      40,156Other
      underwriting expenses
                                      
                                      
                                      8,159
                                      
                                      
                                      
                                      5,669
                                      
                                      
                                      
                                      300
                                      
                                      
                                      
                                      14,128Segment
      underwriting income (loss)
                                      
                                      $
                                      30,697
                                      
                                      
                                      
                                      18,929
                                      
                                      
                                      
                                      (322
                                      )
                                      
                                      
                                      49,304Net
      investment income
                                      
                                      
                                      
                                      34,246Net
      realized investment gains
                                      
                                      
                                      
                                      20,570Net
      impairment losses
                                      
                                      
                                      
                                      (3,408
                                      )Net
      changes in fair value of derivatives
                                      
                                      
                                      
                                      (2,417
                                      )Net
      foreign currency exchange losses
                                      
                                      
                                      
                                      (996
                                      )Other
      income
                                      
                                      
                                      
                                      232Corporate
      expenses not allocated to segments
                                      
                                      
                                      
                                      (6,740
                                      )Interest
      expense
                                      
                                      
                                      
                                      (4,755
                                      )Income
      before income tax expense
                                      
                                      
                                      $
                                      86,036Ratios:Net
      loss and LAE
                                      
                                      
                                      57.9
                                      %
                                      
                                      
                                      53.8
                                      %
                                      
                                      
                                      183.7
                                      %
                                      
                                      
                                      58.2
                                      %Net
      acquisition expense
                                      
                                      
                                      13.0
                                      %
                                      
                                      
                                      23.8
                                      %
                                      
                                      
                                      (83.2
                                      %)
                                      
                                      
                                      16.2
                                      %Other
      underwriting expense
                                      
                                      
                                      6.1
                                      %
                                      
                                      
                                      5.2
                                      %
                                      
                                      
                                      7.3
                                      %
                                      
                                      
                                      5.7
                                      %Combined
                                      
                                      
                                      77.0
                                      %
                                      
                                      
                                      82.8
                                      %
                                      
                                      
                                      107.8
                                      %
                                      
                                      
                                      80.1
                                      %Three Months Ended March 31,
      2008:Net
      premiums written
                                      
                                      $
                                      168,817
                                      
                                      
                                      
                                      125,576
                                      
                                      
                                      
                                      1,878
                                      
                                      
                                      $
                                      296,271Net
      premiums earned
                                      
                                      
                                      153,390
                                      
                                      
                                      
                                      147,495
                                      
                                      
                                      
                                      966
                                      
                                      
                                      
                                      301,851Net
      losses and LAE
                                      
                                      
                                      62,039
                                      
                                      
                                      
                                      99,393
                                      
                                      
                                      
                                      (1,229
                                      )
                                      
                                      
                                      160,203Net
      acquisition expenses
                                      
                                      
                                      20,654
                                      
                                      
                                      
                                      37,488
                                      
                                      
                                      
                                      2,400
                                      
                                      
                                      
                                      60,542Other
      underwriting expenses
                                      
                                      
                                      8,596
                                      
                                      
                                      
                                      6,795
                                      
                                      
                                      
                                      310
                                      
                                      
                                      
                                      15,701Segment
      underwriting income (loss)
                                      
                                      $
                                      62,101
                                      
                                      
                                      
                                      3,819
                                      
                                      
                                      
                                      (515
                                      )
                                      
                                      
                                      65,405Net
      investment income
                                      
                                      
                                      
                                      49,062Net
      realized investment gains
                                      
                                      
                                      
                                      2,972Net
      changes in fair value of derivatives
                                      
                                      
                                      
                                      (810
                                      )Net
      foreign currency exchange gains
                                      
                                      
                                      
                                      4,869Other
      expense
                                      
                                      
                                      
                                      (96
                                      )Corporate
      expenses not allocated to segments
                                      
                                      
                                      
                                      (5,989
                                      )Interest
      expense
                                      
                                      
                                      
                                      (4,750
                                      )Income
      before income tax expense
                                      
                                      
                                      $
                                      110,663Ratios:Net
      loss and LAE
                                      
                                      
                                      40.4
                                      %
                                      
                                      
                                      67.4
                                      %
                                      
                                      
                                      (127.2
                                      %)
                                      
                                      
                                      53.1
                                      %Net
      acquisition expense
                                      
                                      
                                      13.5
                                      %
                                      
                                      
                                      25.4
                                      %
                                      
                                      
                                      248.4
                                      %
                                      
                                      
                                      20.1
                                      %Other
      underwriting expense
                                      
                                      
                                      5.6
                                      %
                                      
                                      
                                      4.6
                                      %
                                      
                                      
                                      32.1
                                      %
                                      
                                      
                                      5.2
                                      %Combined
                                      
                                      
                                      59.5
                                      %
                                      
                                      
                                      97.4
                                      %
                                      
                                      
                                      153.3
                                      %
                                      
                                      
                                      78.4
                                      %
  - 12
-
  7.
              Income
      Taxes
  We
provide for income tax expense or benefit based upon income reported in the
consolidated financial statements and the provisions of currently enacted tax
laws.  Platinum Holdings and Platinum Bermuda are incorporated in
Bermuda.  Under current Bermuda law, they are not taxed on any Bermuda
income or capital gains and they have received an assurance that if any
legislation is enacted in Bermuda that would impose tax computed on profits or
income, or computed on any capital asset, gain or appreciation, or any tax in
the nature of estate duty or inheritance tax, then the imposition of any such
tax will not be applicable to Platinum Holdings or Platinum Bermuda or any of
their respective operations, shares, debentures or other obligations until
March 28, 2016.  We also have subsidiaries in the U.S., the
United Kingdom and Ireland that are subject to the tax laws
thereof.  The income tax returns of our U.S. based subsidiaries that
remain open to examination are for calendar years 2003 and forward.  The
income tax returns of 2003 and 2004 are currently under
examination.
  A
reconciliation of expected income tax expense, computed by applying a 35% income
tax rate to income before income taxes, to actual income tax expense for the
three months ended March 31, 2009 and 2008 was as follows ($ in
thousands):
 
 2009
                      
                      
                      2008Expected
      income tax expense at 35%
                      
                      $
                      30,113
                      
                      
                      $
                      38,732Effect
      of foreign income subject to tax at rates other than 35%
                      
                      
                      (29,419
                      )
                      
                      
                      (32,704
                      )Tax
      exempt investment income
                      
                      
                      (1,217
                      )
                      
                      
                      (454
                      )Other,
      net
                      
                      
                      1,637
                      
                      
                      
                      (82
                      )Income
      tax expense
                      
                      $
                      1,114
                      
                      
                      $
                      5,492
  8.
              Condensed
      Consolidating Financial
Information
  Platinum
Finance is a U.S. intermediate holding company and a wholly owned subsidiary of
Platinum Regency.  The outstanding Series B 7.5% Notes issued by
Platinum Finance and due June 1, 2017 are fully and unconditionally
guaranteed by Platinum Holdings.
  The
payment of dividends from our regulated reinsurance subsidiaries is limited by
applicable laws and statutory requirements of the jurisdictions in which the
subsidiaries operate, including Bermuda, the U.S., the United Kingdom and
Ireland.  Based on the regulatory restrictions of the applicable
jurisdictions, the maximum amount available for payment of dividends or other
distributions by Platinum US to Platinum Finance in 2009 without prior
regulatory approval is estimated to be approximately $57,407,000.  The
maximum amount available for payment of dividends or other distributions by the
reinsurance subsidiaries of Platinum Holdings in 2009, including Platinum US,
without prior regulatory approval is estimated to be approximately
$386,380,000.  During the three months ended March 31, 2009,
dividends of $40,000,000 were paid by Platinum Bermuda to Platinum
Holdings.
  The
tables below present condensed consolidating financial information of Platinum
Holdings, Platinum Finance and the non-guarantor subsidiaries of Platinum
Holdings as of March 31, 2009 and December 31, 2008 and for the three
months ended March 31, 2009 and 2008
($ in thousands):
 
 Condensed
      Consolidating Balance Sheet
                                      March 31,
      2009
                                    
                                    Platinum
      Holdings
                                    
                                    
                                    Platinum
      Finance
                                    
                                    
                                    Non-guarantor
      Subsidiaries
                                    
                                    
                                    Consolidating
      Adjustments
                                    
                                    
                                    ConsolidatedASSETSTotal
      investments
                                    
                                    $
                                    –
                                    
                                    
                                    
                                    1,565
                                    
                                    
                                    
                                    4,003,994
                                    
                                    
                                    
                                    –
                                    
                                    
                                    $
                                    4,005,559Investment
      in subsidiaries
                                    
                                    
                                    1,785,834
                                    
                                    
                                    
                                    521,754
                                    
                                    
                                    
                                    302,222
                                    
                                    
                                    
                                    (2,609,810
                                    )
                                    
                                    
                                    –Cash
      and cash equivalents
                                    
                                    
                                    36,407
                                    
                                    
                                    
                                    11,119
                                    
                                    
                                    
                                    261,556
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    309,082Reinsurance
      assets
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    559,728
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    559,728Other
      assets
                                    
                                    
                                    12,786
                                    
                                    
                                    
                                    2,453
                                    
                                    
                                    
                                    101,388
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    116,627Total
      assets
                                    
                                    $
                                    1,835,027
                                    
                                    
                                    
                                    536,891
                                    
                                    
                                    
                                    5,228,888
                                    
                                    
                                    
                                    (2,609,810
                                    )
                                    
                                    $
                                    4,990,996LIABILITIES
      AND
                                      SHAREHOLDERS’
      EQUITYLiabilitiesReinsurance
      liabilities
                                    
                                    $
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    2,837,544
                                    
                                    
                                    
                                    –
                                    
                                    
                                    $
                                    2,837,544Debt
      obligations
                                    
                                    
                                    –
                                    
                                    
                                    
                                    250,000
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    250,000Other
      liabilities
                                    
                                    
                                    5,568
                                    
                                    
                                    
                                    5,409
                                    
                                    
                                    
                                    63,016
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    73,993Total
      liabilities
                                    
                                    
                                    5,568
                                    
                                    
                                    
                                    255,409
                                    
                                    
                                    
                                    2,900,560
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    3,161,537Shareholders’ EquityPreferred
      shares
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –Common
      shares
                                    
                                    
                                    512
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    6,250
                                    
                                    
                                    
                                    (6,250
                                    )
                                    
                                    
                                    512Additional
      paid-in capital
                                    
                                    
                                    1,056,434
                                    
                                    
                                    
                                    194,224
                                    
                                    
                                    
                                    1,898,502
                                    
                                    
                                    
                                    (2,092,726
                                    )
                                    
                                    
                                    1,056,434Accumulated
      other comprehensive loss
                                    
                                    
                                    (204,807
                                    )
                                    
                                    
                                    (30,104
                                    )
                                    
                                    
                                    (234,924
                                    )
                                    
                                    
                                    265,028
                                    
                                    
                                    
                                    (204,807
                                    )Retained
      earnings
                                    
                                    
                                    977,320
                                    
                                    
                                    
                                    117,362
                                    
                                    
                                    
                                    658,500
                                    
                                    
                                    
                                    (775,862
                                    )
                                    
                                    
                                    977,320Total
      shareholders’ equity
                                    
                                    
                                    1,829,459
                                    
                                    
                                    
                                    281,482
                                    
                                    
                                    
                                    2,328,328
                                    
                                    
                                    
                                    (2,609,810
                                    )
                                    
                                    
                                    1,829,459Total
      liabilities and shareholders’ equity
                                    
                                    $
                                    1,835,027
                                    
                                    
                                    
                                    536,891
                                    
                                    
                                    
                                    5,228,888
                                    
                                    
                                    
                                    (2,609,810
                                    )
                                    
                                    $
                                    4,990,996
  - 13
-
  Condensed
      Consolidating Balance Sheet
                                    December 31,
      2008
                                  
                                  Platinum
      Holdings
                                  
                                  
                                  Platinum
      Finance
                                  
                                  
                                  Non-guarantor
      Subsidiaries
                                  
                                  
                                  Consolidating
      Adjustments
                                  
                                  
                                  ConsolidatedASSETSTotal
      investments
                                  
                                  $
                                  –
                                  
                                  
                                  
                                  2,140
                                  
                                  
                                  
                                  3,444,782
                                  
                                  
                                  
                                  –
                                  
                                  
                                  $
                                  3,446,922Investment
      in subsidiaries
                                  
                                  
                                  1,736,321
                                  
                                  
                                  
                                  518,682
                                  
                                  
                                  
                                  302,500
                                  
                                  
                                  
                                  (2,557,503
                                  )
                                  
                                  
                                  –Cash
      and cash equivalents
                                  
                                  
                                  66,325
                                  
                                  
                                  
                                  10,468
                                  
                                  
                                  
                                  736,224
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  813,017Reinsurance
      assets
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  517,846
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  517,846Other
      assets
                                  
                                  
                                  14,158
                                  
                                  
                                  
                                  2,652
                                  
                                  
                                  
                                  132,568
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  149,378Total
      assets
                                  
                                  $
                                  1,816,804
                                  
                                  
                                  
                                  533,942
                                  
                                  
                                  
                                  5,133,920
                                  
                                  
                                  
                                  (2,557,503
                                  )
                                  
                                  $
                                  4,927,163LIABILITIES
      AND
                                    SHAREHOLDERS’
      EQUITYLiabilitiesReinsurance
      liabilities
                                  
                                  $
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  2,810,865
                                  
                                  
                                  
                                  –
                                  
                                  
                                  $
                                  2,810,865Debt
      obligations
                                  
                                  
                                  –
                                  
                                  
                                  
                                  250,000
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  250,000Other
      liabilities
                                  
                                  
                                  7,407
                                  
                                  
                                  
                                  2,412
                                  
                                  
                                  
                                  47,082
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  56,901Total
      liabilities
                                  
                                  
                                  7,407
                                  
                                  
                                  
                                  252,412
                                  
                                  
                                  
                                  2,857,947
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  3,117,766Shareholders’ EquityPreferred
      shares
                                  
                                  
                                  57
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  57Common
      shares
                                  
                                  
                                  475
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  6,250
                                  
                                  
                                  
                                  (6,250
                                  )
                                  
                                  
                                  475Additional
      paid-in capital
                                  
                                  
                                  1,114,135
                                  
                                  
                                  
                                  194,264
                                  
                                  
                                  
                                  1,898,582
                                  
                                  
                                  
                                  (2,092,846
                                  )
                                  
                                  
                                  1,114,135Accumulated
      other comprehensive loss
                                  
                                  
                                  (188,987
                                  )
                                  
                                  
                                  (27,899
                                  )
                                  
                                  
                                  (216,870
                                  )
                                  
                                  
                                  244,769
                                  
                                  
                                  
                                  (188,987
                                  )Retained
      earnings
                                  
                                  
                                  883,717
                                  
                                  
                                  
                                  115,165
                                  
                                  
                                  
                                  588,011
                                  
                                  
                                  
                                  (703,176
                                  )
                                  
                                  
                                  883,717Total
      shareholders' equity
                                  
                                  
                                  1,809,397
                                  
                                  
                                  
                                  281,530
                                  
                                  
                                  
                                  2,275,973
                                  
                                  
                                  
                                  (2,557,503
                                  )
                                  
                                  
                                  1,809,397Total
      liabilities and shareholders’ equity
                                  
                                  $
                                  1,816,804
                                  
                                  
                                  
                                  533,942
                                  
                                  
                                  
                                  5,133,920
                                  
                                  
                                  
                                  (2,557,503
                                  )
                                  
                                  $
                                  4,927,163
   Condensed
      ConsolidatingStatement
      of Operations
                                          For
      the Three Months Ended March 31, 2009
                                        
                                        Platinum
      Holdings
                                        
                                        
                                        Platinum
      Finance
                                        
                                        
                                        Non-guarantor
      Subsidiaries
                                        
                                        
                                        Consolidating
      Adjustments
                                        
                                        
                                        ConsolidatedRevenue:Net
      premiums earned
                                        
                                        $
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        247,752
                                        
                                        
                                        
                                        –
                                        
                                        
                                        $
                                        247,752Net
      investment income
                                        
                                        
                                        30
                                        
                                        
                                        
                                        20
                                        
                                        
                                        
                                        34,196
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        34,246Net
      realized investment gains
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        20,570
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        20,570Other
      income (expense)
                                        
                                        
                                        454
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        (222
                                        )
                                        
                                        
                                        –
                                        
                                        
                                        
                                        232Total
      revenue
                                        
                                        
                                        484
                                        
                                        
                                        
                                        20
                                        
                                        
                                        
                                        302,296
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        302,800Expenses:Net
      losses and loss adjustment expenses
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        144,164
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        144,164Net
      acquisition expenses
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        40,156
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        40,156Net
      changes in fair value of derivatives
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        2,417
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        2,417Net
      impairment losses
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        3,408
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        3,408Operating
      expenses
                                        
                                        
                                        6,543
                                        
                                        
                                        
                                        108
                                        
                                        
                                        
                                        14,217
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        20,868Net
      foreign currency exchange losses
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        996
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        996Interest
      expense
                                        
                                        
                                        –
                                        
                                        
                                        
                                        4,755
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        4,755Total
      expenses
                                        
                                        
                                        6,543
                                        
                                        
                                        
                                        4,863
                                        
                                        
                                        
                                        205,358
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        216,764Income
      (loss) before income taxexpense
      (benefit)
                                        
                                        
                                        (6,059
                                        )
                                        
                                        
                                        (4,843
                                        )
                                        
                                        
                                        96,938
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        86,036Income
      tax expense (benefit)
                                        
                                        
                                        150
                                        
                                        
                                        
                                        (1,695
                                        )
                                        
                                        
                                        2,659
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        1,114Income
      (loss) before equity inearnings
      of subsidiaries
                                        
                                        
                                        (6,209
                                        )
                                        
                                        
                                        (3,148
                                        )
                                        
                                        
                                        94,279
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        84,922Equity
      in earnings of subsidiaries
                                        
                                        
                                        91,131
                                        
                                        
                                        
                                        3,751
                                        
                                        
                                        
                                        371
                                        
                                        
                                        
                                        (95,253
                                        )
                                        
                                        
                                        –Net
      income
                                        
                                        
                                        84,922
                                        
                                        
                                        
                                        603
                                        
                                        
                                        
                                        94,650
                                        
                                        
                                        
                                        (95,253
                                        )
                                        
                                        
                                        84,922Preferred
      dividends
                                        
                                        
                                        1,301
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        –
                                        
                                        
                                        
                                        1,301Net
      income attributable to common shareholders
                                        
                                        $
                                        83,621
                                        
                                        
                                        
                                        603
                                        
                                        
                                        
                                        94,650
                                        
                                        
                                        
                                        (95,253
                                        )
                                        
                                        $
                                        83,621
 - 14
-
  Consolidating
      Statement of Operations
                                      For
      the Three Months Ended March 31, 2008
                                    
                                    Platinum
      Holdings
                                    
                                    
                                    Platinum
      Finance
                                    
                                    
                                    Non-guarantor
      Subsidiaries
                                    
                                    
                                    Consolidating
      Adjustments
                                    
                                    
                                    ConsolidatedRevenue:Net
      premiums earned
                                    
                                    $
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    301,851
                                    
                                    
                                    
                                    –
                                    
                                    
                                    $
                                    301,851Net
      investment income
                                    
                                    
                                    600
                                    
                                    
                                    
                                    225
                                    
                                    
                                    
                                    48,237
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    49,062Net
      realized gains on investments
                                    
                                    
                                    –
                                    
                                    
                                    
                                    3
                                    
                                    
                                    
                                    2,969
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    2,972Other
      income (expense)
                                    
                                    
                                    449
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    (545
                                    )
                                    
                                    
                                    –
                                    
                                    
                                    
                                    (96
                                    )Total
      revenue
                                    
                                    
                                    1,049
                                    
                                    
                                    
                                    228
                                    
                                    
                                    
                                    352,512
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    353,789Expenses:Net
      losses and loss adjustment expenses
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    160,203
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    160,203Net
      acquisition expenses
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    60,542
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    60,542Net
      changes in fair value of derivatives
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    810
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    810Operating
      expenses
                                    
                                    
                                    5,849
                                    
                                    
                                    
                                    100
                                    
                                    
                                    
                                    15,741
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    21,690Net
      foreign currency exchange gains
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    (4,869
                                    )
                                    
                                    
                                    –
                                    
                                    
                                    
                                    (4,869
                                    )Interest
      expense
                                    
                                    
                                    –
                                    
                                    
                                    
                                    4,750
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    4,750Total
      expenses
                                    
                                    
                                    5,849
                                    
                                    
                                    
                                    4,850
                                    
                                    
                                    
                                    232,427
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    243,126Income
      (loss) before income taxexpense
      (benefit)
                                    
                                    
                                    (4,800
                                    )
                                    
                                    
                                    (4,622
                                    )
                                    
                                    
                                    120,085
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    110,663Income
      tax expense (benefit)
                                    
                                    
                                    –
                                    
                                    
                                    
                                    (1,508
                                    )
                                    
                                    
                                    7,000
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    5,492Income
      (loss) before equity inearnings
      of subsidiaries
                                    
                                    
                                    (4,800
                                    )
                                    
                                    
                                    (3,114
                                    )
                                    
                                    
                                    113,085
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    105,171Equity
      in earnings of subsidiaries
                                    
                                    
                                    109,971
                                    
                                    
                                    
                                    13,465
                                    
                                    
                                    
                                    11,007
                                    
                                    
                                    
                                    (134,443
                                    )
                                    
                                    
                                    –Net
      income
                                    
                                    
                                    105,171
                                    
                                    
                                    
                                    10,351
                                    
                                    
                                    
                                    124,092
                                    
                                    
                                    
                                    (134,443
                                    )
                                    
                                    
                                    105,171Preferred
      dividends
                                    
                                    
                                    2,602
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –
                                    
                                    
                                    
                                    2,602Net
      income attributable to common shareholders
                                    
                                    $
                                    102,569
                                    
                                    
                                    
                                    10,351
                                    
                                    
                                    
                                    124,092
                                    
                                    
                                    
                                    (134,443
                                    )
                                    
                                    $
                                    102,569
   Condensed
      Consolidating Statement of Cash Flows
                                                    For
      the Three Months Ended March 31, 2009
                                                  
                                                  Platinum
                                                    Holdings
                                                  
                                                  
                                                  Platinum
      Finance
                                                  
                                                  
                                                  Non-guarantor
                                                    Subsidiaries
                                                  
                                                  
                                                  Consolidating
      Adjustments
                                                  
                                                  
                                                  ConsolidatedNet
      cash provided by (used in) operating activities
                                                  
                                                  $
                                                  (2,964
                                                  )
                                                  
                                                  
                                                  32
                                                  
                                                  
                                                  
                                                  272,526
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  $
                                                  269,594Investing Activities:Proceeds
      from sale of available-for-sale securities
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  128,941
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  128,941Proceeds
      from maturity or paydown of available-for-sale securities
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  619
                                                  
                                                  
                                                  
                                                  186,297
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  186,916Acquisition
      of available-for-sale securities
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (1,044,698
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (1,044,698
                                                  )Acquisition
      of trading securities
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (14,525
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (14,525
                                                  )Increase
      in short-term investments
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  38,585
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  38,585Dividends
      from subsidiaries
                                                  
                                                  
                                                  40,000
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (40,000
                                                  )
                                                  
                                                  
                                                  –Net
      cash provided by (used in) investing activities
                                                  
                                                  
                                                  40,000
                                                  
                                                  
                                                  
                                                  619
                                                  
                                                  
                                                  
                                                  (705,400
                                                  )
                                                  
                                                  
                                                  (40,000
                                                  )
                                                  
                                                  
                                                  (704,781
                                                  )Financing Activities:Dividends
      paid to preferred shareholders
                                                  
                                                  
                                                  (2,602
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (2,602
                                                  )Dividends
      paid to common shareholders
                                                  
                                                  
                                                  (4,262
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (40,000
                                                  )
                                                  
                                                  
                                                  40,000
                                                  
                                                  
                                                  
                                                  (4,262
                                                  )Purchase
      of common shares
                                                  
                                                  
                                                  (60,091
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (60,091
                                                  )Net
      cash used in financing activities
                                                  
                                                  
                                                  (66,955
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (40,000
                                                  )
                                                  
                                                  
                                                  40,000
                                                  
                                                  
                                                  
                                                  (66,955
                                                  )Effect
      of foreign currency exchange rate changes on cash
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (1,793
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (1,793
                                                  )Net
      increase (decrease) in cash and cash equivalents
                                                  
                                                  
                                                  (29,919
                                                  )
                                                  
                                                  
                                                  651
                                                  
                                                  
                                                  
                                                  (474,667
                                                  )
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  (503,935
                                                  )Cash
      and cash equivalents at beginning of period
                                                  
                                                  
                                                  66,325
                                                  
                                                  
                                                  
                                                  10,468
                                                  
                                                  
                                                  
                                                  736,224
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  813,017Cash
      and cash equivalents at end of period
                                                  
                                                  $
                                                  36,406
                                                  
                                                  
                                                  
                                                  11,119
                                                  
                                                  
                                                  
                                                  261,557
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  $
                                                  309,082
  - 15
-
 Condensed
      Consolidating Statement of Cash Flows
                                    For
      the Three Months Ended March 31, 2008
                                  
                                  Platinum
                                    Holdings
                                  
                                  
                                  Platinum
      Finance
                                  
                                  
                                  Non-guarantor
                                    Subsidiaries
                                  
                                  
                                  Consolidating
      Adjustments
                                  
                                  
                                  ConsolidatedNet
      cash provided by (used in)operating
      activities
                                  
                                  $
                                  (7,993
                                  )
                                  
                                  
                                  94
                                  
                                  
                                  
                                  110,594
                                  
                                  
                                  
                                  –
                                  
                                  
                                  $
                                  102,695Investing Activities:Proceeds
      from sale of available-for-sale securities
                                  
                                  
                                  –
                                  
                                  
                                  
                                  45
                                  
                                  
                                  
                                  6,132
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  6,177Proceeds
      from maturity or paydown of available-for-sale
    securities
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  442,368
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  442,368Acquisition
      of available-for-sale securities
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (299,553
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (299,553
                                  )Increase
      in short-term investments
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (121,064
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (121,064
                                  )Dividends
      from subsidiaries
                                  
                                  
                                  180,000
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (180,000
                                  )
                                  
                                  
                                  –Net
      cash provided by (used in)investing
      activities
                                  
                                  
                                  180,000
                                  
                                  
                                  
                                  45
                                  
                                  
                                  
                                  27,883
                                  
                                  
                                  
                                  (180,000
                                  )
                                  
                                  
                                  27,928Financing Activities:Dividends
      paid to preferred shareholders
                                  
                                  
                                  (2,602
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (2,602
                                  )Dividends
      paid to common shareholders
                                  
                                  
                                  (4,154
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (180,000
                                  )
                                  
                                  
                                  180,000
                                  
                                  
                                  
                                  (4,154
                                  )Purchase
      of common shares
                                  
                                  
                                  (167,941
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (167,941
                                  )Net
      cash used in financing activities
                                  
                                  
                                  (174,697
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (180,000
                                  )
                                  
                                  
                                  180,000
                                  
                                  
                                  
                                  (174,697
                                  )Effect
      of foreign currency exchange rate changes on cash
                                  
                                  
                                  –
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  2,139
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  2,139Net
      increase (decrease) in cash andcash
      equivalents
                                  
                                  
                                  (2,690
                                  )
                                  
                                  
                                  139
                                  
                                  
                                  
                                  (39,384
                                  )
                                  
                                  
                                  –
                                  
                                  
                                  
                                  (41,935
                                  )Cash
      and cash equivalents at beginning of period
                                  
                                  
                                  39,592
                                  
                                  
                                  
                                  18,349
                                  
                                  
                                  
                                  1,018,338
                                  
                                  
                                  
                                  –
                                  
                                  
                                  
                                  1,076,279Cash
      and cash equivalents at end of period
                                  
                                  $
                                  36,902
                                  
                                  
                                  
                                  18,488
                                  
                                  
                                  
                                  978,954
                                  
                                  
                                  
                                  –
                                  
                                  
                                  $
                                  1,034,344
  9.
              Company Share
      Repurchases
  Our board
of directors has authorized the repurchase of up to $250,000,000 of our common
shares through a share repurchase program.  Since the program was
established, our board has monitored the level of share repurchase activity and
periodically restored the repurchase authority under the program to
$250,000,000, most recently on April 30, 2009.  During the three
months ended March 31, 2009, the Company repurchased 2,251,804 its common
shares in the open market at an aggregate cost, including commissions, of
$60,091,000 and a weighted average cost, including commissions, of $26.69 per
share.  All of the common shares we repurchased were
canceled.
 
 - 16
-
  ITEM 2.
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
  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 our Annual Report on Form 10-K for the year ended December 31,
2008 and the “Note on Forward-Looking Statements” on pages 25-26 of
this Quarterly Report on Form 10-Q for the period ended March 31, 2009 (this
“Form 10-Q”).  Our consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”).
  Overview
  Platinum
Underwriters Holdings, Ltd. (“Platinum Holdings”) was organized in 2002 as a
Bermuda holding company and had $2.1 billion in capital as of March 31,
2009.  We operate through our two licensed reinsurance subsidiaries,
Platinum Underwriters Bermuda, Ltd. (“Platinum Bermuda”) and Platinum
Underwriters Reinsurance, Inc. (“Platinum US”).  We provide 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.
  Economic
Conditions
  Periods
of moderate economic growth or recession tend not to adversely affect our
operations.  Periods of moderate inflation or deflation also tend not
to adversely affect our operations.  However, periods of severe
inflation or deflation or prolonged periods of recession may adversely impact
our results of operations or financial condition.  Management
considers the potential impact of economic trends in the estimation process for
establishing unpaid losses and loss adjustment expenses (“LAE”) and in
determining our underwriting and investment strategies.
  Reinsurance Industry
Conditions and Trends
  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
significantly affected by shock events, including natural and other
catastrophes.  Property and casualty reinsurance rates often rise in
the aftermath of significant catastrophe losses.  To the extent that
actual claim liabilities are higher than anticipated, the industry's capacity to
write new business diminishes.  The reinsurance industry is also
affected by changes in the propensity of courts to expand insurance coverage and
grant large liability awards.  Fluctuations in interest rates and
other changes in the economic environment that affect the fair values of
investments may also impact the industry.
  In 2005,
an unprecedented level of hurricane losses caused many reinsurers to report
significant net losses after which rating agencies imposed higher capital
requirements.  Both reinsurers and their clients reassessed their
catastrophe pricing parameters and procedures.  The result was an
increase in catastrophe pricing, particularly for wind exposures in the United
States, in 2006 and the beginning of 2007.  A number of new companies
were formed to take advantage of the improved pricing.  The
combination of additional capacity and a lack of major catastrophe activity in
2006 and 2007 led to a decline in pricing for catastrophe exposed reinsurance in
the second half of 2007.  After initially stabilizing, the weakening
of non-catastrophe pricing resumed in late 2006 and continued throughout
2007.  The pricing of reinsurance continued to decline in the first
half of 2008.  However, during the second half of 2008, the financial
markets experienced significant adverse credit events and a loss of liquidity,
which reduced the amount of capital in the insurance industry.  In
addition, the 2008 hurricane season resulted in substantial losses to the
insurance and reinsurance industry.
  Current
Outlook
  We
believe that the current adverse conditions in the financial markets have made
debt and equity capital either unavailable or significantly more expensive to
access than in the recent past.  Since reinsurance can serve primary
insurers as a replacement of dedicated capital, we believe demand for
reinsurance will increase.  We also believe that some reinsurers have
been negatively impacted by the current adverse conditions in the financial
markets and 2008 hurricane losses to such an extent that they may be reluctant
to deploy their capacity without appropriate rate increases.  We
believe that these factors have begun to affect reinsurance market conditions
positively.  We believe that these conditions may lead to further rate
strengthening during 2009, particularly with respect to property and marine
business.
  For the
Property and Marine segment, catastrophe rate adequacy improved most in
catastrophe exposed areas of the U.S.  We seek to limit the estimated
probable maximum loss to a specific level for severe catastrophic
events.  We currently expect to limit the probable maximum pre-tax
loss for 2009 to no more than 22.5% of total capital for a severe catastrophic
event in any geographic zone that could be expected to occur once in every 250
years, although we may change this threshold at any time.  In
April 2009, the estimated probable maximum loss for a catastrophic event in
any geographic zone arising from a 1-in-250 year event was approximately $304
million, as compared with $469 million in April 2008.
  For the
Casualty segment, we believe the decline in rate adequacy of the past few years
has slowed and in some cases improved reinsurance terms have been
agreed.  We believe that the market offers adequate returns on certain
accounts.  We believe that financial security is a significant concern
for buyers of long-tailed reinsurance protection who typically seek reinsurers
with strong balance sheets, quality ratings, and a proven claims-paying
record.  We believe that our rating, capitalization and reputation as
a lead casualty reinsurer position us well to write profitable business as
opportunities arise.
  We found
relatively more attractive opportunities in our Property and Marine segment and
relatively fewer attractive opportunities in our Casualty
segment.  Therefore, Property and Marine business may represent a
larger proportion of our overall book of business in future periods, which could
increase the volatility of our results of operations.
  - 17
-
  In the
Finite Risk segment, we expect the relatively low level of demand will continue
for the foreseeable future.
  Critical Accounting
Estimates
  The
preparation of consolidated financial statements in accordance with U.S. GAAP
requires us to make many estimates and valuation assumptions that affect the
reported amounts of assets, liabilities (including unpaid losses and
LAE),  revenues and expenses, and related disclosures of contingent
liabilities.  Certain of these estimates and assumptions result from
judgments that are necessarily subjective.  Actual results may differ
materially from these estimates.  Our critical accounting estimates
include premiums written and earned, unpaid losses and LAE, estimates of
reinsurance recoverable, valuation of investments and evaluation of risk
transfer.  For a detailed discussion of the Company’s critical
accounting estimates please refer to Management’s Discussion and Analysis of
Financial Condition and Results of Operations included in our Annual Report on
Form 10-K for the year ended December 31, 2008.
  In April
2009, the Financial Accounting Standards Board (the “FASB”) issued FASB Staff
Position No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments” (“FSP 115-2”).  See discussion
of recently issued accounting pronouncements in Note 1 to the consolidated
financial statements in this Form 10-Q.
  Results of
Operations
  Net
income and diluted earnings per common share for the three months ended
March 31, 2009 and 2008 was as follows (amounts in thousands, except
earnings per share):
 
 2009
                    
                    
                    2008
                    
                    
                    DecreaseNet
      income
                    
                    $
                    84,922
                    
                    
                    
                    105,171
                    
                    
                    $
                    20,249Weighted
      average shares outstanding for diluted earnings per common
      share
                    
                    
                    53,702
                    
                    
                    
                    59,874
                    
                    
                    
                    6,172Diluted
      earnings per common share
                    
                    $
                    1.58
                    
                    
                    
                    1.76
                    
                    
                    $
                    0.18
  The
decrease in net income in 2009 as compared with 2008 was primarily due to a
decrease in net underwriting income of $16,101,000 and a decrease in foreign
currency exchange gains.  Net underwriting income consists of net
premiums earned, less net losses and LAE, net acquisition expenses and operating
costs related to underwriting operations.
  Diluted
earnings per common share decreased primarily due to the decrease in net
income.  Diluted earnings per common share was favorably impacted by
the decrease in weighted average shares outstanding.  The weighted
average shares outstanding decreased as a result of repurchasing 7,763,000
shares during the year ended December 31, 2008, while the impact of such share
repurchases on the weighted shares outstanding for the three months ended March
31, 2008 was 1,669,000 shares.
  Underwriting
Results
  Net
underwriting income for the three months ended March 31, 2009 and 2008 was
$49,304,000 and $65,405,000, respectively.  The decrease in net
underwriting income in 2009 as compared with 2008 was due to less net favorable
development in 2009 as well as a decrease in net premiums earned.  Net
premiums written decreased in 2009 as compared with 2008 primarily due to
decreases in premiums written across most classes in the Casualty segment and
decreases in the Property and Marine segment as we reduced our exposure to
catastrophe events.  Net favorable development is the development of
prior years’ unpaid losses and LAE and the related impact on premiums and
commissions.  Net favorable development was $22,089,000 and
$29,455,000 in 2009 and 2008, respectively.
  The net
favorable loss development related to prior years was almost entirely in the
Casualty segment.  Actual reported losses in certain casualty classes
were significantly less than expected and gained sufficient credibility in the
current period to reduce estimated ultimate losses.  We do not believe
that the net favorable loss development experienced in 2009 is indicative of
prospective net development of unpaid losses and LAE as of March 31, 2009
because the conditions and trends that affected the net favorable development of
prior years’ unpaid losses and LAE may not necessarily exist in the
future.
  We
conduct our worldwide reinsurance business through three operating segments:
Property and Marine, Casualty and Finite Risk.  In managing our
operating segments, we use measures such as underwriting income and underwriting
ratios to evaluate segment performance.  We do not allocate assets or
certain income and expenses such as investment income, interest expense and
certain corporate expenses to segments.  Segment underwriting
income is reconciled to the U.S. GAAP measure of income before income taxes in
Note 6 to the consolidated financial statements in this Form
10-Q.  The measures we used in evaluating our operating segments
should not be used as a substitute for measures determined under U.S.
GAAP.
  - 18
-
  Property and
Marine
  The
Property and Marine operating segment generated 57.7% and 57.0% of our net
premiums written for the three months ended March 31, 2009 and 2008,
respectively.  The following table summarizes underwriting activity
and ratios for the Property and Marine segment for the three months ended
March 31, 2009 and 2008 ($ in thousands):
 
 2009
                      
                      
                      2008
                      
                      
                      Increase
                        (decrease)Gross
      premiums written
                      
                      $
                      145,435
                      
                      
                      
                      172,900
                      
                      
                      $
                      (27,465
                      )Ceded
      premiums written
                      
                      
                      3,700
                      
                      
                      
                      4,083
                      
                      
                      
                      (
      383
                      )Net
      premiums written
                      
                      
                      141,735
                      
                      
                      
                      168,817
                      
                      
                      
                      (27,082
                      )Net
      premiums earned
                      
                      
                      133,671
                      
                      
                      
                      153,390
                      
                      
                      
                      (19,719
                      )Net
      losses and LAE
                      
                      
                      77,451
                      
                      
                      
                      62,039
                      
                      
                      
                      15,412Net
      acquisition expenses
                      
                      
                      17,364
                      
                      
                      
                      20,654
                      
                      
                      
                      (3,290
                      )Other
      underwriting expenses
                      
                      
                      8,159
                      
                      
                      
                      8,596
                      
                      
                      
                      (
      437
                      )Property
      and Marine segment underwriting income
                      
                      $
                      30,697
                      
                      
                      
                      62,101
                      
                      
                      $
                      (31,404
                      )Ratios:Net
      loss and LAE
                      
                      
                      57.9
                      %
                      
                      
                      40.4
                      %
                      
                      17.5
      pointsNet
      acquisition expense
                      
                      
                      13.0
                      %
                      
                      
                      13.5
                      %
                      
                      (0.5)
      pointsOther
      underwriting expense
                      
                      
                      6.1
                      %
                      
                      
                      5.6
                      %
                      
                      0.5
      pointsCombined
                      
                      
                      77.0
                      %
                      
                      
                      59.5
                      %
                      
                      17.5
      points
  The
decrease in underwriting income was primarily due to the difference in the net
development of prior years’ premiums and losses.  There was $85,000 of
net unfavorable development in 2009 as compared with net favorable development
of $20,969,000 in 2008.  The decline in underwriting income was also
attributable to the decline in net premiums earned.
  The
decrease in gross premiums written in 2009 as compared with 2008 was primarily
in the catastrophe excess, risk excess and ocean marine excess classes where we
reduced our exposure to catastrophe events.  Net premiums earned in
2009 decreased as a result of the decrease in net premiums written.
  The
increases in net losses and LAE and the related net loss and LAE ratios in 2009
as compared with 2008 were primarily due to the difference in net loss
development.  Net unfavorable loss development was $1,484,000 in 2009
as compared with net favorable loss development of $15,231,000 in
2008.  Net loss development and premium adjustments related to the net
loss development increased the net loss and LAE ratio by 0.6 points in 2009 and
decreased the net loss and LAE ratio by 12.0 points in 2008.  We also
had net losses from major catastrophes of $11,573,000 and $6,449,000 in 2009 and
2008, respectively.  The net losses from major catastrophes, with
related premium adjustments, increased the net loss and LAE ratio in 2009 and
2008 by 7.9 points and 4.2 points, respectively.  Exclusive of losses
related to major catastrophes and net favorable loss development, the net loss
and LAE ratio increased by approximately 1.3 points.  The net loss and
LAE ratios were also affected by changes in the mix of business.
  The
decrease in net acquisition expenses in 2009 as compared with 2008 was primarily
due to the decrease in net premiums earned.  The net acquisition
expense ratios in 2009 and 2008 are comparable. Other
underwriting expenses for the three months ended March 31, 2009 and 2008
were comparable at $8,159,000 and $8,596,000, respectively.
  - 19
-
  Casualty
  The
Casualty operating segment generated 40.0% and 42.4% of our net premiums written
for the three months ended March 31, 2009 and 2008, respectively.  The
following table summarizes underwriting activity and ratios for the Casualty
segment for the three months ended March 31, 2009 and 2008 ($ in
thousands):
 
 2009
                      
                      
                      2008
                      
                      
                      Increase
      (decrease)Net
      premiums written
                      
                      $
                      98,014
                      
                      
                      
                      125,576
                      
                      
                      $
                      (27,562
                      )Net
      premiums earned
                      
                      
                      109,960
                      
                      
                      
                      147,495
                      
                      
                      
                      (37,535
                      )Net
      losses and LAE
                      
                      
                      59,141
                      
                      
                      
                      99,393
                      
                      
                      
                      (40,252
                      )Net
      acquisition expenses
                      
                      
                      26,221
                      
                      
                      
                      37,488
                      
                      
                      
                      (11,267
                      )Other
      underwriting expenses
                      
                      
                      5,669
                      
                      
                      
                      6,795
                      
                      
                      
                      (1,126
                      )Casualty
      segment underwriting income
                      
                      $
                      18,929
                      
                      
                      
                      3,819
                      
                      
                      $
                      15,110Ratios:Net
      loss and LAE
                      
                      
                      53.8
                      %
                      
                      
                      67.4
                      %
                      
                      (13.6)
      pointsNet
      acquisition expense
                      
                      
                      23.8
                      %
                      
                      
                      25.4
                      %
                      
                      (1.6)
      pointsOther
      underwriting expense
                      
                      
                      5.2
                      %
                      
                      
                      4.6
                      %
                      
                      0.6
      pointsCombined
                      
                      
                      82.8
                      %
                      
                      
                      97.4
                      %
                      
                      (14.6)
      points
  The
increase in underwriting income was primarily due to the difference in the net
development of prior years’ premiums and losses.  Net favorable
development was $22,243,000 and $8,699,000 in 2009 and 2008,
respectively.
  The
decrease in net premiums written in 2009 as compared with 2008 was primarily due
to decreases in business underwritten in 2009 and 2008 across most North
American casualty classes, with the most significant decreases in the claims
made excess classes.  The decreases were the result of fewer
opportunities that met our underwriting standards.  The decrease in
net premiums earned was the result of the decrease in net premiums written in
2009 and 2008.  Net premiums written and earned were also affected by
changes in the mix of business and the structure of the underlying reinsurance
contracts.
  The
decreases in net losses and LAE and the related ratios in 2009 as compared with
2008 were due to a decrease in net premiums earned and an increase in net
favorable loss development.  Net favorable loss development was
$23,138,000 and $12,088,000 in 2009 and 2008, respectively.  Net
favorable loss development in 2009 included $22,376,000 from certain long-tailed
casualty classes.  Net favorable loss development and premium
adjustments related to prior years’ losses decreased the net loss and LAE ratios
in 2009 and 2008 by 20.6 and 8.2 points, respectively.  Exclusive of
net favorable loss development, the net loss and LAE ratio decreased by 1.2
points in 2009 as compared with 2008.  The net loss and LAE ratios
were also affected by changes in the mix of business.
  The
decrease in net acquisition expenses in 2009 as compared with 2008 was due to
the decrease in net premiums earned.  The decrease in the net
acquisition expense ratio in 2009 as compared with 2008 was due to differences
in commission and premium adjustments relating to prior years’
losses.  Net acquisition expenses in 2009 included an increase in
commissions relating to prior years’ losses of $289,000 which, with related
premiums adjustments, represented 0.3% of net premiums earned.  In
2008, commission increases relating to prior years’ losses were $3,418,000
which, with related premium adjustments, represented 2.3% of net premiums
earned.  Exclusive of commissions and premium adjustments related to
prior years’ losses, the net acquisition expense ratios in 2009 and 2008 were
comparable.  Net acquisition expense ratios were also impacted by
changes in the mix of business.
  - 20
-
  Finite
Risk
  The
Finite Risk segment generated 2.3% and 0.6% of our net premiums written for the
three months ended March 31, 2009 and 2008, respectively.  Due to the
often significant inverse relationship between losses and commissions for this
segment, we believe it is important to evaluate the overall combined ratio,
rather than its component parts of net loss and LAE ratio and net acquisition
expense ratio.  The following table summarizes underwriting activity
and ratios for the Finite Risk segment for the three months ended March 31,
2009 and 2008 ($ in thousands):
 
 2009
                        
                        
                        2008
                        
                        
                        Increase
      (decrease)Net
      premiums written
                        
                        $
                        5,523
                        
                        
                        
                        1,878
                        
                        
                        $
                        3,645Net
      premiums earned
                        
                        
                        4,121
                        
                        
                        
                        966
                        
                        
                        
                        3,155Net
      losses and LAE
                        
                        
                        7,572
                        
                        
                        
                        (1,229
                        )Net
      acquisition expenses
                        
                        
                        (3,429
                        )
                        
                        
                        2,400Net
      losses, LAE and acquisition expenses
                        
                        
                        4,143
                        
                        
                        
                        1,171
                        
                        
                        
                        2,972Other
      underwriting expenses
                        
                        
                        300
                        
                        
                        
                        310
                        
                        
                        
                        (10
                        )Finite
      Risk segment underwriting loss
                        
                        $
                        (322
                        )
                        
                        
                        (515
                        )
                        
                        $
                        193Ratios:Net
      loss and LAE
                        
                        
                        183.7
                        %
                        
                        
                        (127.2
                        %)Net
      acquisition expense
                        
                        
                        (83.2
                        %)
                        
                        
                        248.4
                        %Net
      loss, LAE and acquisition expense ratios
                        
                        
                        100.5
                        %
                        
                        
                        121.2
                        %
                        
                        (20.7)
      pointsOther
      underwriting expense
                        
                        
                        7.3
                        %
                        
                        
                        32.1
                        %
                        
                        (24.8)
      pointsCombined
                        
                        
                        107.8
                        %
                        
                        
                        153.3
                        %
                        
                        (45.5)
      points
  The
Finite Risk portfolio consists of a small number of contracts that can be large
in premium size and, consequently, premium volume may vary significantly from
year to year.  Due to the reduction in the premium volume in the
recent years, current year ratios may be significantly impacted by relatively
insignificant adjustments of prior years’ business.  The increases in
net premiums written and net premiums earned in 2009 as compared with 2008 were
attributable to an increase in participation on one contract.
  The
increase in net losses, LAE and acquisition expenses in 2009 as compared with
2008 was primarily due to the increase in net premiums earned.  The
decrease in the net loss, LAE and acquisition expense ratio was primarily due to
the decrease in net unfavorable loss development in 2009 as compared with
2008.  Net unfavorable loss development was $69,000 and $213,000 in
2009 and 2008, respectively.  Exclusive of commissions and premium
adjustments related to prior years’ losses, the net loss and acquisition expense
ratios in 2009 and 2008 were comparable.
  Non-Underwriting
Results
  Net
investment income for the three months ended March 31, 2009 and 2008 was
$34,246,000 and $49,062,000, respectively.  Net investment income
decreased in 2009 as compared with 2008 due primarily to decreases in yields on
invested assets and cash and cash equivalents.  Net investment income
in 2009 was reduced by $6,154,000 from our U.S. treasury inflation-protected
securities (“TIPS”) as a result of decreases in the consumer price index while
we held these securities.  We did not own any TIPS in the comparable
2008 period.
  - 21
-
  Net
realized investment gains were $20,570,000 and $2,972,000 in 2009 and 2008,
respectively, and were comprised as follows ($ in thousands):
 
 2009
                    
                    
                    2008
                    
                    
                    Favorable
      (Unfavorable) changeNet
      gains on the sale of investments
                    
                    $
                    21,769
                    
                    
                    
                    45
                    
                    
                    $
                    21,724Mark-to-market
      adjustments on trading securities
                    
                    
                    (1,199
                    )
                    
                    
                    2,927
                    
                    
                    
                    (4,126
                    )Net
      realized investment gains
                    
                    $
                    20,570
                    
                    
                    
                    2,972
                    
                    
                    $
                    17,598
  We sold
positions in TIPS and U.S. agency residential mortgage-backed securities that
resulted in net gains on the sale of investments of $21,309,000.
  Net
impairment losses on securities for the three months ended March 31, 2009 and
2008 were $3,408,000 and $0, respectively.  The net impairment losses
relating to credit that we recorded during 2009 included $955,000
of non-agency residential mortgage-backed securities, $635,000 of commercial
mortgage-backed securities, and $610,000 of Alt-A residential mortgage-backed
securities and sub-prime asset-backed securities.  We also recorded
other-than-temporary impairments of $1,208,000 on our holdings of perpetual
preferred stocks for the three months ended March 31, 2009.
  The net
changes in fair value of derivatives for the three months ended March 31,
2009 and 2008 were $2,417,000 and $810,000, respectively.  The
increase in net changes in fair value of derivatives is attributable to the
commencement in August 2008 of a derivative contract with Topiary Capital
Limited (“Topiary”) that provides us with catastrophe event
protection.  See “Financial Condition, Liquidity and Capital
Resources” for additional discussion of Topiary.  We also entered into
other less significant derivative contracts in 2008 prior to the Topiary
contract, which also provided catastrophe event protection.
  Operating
expenses for the three months ended March 31, 2009 and 2008 were comparable
at $20,868,000 and $21,690,000, respectively.  Operating expenses
include costs such as salaries, rent and like items.
  Net
foreign currency exchange losses for the three months ended March 31, 2009 were
$996,000 as compared to net foreign currency exchange gains of $4,869,000 for
the three months ended March 31, 2008.  We routinely transact
business in currencies other than the U.S. dollar.  The net foreign
currency exchange losses in 2009 were the result of foreign currency exchange
rate fluctuations during the quarter.  The net foreign currency
exchange gain in 2008 was the result of our holding more non-U.S. dollar
denominated assets than non-U.S. dollar denominated liabilities, primarily the
Euro, while the U.S. dollar declined in value against this
currency.
  Interest
expense for the three months ended March 31, 2009 and 2008 was comparable
at $4,755,000 and $4,750,000, respectively, and related to our $250,000,000 of
Series B 7.5% Notes due June 1, 2017.
  Income
taxes and the effective tax rate for the three months ended March 31, 2009
and 2008 were as follows ($ in thousands):
 
 2009
                  
                  
                  2008
                  
                  
                  DecreaseIncome
      taxes
                  
                  $
                  1,114
                  
                  
                  
                  5,492
                  
                  
                  $
                  4,378Effective
      tax rates
                  
                  
                  1.3
                  %
                  
                  
                  5.0
                  %
                  
                  3.7
      points
  The
decrease in income tax expense in 2009 as compared with 2008 was due to the
decrease in taxable income generated by our subsidiaries that operate in taxable
jurisdictions.  The decrease in the effective tax rate was the result
of a greater portion of income before income tax expense being generated by
Platinum Holdings and Platinum Bermuda, which are not subject to corporate
income tax, in 2009 as compared with 2008.  The percentage of income
before income tax expense derived from Platinum Holdings and Platinum Bermuda
was 97% in 2009 as compared with 84% in 2008.  The decrease in the
effective tax rate was also partially attributable to an increase in non-taxable
investment income in Platinum US.  The effective tax rate in any given
period is based on income before income tax expense of our subsidiaries that
operate in various taxable jurisdictions, each of which has its own corporate
income tax rate.
  Financial Condition,
Liquidity and Capital Resources
  On a
consolidated basis, our aggregate cash and invested assets totaled
$4,314,641,000 at March 31, 2009 as compared with $4,259,939,000 at December 31,
2008.  Our fixed maturity securities are primarily composed of
diversified, high quality, predominantly publicly-traded
securities.  The investment portfolio, excluding cash and cash
equivalents and short term investments, had a duration of 3.3 years as of March
31, 2009.
  As part
of our investment strategy, we seek to establish a level of cash and liquid
fixed maturity securities which, combined with expected cash flow from our
subsidiaries, we believe to be adequate to meet our foreseeable payment
obligations.  Our reinsurance subsidiaries have liquidity from
premiums, which are generally received in advance of the time losses are
paid.  The period of time from the occurrence of a claim through the
settlement of the liability may extend many years into the
future.  However, due to the nature of our reinsurance operations,
cash flows are affected by claim payments that can fluctuate from year to
year.  The timing and amounts of actual claim payments can vary based
on many factors, including the size of individual losses, changes in the legal
environment, and general market conditions.  The ultimate amount and
timing of the claim payments could differ materially from our estimates and
create significant variations in cash flows from operations between periods,
which may cause us to make payments from other sources of liquidity, such as
sales of investments, borrowings from credit facilities or proceeds from capital
market transactions.  If the source of liquidity arises from the sale
of investments, we may be forced to sell such investments at a loss, which may
be material.
  - 22
-
  The
primary objective of our investment strategy is to generate investment income by
maintaining a portfolio that consists primarily of diversified, high quality,
predominantly publicly traded fixed maturity securities.  We maintain
investment guidelines that contain limits on the portion of the portfolio that
may be invested in the securities of any single issue or issuer, with the
exception of U.S. government securities, and provide that financial futures and
options and foreign exchange contracts may not be used in a speculative manner
but may be used only as part of a defensive hedging strategy.  We do
not invest in instruments such as credit default swaps or collateralized debt
obligations.  As of March 31, 2009, we did not hold any common
equities in our investment portfolio.  Our investment guidelines allow
for investments in common equities up to a maximum of 10% of the investment
portfolio.
  As of
March 31, 2009, the fair value of our available-for-sale securities was
$3,843,429,000 with a net unrealized loss of $221,017,000.  The
following table sets forth the fair values, net unrealized gains and losses and
average credit quality of our fixed maturity securities as of March 31, 2009
($ in thousands):
 
 Fair
      Value
                                  
                                  
                                  Net
      Unrealized Gain (Loss)
                                  
                                  
                                  Average
      Credit QualityAvailable-for-sale
    securities:U.S.
      Government
                                  
                                  $
                                  4,565
                                  
                                  
                                  $
                                  469
                                  
                                  
                                  AaaU.S.
      Government agencies
                                  
                                  
                                  730,659
                                  
                                  
                                  
                                  20,743
                                  
                                  
                                  AaaCorporate:Industrial
                                  
                                  
                                  479,788
                                  
                                  
                                  
                                  (406
                                  )
                                  
                                  
                                  A2Finance
                                  
                                  
                                  159,547
                                  
                                  
                                  
                                  (20,971
                                  )
                                  
                                  
                                  A1Utilities
                                  
                                  
                                  50,005
                                  
                                  
                                  
                                  (271
                                  )
                                  
                                  
                                  A2Insurance
                                  
                                  
                                  42,451
                                  
                                  
                                  
                                  (5,112
                                  )
                                  
                                  
                                  A1Preferreds
      with maturity date
                                  
                                  
                                  19,798
                                  
                                  
                                  
                                  (13,047
                                  )
                                  
                                  
                                  A1Hybrid
      trust preferreds
                                  
                                  
                                  7,721
                                  
                                  
                                  
                                  (9,773
                                  )
                                  
                                  
                                  A1Mortgage-backed
      and asset-backed securities:Commercial
      mortgage-backed securities
                                  
                                  
                                  362,612
                                  
                                  
                                  
                                  (114,183
                                  )
                                  
                                  AaaU.S.
      Government agency residential mortgage-backed securities
                                  
                                  
                                  934,115
                                  
                                  
                                  
                                  20,362
                                  
                                  
                                  AaaNon-agency
      residential mortgage-backed securities
                                  
                                  
                                  88,951
                                  
                                  
                                  
                                  (65,363
                                  )
                                  
                                  Aa1Alt-A
      residential mortgage-backed securities
                                  
                                  
                                  8,197
                                  
                                  
                                  
                                  (11,100
                                  )
                                  
                                  
                                  B1Sub-prime
      asset-backed securities
                                  
                                  
                                  11,207
                                  
                                  
                                  
                                  (29,265
                                  )
                                  
                                  Baa3Asset-backed
      securities
                                  
                                  
                                  111,373
                                  
                                  
                                  
                                  (2,837
                                  )
                                  
                                  AaaMunicipal
      bonds
                                  
                                  
                                  550,957
                                  
                                  
                                  
                                  8,857
                                  
                                  
                                  Aa2Non-U.S.
      governments
                                  
                                  
                                  279,604
                                  
                                  
                                  
                                  880
                                  
                                  
                                  Aa1Total
      fixed maturity available-for-sale securities
                                  
                                  
                                  3,841,550
                                  
                                  
                                  
                                  (221,017
                                  )
                                  
                                  Aa1Preferred
      stocks
                                  
                                  
                                  1,879
                                  
                                  
                                  
                                  −
                                  
                                  
                                  Baa2Total
      available-for-sale securities
                                  
                                  
                                  3,843,429
                                  
                                  
                                  
                                  (221,017
                                  )
                                  
                                  Aa1Trading securities:Insurance-linked
      securities
                                  
                                  
                                  14,530
                                  
                                  
                                  
                                  n/a
                                  
                                  
                                  Ba2Non-U.S.
      dollar denominated corporate bonds
                                  
                                  
                                  3,244
                                  
                                  
                                  
                                  n/a
                                  
                                  
                                  Aa2Non-U.S.
      dollar denominated, non-U.S. governments
                                  
                                  
                                  107,628
                                  
                                  
                                  
                                  n/a
                                  
                                  
                                  Aa1Total
      trading securities
                                  
                                  
                                  125,402
                                  
                                  
                                  
                                  n/a
                                  
                                  
                                  Aa2Total
                                  
                                  $
                                  3,968,831
                                  
                                  
                                  $
                                  (221,017
                                  )
                                  
                                  Aa1
  During
the period, net unrealized losses on our available-for-sale investment portfolio
increased by approximately $17,008,000.  This increase is primarily
attributed to the cumulative effect of applying FASB Staff Position No.
FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments” (“FSP 115-2”), resulting in an increase
in net unrealized loss of $15,103,000.
  The net
unrealized loss position of our portfolio of residential mortgage-backed
securities and residential sub-prime asset-backed securities (“RMBS”) was
$85,366,000 as of March 31, 2009.  Approximately 90% of the RMBS
in our investment portfolio were issued or guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association, or the Federal
Home Loan Mortgage Corporation and are referred to as U.S. Government agency
residential mortgage-backed securities.  The remaining 10% of our RMBS
were issued by non-agency institutions and include securities with underlying
sub-prime and Alt-A mortgages.  The net unrealized loss position of
these RMBS was $105,728,000 as of March 31, 2009, which we believe was primarily
attributable to a widening of interest rate spreads since the securities were
acquired and to the loss of liquidity in the financial markets.  We
analyze our RMBS on a periodic basis using default loss models based on the
performance of the underlying loans.  Performance metrics include, but
are not limited to, delinquencies, defaults, foreclosures, prepayment speeds and
cumulative losses incurred.  The expected losses for a mortgage pool
are compared to the break-even loss, which represents the point at which our
tranche begins to experience losses.  We evaluate projected cash flows
as well as other factors in order to determine if our security is
other-than-temporarily impaired.  For the three months ended March 31,
2009, we recorded $1,425,000 of net impairment losses related to non-agency RMBS
and $140,000 related to sub-prime asset-backed securities.
  - 23
-
  The net
unrealized loss position of our portfolio of commercial mortgage-backed
securities (“CMBS”) was $114,182,000 as of March 31, 2009.  We
believe that this net unrealized loss is primarily attributable to a widening of
interest rate spreads since the securities were acquired and to the loss of
liquidity in the financial markets.  Our CMBS are evaluated on a
periodic basis using analytical techniques and various metrics including the
level of subordination, debt-service-coverage ratios, loan-to-value ratios,
delinquencies, defaults and foreclosures.  Our portfolio consists
primarily of senior tranches of CMBS with high credit ratings, strong
subordination and low loan-to-value ratios.  For the three months
ended March 31, 2009, we recorded $635,000 of net impairment losses related
to CMBS.
  Overall,
we believe that the gross unrealized loss in our available-for-sale portfolio
represents temporary declines due primarily to the loss of liquidity in the
financial markets and that the gross unrealized losses on our available-for-sale
securities are not necessarily predictive of ultimate performance.  We
also believe that the provisions we have made for other-than-temporary
impairments are adequate and that we have the ability and intent to hold our
securities for a sufficient period of time to recover their value, which may be
until maturity, if necessary.  Economic conditions may deteriorate
more than expected and adversely affect the expected cash flows of our
securities, which in turn may lead to other-than-temporary impairments recorded
in future periods.
  We expect
that our operational liquidity needs, including our anticipated reinsurance
obligations and operating and capital expenditures, for the next twelve months
will be met by our cash and cash equivalents, short-term investments, positive
cash flow from operations, investment income and proceeds on the sale or
maturity of our investments.
  Derivative
Instruments
  In August
2008, we entered into a derivative agreement with Topiary that provides us with
the ability to recover up to $200,000,000 should two catastrophic events
involving U.S. wind, U.S. earthquake, European wind or Japanese earthquake occur
that meet specified loss criteria during any of three annual periods commencing
August 1, 2008.  Any recovery we make under this contract is
based on an index using insured property industry loss estimates that are
compiled by Property Claim Services, a division of Insurance Services Offices,
Inc., for certain U.S. perils, and parametric triggers for certain non-U.S.
perils, and is not based on actual losses we may incur.  Under the
terms of this derivative agreement, we will pay to Topiary approximately
$9,650,000 during each of the three annual periods.
  Capital
Resources
  At March
31, 2009, our capital resources of $2.1 billion consisted of $250,000,000 of
Series B Notes and common shareholders’ equity of $1.8 billion.  On
February 17, 2009, our 5,750,000 outstanding 6% Series A Mandatory Convertible
Preferred Shares automatically converted into 5,750,000 common shares at a ratio
of one to one which was based on the volume weighted average price of $29.90 of
our common shares from January 14, 2009 through February 11,
2009.  At December 31, 2008, our capital of $2.1 billion
consisted of $250,000,000 of Series B Notes, $167,509,000 of preferred share
equity, and common shareholders’ equity of $1.6 billion.  The increase
in capital during 2009 was primarily attributable to net income in the quarter
partially offset by share repurchase activity.
  We
monitor our capital adequacy on a regular basis and seek to adjust our capital
according to the needs of our business.  In particular, we require
capital sufficient to meet or exceed (1) the surplus requirements established by
our ceding companies, (2) the capital adequacy ratios established by rating
agencies for maintenance of appropriate financial strength ratings, and (3) the
capital adequacy tests performed by regulatory bodies.  We actively
manage our capital and may seek to raise additional capital or return capital to
our shareholders through common share repurchases and cash dividends (or a
combination of such methods).  We may also manage our capital through
repurchases of our outstanding debt.
  To the
extent that our existing capital is insufficient to fund our future operating
requirements or maintain our financial strength or debt ratings, we may need to
raise additional capital through financings which can be in the form of debt
securities, preference shares, common equity, bank credit facilities providing
loans and/or letters of credit, or any combination of these
sources.  Any equity or debt financing, if available at all, may be on
terms that are unfavorable to us.  In the case of equity financings,
dilution to our shareholders could result, and, in any case, such securities may
have rights, preferences and privileges that are senior to those of our
outstanding securities.  If we are not able to obtain adequate
capital, our business, results of operations and financial condition could be
adversely affected, which could include, among other things, the following
possible outcomes:  (1) potential downgrades in the financial strength
ratings assigned by ratings agencies to our operating subsidiaries, which could
place those operating subsidiaries at a competitive disadvantage compared to
higher-rated competitors; (2) reductions in the amount of business that our
operating subsidiaries are able to write in order to meet capital adequacy-based
tests enforced by statutory agencies; and (3) increases in the cost of bank
credit and letters of credit.  We can provide no assurance that, if
needed, we would be able to obtain additional funds through financing on
satisfactory terms or at all.
  Our board
of directors has authorized the repurchase of up to $250,000,000 of our common
shares through a share repurchase program.  Since the program was
established, our board of directors has monitored the level of share repurchase
activity and periodically restored the repurchase authority under the program to
$250,000,000, most recently on April 30, 2009.  During the three
months ended March 31, 2009, Platinum Holdings repurchased 2,251,804 of its
common shares in the open market at an aggregate cost, including commissions, of
$60,091,000 and a weighted average cost, including commissions, of $26.69 per
share.  The timing and amount of the repurchase transactions under
this program will depend on a variety of factors, including market conditions
and corporate and regulatory considerations.
  - 24
-
  Sources
of Liquidity
  Our
consolidated sources of funds consist primarily of net cash flows provided by
operations, proceeds from sales, redemption and maturity of investments,
issuance of securities and actual cash and cash equivalents held by
us.  Net cash flows provided by operations, excluding trading security
activities, for the three months ended March 31, 2009 were
$65,204,000.
  In
addition, we have a $400,000,000 credit facility with a syndicate of lenders
which consists of a $150,000,000 senior unsecured credit facility available for
revolving borrowings and letters of credit and a $250,000,000 senior secured
credit facility available for letters of credit.  The credit facility
generally is available for our working capital, liquidity and general corporate
requirements and those of our subsidiaries.  Platinum Holdings and
Platinum Underwriters Finance, Inc. (“Platinum Finance”) guarantee borrowings by
our reinsurance subsidiaries under the credit facility.  The interest
rate on borrowings under the credit facility is based on our election of
either:  (1) LIBOR plus 50 basis points or (2) the higher
of:  (a) the prime interest rate of the lead bank providing the credit
facility, or (b) the federal funds rate plus 50 basis points.  The
interest rate based on LIBOR would increase or decrease by up to 12.5 basis
points should our senior unsecured debt rating decrease or increase,
respectively.  As of March 31, 2009, $150,000,000 was available
for borrowing and letters of credit on an unsecured basis and $68,660,000 was
available for letters of credit on a secured basis under the credit
facility.
  Liquidity
Requirements
  Our
principal consolidated cash requirements are the payment of losses and LAE,
commissions, brokerage, operating expenses, dividends to our common
shareholders, the servicing of debt, capital expenditures, purchase of
retrocessional contracts and payment of taxes.
  Platinum
Finance has outstanding $250,000,000 aggregate principal amount of Series B
Notes due June 1, 2017, unconditionally guaranteed by Platinum
Holdings.  Platinum Finance pays interest at a rate of 7.5% per annum
on the Series B Notes on each June 1 and December 1.
  Platinum
Bermuda is not licensed, approved or accredited as a reinsurer anywhere in the
United States and, therefore, under the terms of most of its contracts with U.S.
ceding companies, it is required to provide collateral to its ceding companies
for unpaid ceded liabilities in a form acceptable to state insurance
commissioners.  Typically, this type of collateral takes the form of
letters of credit issued by a bank, the establishment of a trust, or funds
withheld.  Platinum Bermuda provides letters of credit through our
credit facility and may be required to provide the banks with a security
interest in certain investments of Platinum Bermuda.
  Capital
Expenditures
  We do not
have any material commitments for capital expenditures as of March 31,
2009.
  Off-Balance Sheet
Arrangements
  We do not
have any off-balance sheet arrangements, as defined for purposes of the United
States’ Securities and Exchange Commission (“SEC”) rules, which are not
accounted for or disclosed in our consolidated financial statements as of
March 31, 2009.
  Contractual
Obligations
  There
have been no material changes to our contractual obligations as disclosed under
Management’s Discussion and Analysis of Financial Condition – Contractual
Obligations in our Annual Report on Form 10-K for the year ended
December 31, 2008.
  Recently Issued Accounting
Standards
  See Note
1 to the consolidated financial statements in this Form 10-Q for a
discussion of recently issued accounting standards.
  NoteOn
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 (the “Exchange Act”).  Forward-looking statements are based on
our current plans or expectations that are inherently subject to significant
business, economic and competitive uncertainties and
contingencies.  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.
  - 25
-
  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 current plans
or expectations will be achieved.  Numerous factors could cause our
actual results to differ materially from those in forward-looking statements,
including the following:
  •
              severe
      catastrophic events over which we have no
  control;
  •
              the
      effectiveness of our loss limitation methods and pricing
      models;
  •
              the
      adequacy of our liability for unpaid losses and loss adjustment
      expenses;
  •
              our
      ability to maintain our A.M. Best Company, Inc. (“A.M. Best”)
      rating;
  •
              the
      cyclicality of the property and casualty reinsurance
    business;
  •
              the
      competitive environment in which we conduct
  operations;
  •
              our
      ability to maintain our business relationships with reinsurance
      brokers;
  •
              the
      availability of retrocessional reinsurance on acceptable
      terms;
  •
              market
      volatility and interest rate and currency exchange rate
      fluctuation;
  •
              tax,
      regulatory or legal restrictions or limitations applicable to us or the
      property and casualty reinsurance business
  generally;
  •
              general
      political and economic conditions, including the effects of civil unrest,
      acts of terrorism, war or a prolonged United States or global economic
      downturn or recession; and
  •
              changes
      in our plans, strategies, objectives, expectations or intentions, which
      may happen at any time at our
discretion.
  As a
consequence, our future financial condition and results may differ from those
expressed in any forward-looking statements made by or on behalf of
us.  The foregoing factors, which are discussed in more detail in Part
II, Item 1A, “Risk Factors” in this Form 10-Q and in Part I, Item 1A, “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008,
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 revise or update forward-looking statements to reflect new
information or circumstances after the date hereof or to reflect the occurrence
of future events.
  ITEM 3.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
  Interest Rate, Credit and
Liquidity Risks
  Our
principal invested assets are fixed maturity securities which are carried at
fair value.  The principal risks that influence the fair value of our
investment portfolio are interest rate risk, credit risk and liquidity
risk.
  Changes
in overall interest rates, generally measured by changes in the yield on risk
free investments such as U.S. Treasury securities, will influence the fair
values of our fixed maturity securities portfolio.  Rising interest
rates generally result in a decrease in the fair value of our fixed maturity
securities portfolio; conversely, a decline in interest rates will generally
result in an increase in the fair value of our fixed maturity securities
portfolio.  Interest rate changes can also impact the timing of
receipt of principal payments from mortgage-backed securities.
  Credit
risk is often measured by interest rate spreads representing the difference
between the yield of a debt instrument and that of a U.S. Treasury security of
similar maturity.  As the credit worthiness of a debt issuer declines,
the interest rate spreads increase, which has the same effect on fair value as
an increase in overall interest rates.  An increase or widening of
interest rate spreads generally results in a decrease in the fair value of our
fixed maturity securities portfolio.
  The fair
values of our investment portfolio are also influenced by liquidity in the
financial markets.  When financial markets experience a reduction in
liquidity, the ability to conduct orderly transactions is limited and may result
in declines in fair values.
  - 26
-
  The
following table shows an aggregate hypothetical impact on the fair value of our
fixed maturity securities portfolio as of March 31, 2009, resulting from an
immediate parallel shift in the treasury yield curve ($ in
thousands):
 
 Interest
      Rate Shift in Basis Points-
      100 bp
                      
                      
                      
                      -
      50 bp
                      
                      
                      Current
                      
                      
                      
                      +
      50 bp
                      
                      
                      
                      +
      100 bpTotal
      market value
                      
                      $
                      4,094,136
                      
                      
                      
                      4,034,095
                      
                      
                      
                      3,968,831
                      
                      
                      
                      3,899,341
                      
                      
                      $
                      3,824,993Percent
      change in market value
                      
                      
                      3.2
                      %
                      
                      
                      1.6
                      %
                      
                      
                      –
                      
                      
                      
                      (1.8
                      %)
                      
                      
                      (3.6
                      %)Resulting
      unrealized appreciation (depreciation)
                      
                      $
                      (88,482
                      )
                      
                      
                      (148,523
                      )
                      
                      
                      (213,787
                      )
                      
                      
                      (283,277
                      )
                      
                      $
                      (357,625
                      )
  The net
unrealized loss on our available-for-sale fixed maturity securities portfolio
was $221,017,000 as of March 31, 2009.  Selling a security that
is in an unrealized loss position may call into question our intent to hold
other securities that are also in an unrealized loss position.  If we
were to sell a portion of our securities in an unrealized loss position, we
could be required to recognize the unrealized loss of the entire
available-for-sale investment portfolio as a realized loss.
  We have
other receivable amounts subject to credit risk.  The most significant
of these are reinsurance premiums receivable from ceding
companies.  We also have reinsurance recoverable amounts from our
retrocessionaires.  To mitigate credit risk related to reinsurance
premiums receivable, we have established standards for ceding companies and, in
most cases, have a contractual right of offset, thereby allowing us to settle
claims net of any such reinsurance premiums receivable.  To mitigate
credit risk related to our reinsurance recoverable amounts, we consider the
financial strength of our retrocessionaires when determining whether to purchase
coverage from them.  Retrocessional coverage is obtained from
companies with a financial strength rating of “A-” or better by A.M. Best or
from retrocessionaires whose obligations are fully collateralized for exposures
where losses become known and are paid in a relatively short period of
time.  The financial performance and rating status of all material
retrocessionnaires are routinely monitored.
  In
accordance with industry practice, we frequently pay amounts in respect of
claims under contracts to reinsurance brokers for payment over to the ceding
companies.  In the event that a broker fails to make such a payment,
depending on the jurisdiction, we may remain liable to the ceding company for
the payment.  Conversely, in certain jurisdictions, when ceding
companies remit premiums to reinsurance brokers, such premiums are deemed to
have been paid to us and the ceding company is no longer liable to us for those
amounts whether or not the funds are actually received by
us.  Consequently, we assume a degree of credit risk associated with
our brokers during the premium and loss settlement process.  To
mitigate credit risk related to reinsurance brokers, we have established
guidelines for brokers and intermediaries.
  Foreign Currency Exchange
Rate Risk
  We
operate on a worldwide basis and routinely transact business in various
currencies other than the U.S. dollar.  Consequently, our principal
exposure to foreign currency exchange rate risk is the transaction of business
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.  We manage our exposure to
large foreign currency risks by holding invested assets denominated in non-U.S.
dollar currencies in amounts that generally offset liabilities denominated in
the same foreign currencies.  We may from time to time hold more
non-U.S. dollar denominated assets than non-U.S. dollar
liabilities.
  Sources of Fair
Value
  The
following table presents the carrying amounts and estimated fair values of our
financial instruments as of March 31, 2009 ($ in
thousands):
 
 Carrying
                        Amount
                      
                      
                      Fair
      ValueFinancial assets:Fixed
      maturity securities
                      
                      $
                      3,966,952
                      
                      
                      $
                      3,966,952Preferred
      stocks
                      
                      
                      1,879
                      
                      
                      
                      1,879Short-term
      investments
                      
                      
                      36,728
                      
                      
                      
                      36,728Financial liabilities:Debt
      obligations
                      
                      $
                      250,000
                      
                      
                      $
                      170,000Derivative
      instruments
                      
                      
                      4,689
                      
                      
                      
                      4,689
  - 27
-
  The fair
value of our fixed maturity securities, preferred stocks, short-term investments
and debt obligations are based on prices obtained from independent sources for
those or similar investments using quoted prices in active markets and standard
market valuation pricing models.  We valued approximately 51% of our
securities using prices obtained from index providers, 42% using prices obtained
from pricing vendors, and 7% using prices obtained from broker-dealers. 
The inputs used in index pricing may include, but are not limited to, benchmark
yields, transactional data, broker-dealer quotes, security cash flows and
structures, credit ratings, prepayment speeds, loss severities, credit risks and
default rates.  Standard inputs used by pricing vendors may include, but
are not limited to, benchmark yields, reported trades, broker-dealer quotes,
issuer spreads, bids, offers and industry and economic events. 
Broker-dealers value securities through trading desks primarily based on
observable inputs.  Our derivative instruments, which are included in
other liabilities in the consolidated balance sheet, are priced at fair value,
primarily using unobservable inputs through the application of our own
assumptions and internal valuation pricing models.
  ITEM 4.
              CONTROLS
      AND PROCEDURES
  Disclosure Controls and
Procedures
  Our
management, including the Chief Executive Officer and Chief Financial Officer,
carried out an evaluation of the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act as of the end of the period covered by this
report.  Based on that evaluation, our management, including the Chief
Executive Officer and Chief Financial Officer, concluded that our disclosure
controls and procedures are effective to provide reasonable assurance that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and timely reported as
specified in the SEC’s rules and forms.
  Changes in Internal Control
over Financial Reporting
  No
changes occurred during the three months ended March 31, 2009 in our
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
  PART
II – OTHER INFORMATION
  ITEM 1A.
              RISK
      FACTORS
  The
following are material changes to the risk factors previously disclosed in Item
1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December
31, 2008.
  Risks Related to Laws and
Regulations
  There
are limitations on the ownership, transfer and voting rights of our common
shares.
  Under our
Bye-laws, our directors are required to decline to issue, or register any
transfer of shares that would result in a person owning, directly or
beneficially, and in some cases indirectly through non-U.S. entities or
constructively, 10% or more of the voting shares, or in the case of our two
former principal shareholders owning, directly or beneficially, and in some
cases indirectly through non-U.S. entities or constructively, 25% or more of
such shares or of the total combined value of our issued shares.  The
directors also may, in their discretion, repurchase shares and decline to
register the transfer of any shares if they have reason to believe that the
transfer may lead to adverse tax or regulatory consequences among other
reasons.  We are authorized to request information from any holder or
prospective acquirer of common shares as necessary to give effect to the
issuance, transfer and repurchase restrictions referred to above, and may
decline to effect any transaction if complete and accurate information is not
received as requested.
  In
addition, our Bye-laws generally provide that any person owning, directly or
beneficially, and in some cases indirectly through non-U.S. entities or
constructively, common shares carrying 10% or more of the total voting rights
attached to all of our outstanding common shares, will have the voting rights
attached to such shares reduced so that it may not exercise 10% or more of such
total voting rights of the common shares.  Because of the attribution
provisions of the U.S. Internal Revenue Code of 1986, as amended, and the rules
of the SEC regarding determination of beneficial ownership, this requirement may
have the effect of reducing the voting rights of a shareholder whether or not
such shareholder directly holds 10% or more of our common shares while other
shareholders may have their voting rights increased.  Further, the
directors have the authority to require from any shareholder certain information
for the purpose of determining whether that shareholder's voting rights are to
be reduced.  Failure to respond to such a notice, or submitting
incomplete or inaccurate information, gives the directors discretion to
disregard all votes attached to that shareholder's common shares.
  - 28
-
  The
insurance law of Maryland prevents any person from acquiring control of us or of
Platinum US unless that person has filed a notification with specified
information with the Maryland Insurance Commissioner and has obtained the
Commissioner’s prior approval.  Under the Maryland statute, acquiring
10% or more of the voting stock of an insurance company or its parent company is
presumptively considered a change of control, although such presumption may be
rebutted.  Accordingly, any person who acquires, directly or
indirectly, 10% or more of the voting securities of Platinum Holdings without
the prior approval of the Maryland Insurance Commissioner will be in violation
of this law and may be subject to injunctive action requiring the disposition or
seizure of those securities by the Maryland Insurance Commissioner or
prohibiting the voting of those securities and to other actions determined by
the Maryland Insurance Commissioner.  In addition, many U.S. state
insurance laws require prior notification of state insurance departments of a
change in control of a non-domiciliary insurance company doing business in that
state.  While these pre-notification statutes do not authorize the
state insurance departments to disapprove the change in control, they authorize
regulatory action in the affected state if particular conditions exist such as
undue market concentration.  Any future transactions that would
constitute a change in control of Platinum Holdings may require prior
notification in those states that have adopted pre-acquisition notification
laws.
  Common
shares may be offered or sold in Bermuda only in compliance with the provisions
of the Investment Business Act 2003 of Bermuda.  In addition, sales of
common shares to persons resident in Bermuda for Bermuda exchange control
purposes may require the prior approval of the Bermuda Monetary Authority (the
“Authority”).  Consent under the Exchange Control Act 1972 (and its
related regulations) has been obtained from the Authority for the issue and
transfer of the common shares between non-residents of Bermuda for exchange
control purposes, provided our shares remain listed on an appointed stock
exchange, which includes the NYSE.  In giving such consent, neither
the Authority nor the Registrar of Companies accepts any responsibility for the
financial soundness of any proposal or for the correctness of any of the
statements made or opinions expressed herein or therein.
  The
foregoing provisions of our Bye-laws and legal restrictions will have the effect
of rendering more difficult or discouraging unsolicited takeover bids from third
parties or the removal of incumbent management.
 
 ITEM
      2.
              UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
   (c)           Following
is a summary of purchases by us of our common shares during the three month
period ended March 31, 2009:
 
 Period
                            
                            (a)
                              Total
      Number of Shares Purchased
                            
                            
                            (b)
                              Average
      Price paid per Share
                            
                            
                            (c)
                              Total
      Number of Shares Purchased as Part of Publicly Announced Plans or
      Programs*
                            
                            
                            (d)
                              Maximum
      Dollar Value of Shares that May Yet Be Purchased Under the Plan or
      Programs–January
      1, 2009 – January 31, 2009
                            
                            
                            –
                            
                            
                            $
                            –
                            
                            
                            
                            –
                            
                            
                            $
                            243,837,782February
      1, 2009 – February 28, 2009
                            
                            
                            210,000
                            
                            
                            
                            28.36
                            
                            
                            
                            210,000
                            
                            
                            
                            237,881,754March
      1, 2009 – March 31, 2009
                            
                            
                            2,041,804
                            
                            
                            
                            26.51
                            
                            
                            
                            2,041,804
                            
                            
                            
                            183,747,182Total
                            
                            
                            2,251,804
                            
                            
                            $
                            26.69
                            
                            
                            
                            2,251,804
                            
                            
                            $
                            183,747,182
  * On
August 4, 2004, our board of directors established a program authorizing the
repurchase of our common shares.  Since that date, our board of
directors has approved increases in the repurchase program from time to time,
most recently on April 30, 2009, to result in authority as of such date to
repurchase up to a total of $250,000,000 of our common shares.
  ITEM 6.
              EXHIBITS
 
 Exhibit
      Number
                  
                  Description10.1
                  *
                  Amended
      and Restated Share Unit Plan for Nonemployee Directors.31.1
                  
                  Certification
      of Michael D. Price, Chief Executive Officer of Platinum Holdings,
      pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
      Act.31.2
                  
                  Certification
      of James A. Krantz, Chief Financial Officer of Platinum
      Holdings, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange
      Act.32.1
                  
                  Certification
      of Michael D. Price, Chief Executive Officer of Platinum Holdings,
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
      the Sarbanes-Oxley Act of 2002.32.2
                  
                  Certification
      of James A. Krantz, 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.
 
 *  
Items denoted with an asterisk represent management contracts or compensatory
plans or arrangements.
  - 29
-
 
 SIGNATURES
  Pursuant
to the requirements of the Securities 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:
      April 30, 2009
              /s/  Michael
      D. PriceBy:
      Michael D. PricePresident
      and Chief Executive Officer(Principal
      Executive Officer)
 
 Date:
      April 30, 2009
              /s/  James
      A. KrantzBy:
      James A. KrantzExecutive
      Vice President and Chief Financial Officer(Principal
      Financial and Accounting Officer)
  - 30
-