<PAGE>

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

                                    FORM 10-Q

(Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

            or

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
       EXCHANGE ACT OF 1934

      For the transition period from                to

                        Commission File Number 001-31341

                      PLATINUM UNDERWRITERS HOLDINGS, LTD.
                      ------------------------------------
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
            Bermuda                                            Not Applicable
            -------                                            --------------
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

Clarendon House, 2 Church Street, Hamilton, Bermuda                 HM11
---------------------------------------------------              ----------
     (Address of Principal Executive Offices)                    (Zip Code)
</TABLE>

                                 (441) 295-5950
                                 --------------
              (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    No  X   (not subject to such filing requirements for the past
               ---    ---   90 days)

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                             Yes    No  X
                                ---    ---
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:

                            43,004,000 Common Shares
                             as of December 11, 2002
<PAGE>
                      PLATINUM UNDERWRITERS HOLDINGS, LTD.
     QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2002

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        Page No.
                                                                        --------
<S>                                                                     <C>
PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements .........................................         1

        Platinum Underwriters Holdings, Ltd. and Subsidiaries

            Consolidated Balance Sheet as of September 30, 2002
              (Unaudited) ............................................         1

            Notes to Consolidated Balance Sheet as of
              September 30, 2002 (Unaudited) .........................         2

        Pro Forma Financial Statements ...............................         5

            Pro Forma Consolidated Balance Sheet as of September 30, 2002
              (Unaudited) ............................................         6

            Notes to Pro Forma Consolidated Balance Sheet as of
              September 30, 2002 (Unaudited) .........................         7

            Pro Forma Combined Statements of Underwriting Results
              for the Three Months Ended September 30, 2002 and
              2001 (Unaudited) .......................................         8

            Pro Forma Combined Statements of Underwriting Results
              for the Nine Months Ended September 30, 2002 and
              2001 (Unaudited) .......................................         9

            Notes to Pro Forma Combined Statements of Underwriting
              Results for the Three and Nine Months Ended September
              30, 2002 and 2001 (Unaudited) ..........................        10

Item 2. Management's Discussion and Analysis of Pro Forma Financial
          Condition and Underwriting Results .........................        12

Item 3. Quantitative and Qualitative Disclosure about Market Risk ....        28

Item 4. Controls and Procedures ......................................        29

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings ............................................        31

Item 2. Changes in Securities and Use of Proceeds ....................        31

Item 3. Defaults Upon Senior Securities ..............................        31

Item 4. Submission of Matters to a Vote of Security Holders ..........        31

Item 5. Other Information ............................................        31

Item 6. Exhibits and Reports on Form 8-K .............................        31

        (a) Exhibits .................................................        31
</TABLE>


                                       i
<PAGE>
<TABLE>
<S>                                                                     <C>
        (b) Reports on Form 8-K ......................................        31

THE PREDECESSOR BUSINESS

        Combined Statements of Underwriting Results for the Three
          and Nine Months Ended September 30, 2002 and 2001
          (Unaudited) ................................................       P-2

        Combined Statements of Identifiable Assets and Liabilities
          as of September 30, 2002 (Unaudited) and December 31,
          2001 .......................................................       P-3

        Combined Statements of Identifiable Cash Flows for the Three
          and Nine Months Ended September 30, 2002 and 2001
          (Unaudited) ................................................       P-4

        Notes to Predecessor Combined Statements
          (Unaudited) ................................................       P-5

        Management's Discussion and Analysis of Financial Condition
          and Underwriting Results of the Predecessor
          Business ...................................................       P-9

SIGNATURES

EXHIBIT INDEX

EXHIBITS
</TABLE>


                                       ii
<PAGE>
                        PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                      PLATINUM UNDERWRITERS HOLDINGS, LTD.
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

<TABLE>
<S>                                                          <C>
ASSETS
  Cash ...................................................   $120,000
  Cash held in trust .....................................     10,000
                                                             --------
    Total assets .........................................   $130,000
                                                             ========

LIABILITIES
  Payable to affiliate ...................................     10,000
                                                             --------

SHAREHOLDER'S EQUITY
  Common Shares - (par value $0.01:  135,000,000 shares
    authorized; 1,200,000 shares issued and outstanding) .     12,000
  Additional paid-in capital .............................    108,000
                                                             --------

  Total shareholder's equity .............................    120,000
                                                             --------

  Total liabilities and shareholder's equity .............   $130,000
                                                             ========
</TABLE>

See accompanying notes to consolidated balance sheet.
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

      This report should be read in conjunction with the Registration Statement
on Form S-1 (Registration No. 333-86906) (the "S-1 Registration Statement") of
Platinum Underwriters Holdings, Ltd. ("Platinum Holdings").

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION AND CONSOLIDATION

      The consolidated balance sheet has been prepared in conformity
with accounting principles generally accepted in the United States of America
("U.S. GAAP"). This balance sheet reflects the consolidated position of Platinum
Holdings and its subsidiaries (the "Company"), including Platinum Re (UK)
Limited ("Platinum UK"), Platinum Underwriters Bermuda, Ltd. ("Platinum
Bermuda"), Platinum Underwriters Finance, Inc. ("Platinum Finance"), Platinum
Regency Holdings ("Platinum Ireland") and, after its acquisition by Platinum
Holdings from The St. Paul Companies, Inc. ("St. Paul") upon completion of the
initial public offering of the common shares, par value $0.01 per share (the
"Common Shares") of Platinum Holdings (the "Public Offering"), Platinum
Underwriters Reinsurance, Inc. ("Platinum US"). All material intercompany
transactions have been eliminated in preparing these consolidated financial
statements.

      The Company's initial capitalization of $120,000, as reflected in the
consolidated balance sheet, was provided by an organizing trust on April 24,
2002.

      Platinum Holdings was incorporated on April 19, 2002 and was capitalized
on April 24, 2002 under the laws of Bermuda to hold subsidiaries that provide
property, casualty, and other reinsurance to insurers and reinsurers on a
worldwide basis. As of September 30, 2002, cash of $10,000, provided by St.
Paul, was held in trust on behalf of Platinum Holdings to pay specified
formation expenses. Upon the completion of the Public Offering, this amount will
be repaid to St. Paul.

      The information included in this report is unaudited but reflects all
adjustments which, in the opinion of management, are necessary for a fair
statement of the results of the interim periods covered thereby. All adjustments
are of a normal and recurring nature except as described herein. The preparation
of interim consolidated financial statements relies significantly upon
estimates. U.S. GAAP requires management to make current estimates and
assumptions that affect the reported amount 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 differ from those current estimates. Due
to nominal activity, the Company has not included a consolidated statement of
operations, comprehensive income, shareholder's equity and cash flows.

      Reference should be made to the Notes to Consolidated Balance Sheet on
pages F-4 to F-12 of the S-1 Registration Statement.  The amounts in those
notes have not changed materially except as in the ordinary course of business
or as otherwise disclosed in these notes.

2.    CREDIT FACILITY

      Platinum Holdings has entered into a 364-day committed credit facility
with a group of banks which will provide $100 million of aggregate borrowing
capacity. The credit facility contains various covenants and agreements,
including the requirement to maintain a specified tangible net worth and
leverage ratios, and terminates on June 20, 2003 unless extended with the
consent of the banks. It was a condition to Platinum Holdings' ability to borrow
under the credit facility that it receive not less than $825,000,000 of
aggregate proceeds (net of the underwriters' discount) from the sale of its
Common Shares in the Public Offering and the sale of its Common Shares to St.
Paul and RenaissanceRe Holdings Ltd. ("RenaissanceRe") in the private placements
as described in Note 4 below.

3.    CONTINGENT LIABILITIES

      Upon completion of the Public Offering, the Company will reimburse St.
Paul for expenses incurred by St. Paul in connection with the formation and
maintenance of the Company, including insurance costs, legal fees, bank expenses
and salaries. Total expenses incurred as of September 30, 2002 were $6.4
million.


                                       2
<PAGE>
4.    SUBSEQUENT EVENT: PUBLIC OFFERINGS AND RELATED TRANSACTIONS

      On November 1, 2002, Platinum Holdings completed the Public Offering of
33,044,000 Common Shares at a price to the public of $22.50 per share.
Concurrently with the completion of the Public Offering, Platinum Holdings sold
6,000,000 Common Shares (or 14% of the outstanding Common Shares) to St. Paul
at a price of $22.50 per share less the underwriting discount (the "St. Paul
Investment") in a private placement pursuant to a Formation and Separation
Agreement dated as of October 28, 2002 between Platinum Holdings and St. Paul
(the "Formation Agreement"). The Bye-laws of Platinum Holdings provide that the
voting power of St. Paul's Common Shares is limited to 9.9% of the voting power
of the outstanding Common Shares. Pursuant to the Formation Agreement, St. Paul
received an option to purchase up to 6,000,000 additional Common Shares at any
time during the ten years following the Public Offering at a price of $27.00 per
share (the "St. Paul Option"). In return for the Common Shares and the St. Paul
Option, St. Paul contributed to the Company cash in the amount of $123 million
and substantially all of the continuing reinsurance business and related assets
(the "Transferred Business") of the reinsurance segment of St. Paul ("St. Paul
Re"), including all of the outstanding capital stock of Platinum US. Among the
fixed assets transferred were furniture, equipment, systems and software, and
the intangible assets included broker lists, contract renewal rights and
licenses. These assets will be recorded at the values reflected on St. Paul's
books at the time of transfer.

      Concurrently with the completion of the Public Offering, Platinum Holdings
sold 3,960,000 Common Shares (or 9% of the outstanding Common Shares) to
RenaissanceRe at a price of $22.50 per share less the underwriting discount (the
"RenaissanceRe Investment") in a private placement pursuant to an Investment
Agreement dated as of September 20, 2002 by and among Platinum Holdings, St.
Paul and RenaissanceRe (the "Investment Agreement"). Pursuant to the Investment
Agreement, RenaissanceRe received an option to purchase up to 2,500,000
additional Common Shares at any time during the ten years following the Public
Offering at a purchase price of $27.00 per share (the "RenaissanceRe Option").

      The St. Paul Option was granted as part of the aggregate consideration
for St. Paul's cash contribution and its contribution of the Transferred
Business and its sponsorship of the Company, and was not granted in
compensation for services.  Similarly, the RenaissanceRe Option was granted to
RenaissanceRe in its role as a strategic investor through the RenaissanceRe
Investment, and was not granted in compensation for services.  Accordingly, no
compensation expense related to these options is recognized in the Company's
pro forma combined statements of underwriting results, nor will compensation
expense related to these options be recognized in the Company's consolidated
financial statements for periods following the completion of the Public
Offering.  For periods following the completion of the Public Offering, the
Company will report earnings per share on a basic and diluted basis.  The
diluted earnings per share will reflect the dilutive effect of all dilutive
instruments, including all outstanding options to purchase Common Shares.

      Concurrently with the completion of the Public Offering, Platinum Holdings
completed the initial public offering of 5,500,000 equity security units at a
price of $25 per unit (the "ESU Offering"). Each equity security unit consists
of a contract to purchase Common Shares in 2005, and an ownership interest in a
senior note, due 2007, of Platinum Finance. Platinum Holdings will make
quarterly contract adjustment payments under the purchase contracts of 1.75% per
year of the stated amount of $25 per unit. In addition, Platinum Finance will
make quarterly interest payments on the senior notes at an annual rate of 5.25%.
The senior notes are guaranteed by Platinum Holdings on a senior, unsecured
basis and are pledged as collateral to secure the holders' obligations to
acquire Common Shares in 2005.

      The net proceeds received from the above-described transactions and
transferred to the subsidiaries were as follows ($ in millions):

<TABLE>
                   <S>                           <C>
                   PROCEEDS RECEIVED
                   Public Offering ...........   $  703
                   ESU Offering ..............      132
                   Private Placements ........      212
                                                 ------
                                                 $1,047
                                                 ======
                   PROCEEDS TRANSFERRED
                   Platinum Bermuda ..........   $  485
                   Platinum US ...............      354
                   Platinum UK ...............      150
                   Other Entities ............       58
                                                 ------
                                                 $1,047
                                                 ======
</TABLE>

      In connection with the Public Offering, Platinum Holdings and its
subsidiaries entered into various agreements with St. Paul and its affiliates
and RenaissanceRe and its affiliates, as described in the S-1 Registration
Statement (the "Inception Agreements"). These agreements include several quota
share retrocession agreements pursuant to which St. Paul's subsidiaries
transferred the liabilities, related assets and rights and risks under


                                       3
<PAGE>
substantially all of the reinsurance contracts entered into by St. Paul's
subsidiaries on or after January 1, 2002 (except for certain liabilities
relating to the flooding in Europe in August 2002, named storms in existence at
the time of the completion of the Public Offering, and business underwritten in
London for certain financial services companies) (the "Quota Share Retrocession
Agreements"). These agreements provided for the transfer to the Company of cash
and other assets in an amount equal to substantially all of the existing loss
reserves (excluding reserves relating to liabilities retained by St. Paul),
allocated loss adjustment expense reserves, other reserves related to
non-traditional reinsurance treaties, unearned premium reserves (subject to
agreed upon adjustments) and other related reserves, which relate to contracts
entered into after January 1, 2002, as of the date of the transfer (as
determined 90 days after such date) and 100% of future premiums (less any
ceding commission under the Quota Share Retrocession Agreements) associated
with the reinsurance contracts relating to periods after the date of the
transfer.

      Platinum Holdings also entered into a five-year Services and Capacity
Reservation Agreement with RenaissanceRe, effective October 1, 2002 (the
"RenaissanceRe Services and Capacity Reservation Agreement"), pursuant to which
RenaissanceRe will provide services to the Company in connection with its
property catastrophe book of business. At the Company's request, RenaissanceRe
will analyze the Company's property catastrophe treaties and contracts and,
based upon such analysis, will provide the Company with quotations for rates for
non-marine non-finite property catastrophe retrocessional coverage with
aggregate limits up to $100,000,000 annually, either on an excess-of-loss or
proportional basis. The fee for the coverage commitment and the services
provided by RenaissanceRe under this agreement is $4 million at inception and at
each anniversary, adjusted to 3.5% of the Company's gross written non-marine
non-finite property catastrophe premium for the previous annual period, if such
amount is greater than $4 million. Either party may terminate this agreement if
the other is deemed impaired or insolvent by applicable regulatory or judicial
authorities or is the subject of conservation, rehabilitation, liquidation,
bankruptcy or similar insolvency proceedings.

      On October 28, 2002, Platinum Holdings increased its authorized shares to
225,000,000 from the 135,000,000 that were previously authorized.

      On December 4, 2002, Platinum UK received approval from the Financial
Services Authority to write the business conducted by St. Paul Re in the United
Kingdom.

                                       4
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
                         PRO FORMA FINANCIAL STATEMENTS

      The Company's pro forma consolidated balance sheet and pro forma combined
underwriting results presented herein are not indicative of the actual results
that the Company expects to achieve once the Company commences operations. Many
factors may cause the Company's actual results to differ materially from the pro
forma financial statements including, but not limited to, the following:

      -     The Company's pro forma combined statement of underwriting results
            includes premium and loss development on business entered into prior
            to January 1, 2002. Under the Quota Share Retrocession Agreements,
            the Company is assuming no premium or loss development on business
            entered into prior to January 1, 2002. As such, the Company's
            reported results in the Company's initial years of operation will
            not be subject to prior year development for periods prior to
            January 1, 2002. Therefore, the Company's reported premiums written
            and earned and reported losses and loss adjustment expenses in the
            Company's initial years of operation could be substantially lower
            than as presented in the Company's pro forma combined statement of
            underwriting results.

      -     Following the Public Offering, the Company will report underwriting
            results under the Quota Share Retrocession Agreements for the period
            through the date of completion of the Public Offering based on the
            application of retroactive reinsurance accounting, resulting in the
            premiums earned and losses incurred by St. Paul during such period
            being excluded from the Company's statement of underwriting results.
            Due to this exclusion, following the Public Offering, the Company's
            reported 2002 premiums written and earned and the Company's net
            underwriting results in 2002 could be substantially different than
            as presented in the Company's pro forma combined statement of
            underwriting results.

      -     The Company's pro forma consolidated balance sheet reflects the
            inception of the Quota Share Retrocession Agreements assuming
            transferred balances as of September 30, 2002. The Company's actual
            consolidated balance sheet will report transferred amounts
            determined as of 12:01 a.m. on November 2, 2002. Accordingly,
            underwriting gain or loss with respect to the assumed reinsurance
            contracts for the period from January 1, 2002 through the time of
            transfer will be retained by St. Paul.

      -     Although the Company expects to continue to be afforded the benefits
            of most of St. Paul Re's retrocessional reinsurance program through
            their expiration during 2002, the Company may enter into
            retrocessional reinsurance contracts with significantly different
            terms and conditions from those that have been made available to the
            Company from St. Paul Re and which form the basis of the Company's
            initial operations.

      -     The additional and reinstatement premiums recorded in 2001 by St.
            Paul Re's Finite Risk operating segment were primarily caused by
            losses relating to the September 11, 2001 terrorist attack. These
            additional and reinstatement premiums were unusually high and not
            necessarily indicative of the recurring premium volume the Company
            expects to write in that business segment.

      -     The Company's pro forma financial statements continue to reflect the
            discounting of the liability for certain assumed reinsurance
            contracts based on the Company's current intention to make
            arrangements to permit such discounting. If the Company does not put
            such arrangements in place, reinsurance contracts of a similar type
            entered into in the future would be reported on an undiscounted
            basis.


                                       5
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            ADJUSTMENTS
                                                   -------------------------------------------------------------
                                    HISTORICAL        (1)               (2)             (3)              (4)          PRO FORMA
                                    ----------        ---               ---             ---              ---          ---------
                                                                         ($ IN THOUSANDS)
<S>                                <C>             <C>              <C>             <C>              <C>             <C>
ASSETS
  Investments ..................   $        --     $   786,798      $   125,673     $   132,000      $        --     $ 1,044,471
  Cash .........................           130              --            1,902              --          288,648         290,680
  Deferred acquisition costs ...            --              --               --              --           33,015          33,015
  Funds held by
    reinsured ..................            --              --               --              --           60,077          60,077
  Other assets .................            --           6,767            6,612           5,500               --          18,879
                                   -----------     -----------      -----------     -----------      -----------     -----------
    TOTAL ASSETS ...............   $       130     $   793,565      $   134,187     $   137,500      $   381,740     $ 1,447,122
                                   ===========     ===========      ===========     ===========      ===========     ===========

LIABILITIES
  Unpaid losses and
    loss adjustment
    expense reserves ...........   $        --     $        --      $        --     $        --      $   199,680     $   199,680
  Unearned premium reserves ....            --              --               --              --          158,232         158,232
  Debt obligations .............            --              --               --         137,500               --         137,500
  Financial reinsurance
    liabilities ................            --              --               --              --           23,828          23,828
  Other liabilities ............            10          17,183               --           6,639               --          23,832
                                   -----------     -----------      -----------     -----------      -----------     -----------
    TOTAL LIABILITIES ..........   $        10     $    17,183      $        --     $   144,139      $   381,740     $   543,072
                                   ===========     ===========      ===========     ===========      ===========     ===========

SHAREHOLDERS' EQUITY
  Common Shares ................   $        12     $       358      $        60     $        --      $        --     $       430
  Additional paid-in capital ...           108         786,440          134,127          (6,639)              --         914,036
  Retained earnings ............            --         (10,416)              --              --               --         (10,416)
                                   -----------     -----------      -----------     -----------      -----------     -----------
    TOTAL SHAREHOLDERS' EQUITY .   $       120     $   776,382      $   134,187     $    (6,639)     $        --     $   904,050
                                   ===========     ===========      ===========     ===========      ===========     ===========

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY .........   $       130     $   793,565      $   134,187     $   137,500      $   381,740     $ 1,447,122
                                   ===========     ===========      ===========     ===========      ===========     ===========
</TABLE>

See accompanying notes to pro forma consolidated balance sheet.


                                       6
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
                  NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

      The Company has prepared its unaudited pro forma consolidated balance
sheet as of September 30, 2002 to reflect the Company's initial capitalization
in the amount of $120,000.

      The following describe amounts included in the "Adjustments" columns
above:

      1.    Amounts reflecting (a) the receipt of approximately $787 million,
            representing the net proceeds from the Public Offering and the
            RenaissanceRe Investment ($703 million and $84 million,
            respectively) based on the Public Offering price of $22.50 per
            share, without giving effect to any exercise of the St. Paul Option
            or the RenaissanceRe Option, (b) the redemption of the Common Shares
            that were issued at inception and capital contributed prior to the
            Public Offering, (c) the payment of certain formation and
            organization expenses, of which $10.4 million has been expensed, and
            (d) the Company entering into, and accruing for, the RenaissanceRe
            Services and Capacity Reservation Agreement as of September 30,
            2002. Additional formation and organization expenses were incurred
            prior to completion of the Public Offering. The net proceeds from
            the Public Offering will be invested in long-term, taxable fixed
            income securities.

      2.    Amounts representing the receipt of St. Paul's cash contribution of
            $123 million and the contribution of the Transferred Business at
            historical cost in exchange for the issuance of Common Shares and
            the St. Paul Option. Amounts related to net tangible assets
            contributed to the Company by St. Paul are recorded at St. Paul's
            book value as of September 30, 2002. Assets as of September 30, 2002
            include approximately $5 million of net assets of Platinum US
            consisting of cash and cash equivalents (which reflect a dividend of
            $15 million to be paid, prior to the completion of the Public
            Offering, to United States Fidelity and Guaranty Company ("USF&G"),
            the former parent of Platinum US) as well as approximately $7
            million of tangible assets and other intangible assets such as
            broker and customer lists and contract renewal rights and licenses.
            The net proceeds from St. Paul's cash contribution will be invested
            in long-term, taxable fixed income securities.

      3.    Amounts reflecting the receipt of approximately $132 million,
            representing the net proceeds from the ESU Offering and recognition
            of the present value of future contract adjustment payments ($6.6
            million) payable on the purchase contracts contained within the
            equity security units. The net proceeds from the ESU Offering will
            be invested in long-term, taxable fixed income securities.

      4.    Amounts reflecting Platinum US entering into the Quota Share
            Retrocession Agreements with St. Paul Re reinsuring certain assumed
            reinsurance contracts as of September 30, 2002.


                                       7
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
              PRO FORMA COMBINED STATEMENTS OF UNDERWRITING RESULTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)

                      THREE MONTHS ENDED SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                          HISTORICAL                        ADJUSTMENTS              PRO-FORMA
                                                         --------------------------------------
                                         ST. PAUL RE       (1)            (2)            (3)         PLATINUM
                                         -----------       ---            ---            ---         --------
                                                                    ($ IN MILLIONS)
<S>                                      <C>            <C>             <C>           <C>            <C>
NET PREMIUMS EARNED
  Net premiums written ...............    $     234      $     (21)                   $      --      $     213
  Change in unearned premiums, net ...           73            (29)                          --             44
                                          ---------      ---------      ---------     ---------      ---------
    Net premiums earned ..............          307            (50)            --            --            257
                                          ---------      ---------      ---------     ---------      ---------

LOSSES AND UNDERWRITING EXPENSES
  Losses and loss adjustment expenses           249            (22)                          --            227
  Policy acquisition expenses ........           56            (14)                          --             42
  Other underwriting expenses ........           23             (6)                           1             18
                                          ---------      ---------      ---------     ---------      ---------
    Total underwriting
       losses and expenses ...........    $     328      $     (42)     $      --     $       1      $     287
                                          ---------      ---------      ---------     ---------      ---------
  UNDERWRITING LOSS ..................    $     (21)     $      (8)     $      --     $      (1)     $     (30)
                                          =========      =========      =========     =========      =========
</TABLE>

                      THREE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                         HISTORICAL                    ADJUSTMENTS                   PRO-FORMA
                                                        ---------------------------------------
                                         ST. PAUL RE        (1)            (2)           (3)         PLATINUM
                                         -----------        ---            ---           ---         --------
                                                                     ($ IN MILLIONS)
<S>                                      <C>            <C>             <C>           <C>            <C>
NET PREMIUMS EARNED
  Net premiums written ...............    $     495      $     (22)     $      --     $      --      $     473
  Change in unearned premiums, net ...          (50)             1             --            --            (49)
                                          ---------      ---------      ---------     ---------      ---------
    Net premiums earned ..............          445            (21)            --            --            424
                                          ---------      ---------      ---------     ---------      ---------

LOSSES AND UNDERWRITING EXPENSES
  Losses and loss adjustment expenses           904            (97)                          --            807
  Policy acquisition expenses ........           30            (22)                          --              8
  Other underwriting expenses ........           24             (5)                           1             20
                                          ---------      ---------      ---------     ---------      ---------
    Total underwriting
       losses and expenses ...........    $     958      $    (124)     $      --     $       1      $     835
                                          ---------      ---------      ---------     ---------      ---------

  UNDERWRITING (LOSS) GAIN ...........    $    (513)     $     103      $      --     $      (1)     $    (411)
                                          =========      =========      =========     =========      =========
</TABLE>

See accompanying notes to pro forma combined statements of underwriting results.


                                       8
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
              PRO FORMA COMBINED STATEMENTS OF UNDERWRITING RESULTS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)

                      NINE MONTHS ENDED SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                  HISTORICAL                   ADJUSTMENTS                   PRO-FORMA
                                                 --------------------------------------
                                 ST. PAUL RE        (1)            (2)           (3)         PLATINUM
                                 -----------        ---            ---           ---         --------
                                                             ($ IN MILLIONS)
<S>                              <C>             <C>            <C>           <C>            <C>
NET PREMIUMS EARNED
  Net premiums written ........   $     897      $     (82)                   $      --      $     815
  Change in unearned
    premiums, net .............          92            (77)                          --             15
                                  ---------      ---------      ---------     ---------      ---------
    Net premiums earned .......         989           (159)            --            --            830
                                  ---------      ---------      ---------     ---------      ---------

LOSSES AND UNDERWRITING
EXPENSES
  Losses and loss adjustment
    expenses ..................         709           (132)                          --            577
  Policy acquisition expenses .         233            (47)                          --            186
  Other underwriting expenses .          59            (12)                           5             52
                                  ---------      ---------      ---------     ---------      ---------
    Total underwriting
      losses and expenses .....   $   1,001      $    (191)     $      --     $       5      $     815
                                  ---------      ---------      ---------     ---------      ---------
  UNDERWRITING (LOSS) GAIN ....   $     (12)     $      32      $      --     $      (5)     $      15
                                  =========      =========      =========     =========      =========
</TABLE>

                      NINE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                 HISTORICAL                    ADJUSTMENTS                    PRO-FORMA
                                                 ---------------------------------------
                                 ST. PAUL RE        (1)            (2)            (3)         PLATINUM
                                 -----------        ---            ---            ---         --------
                                                             ($ IN MILLIONS)
<S>                              <C>             <C>            <C>            <C>            <C>
NET PREMIUMS EARNED
  Net premiums written .......    $   1,196      $    (149)     $       2      $      --      $   1,049
  Change in unearned
    premiums, net ............         (151)            15             (1)            --           (137)
                                  ---------      ---------      ---------      ---------      ---------
    Net premiums earned ......        1,045           (134)             1             --            912
                                  ---------      ---------      ---------      ---------      ---------
LOSSES AND UNDERWRITING
EXPENSES
  Losses and loss adjustment
    expenses .................        1,330           (179)                           --          1,151
  Policy acquisition expenses           218            (61)                           --            157
  Other underwriting expenses            66            (14)                            5             57
                                  ---------      ---------      ---------      ---------      ---------
    Total underwriting
      losses and expenses ....    $   1,614      $    (254)     $      --      $       5      $   1,365
                                  ---------      ---------      ---------      ---------      ---------
  UNDERWRITING (LOSS) GAIN ...    $    (569)     $     120      $       1      $      (5)     $    (453)
                                  =========      =========      =========      =========      =========
</TABLE>

See accompanying notes to pro forma combined statements of underwriting results.


                                       9
<PAGE>
              PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
         NOTES TO PRO FORMA COMBINED STATEMENTS OF UNDERWRITING RESULTS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)

      The Company has prepared its unaudited pro forma combined statements of
underwriting results to represent the Company's reinsurance business as if the
Company had commenced its operations and the Public Offering, the ESU Offering,
the St. Paul Investment and the RenaissanceRe Investment had been completed as
of January 1, 2001. The Company's presentation of its unaudited pro forma
underwriting results assumes that all of the Inception Agreements, including
the RenaissanceRe Services and Capacity Reservation Agreement, were entered
into as of January 1, 2001. The Company has based its presentation on St. Paul
Re's actual underwriting results for the periods presented. For a discussion of
the historical results of underwriting of St. Paul Re, see "The Predecessor
Business." The Company has then adjusted these historical results to remove any
of St. Paul Re's reinsurance businesses that will not be part of the Company
following the completion of this Public Offering. The pro forma combined
underwriting results assume that all other retrocessional reinsurance with
respect to the assumed reinsurance contracts entered into in 2002 will remain
available to the Company.

      The Company's future results will depend in part on the amount of the
Company's investment income, which cannot be predicted and which will fluctuate
depending upon the types of investments the Company selects, the Company's
underwriting results and market factors. Actual tax expense in future periods
will be based on underwriting results plus investment income and other income
and expense items not reflected in the pro forma combined statements of
underwriting results. The Company's effective tax rate will reflect the
proportion of income recognized by the Company's operating subsidiaries, with
Platinum US taxed at the U.S. corporate income tax rate (35%), Platinum UK taxed
at the U.K. corporate tax rate (generally 30%), Platinum Ireland taxed at a 25%
corporate tax rate on non-trading income and a 16% corporate tax rate on trading
income (the latter rate to be reduced to 12.5% as of January 1, 2003), and
Platinum Bermuda taxed at a zero corporate tax rate. In 2002, the Company
expects to have a greater portion of the Company's income subject to U.S.
taxation and U.K. taxation than the Company expects to have in the future
because the Company's Bermuda operations are entirely new but can be expected to
grow as a proportion of the Company's business. As a result of changes in the
Company's geographic distribution of taxable income as well as changes in the
amount of the Company's non-taxable income and expense, the relationship between
the Company's reported income before tax and the Company's income tax expense
may change significantly from one period to the next.

      The following describe amounts deducted in the "Adjustments" columns
above:

      1.    Amounts related to St. Paul Re's reinsurance business representing
            lines of business that will not be transferred to the Company,
            including aviation and bond and credit reinsurance, certain
            financial risk and capital markets reinsurance products, and certain
            North American business previously underwritten in London. The
            Company will not obtain the renewal rights to these lines of
            business and will not assume liabilities related to these lines of
            business.

      2.    Amounts related to St. Paul Re's allocations from St. Paul's
            corporate aggregate excess-of-loss reinsurance program, and

      3.    Amounts related to the RenaissanceRe Services and Capacity
            Reservation Agreement.

      Included in the nine months ended September 30, 2001 pro forma combined
underwriting results are pre-tax losses related to the September 11, 2001
terrorist attack totaling $402 million. This amount includes gross losses and
loss adjustment expenses of $725 million, $144 million of ceded reinsurance, $89
million of additional and reinstatement premiums and $90 million of reduced
contingent commission expenses.


                                       10
<PAGE>
      The St. Paul Option will be granted as part of the aggregate consideration
for St. Paul's cash contribution and its contribution of the Transferred
Business and its sponsorship of the Company, and is not being granted in
compensation for services. Similarly, the RenaissanceRe Option will be granted
to RenaissanceRe in its role as a strategic investor through the RenaissanceRe
Investment, and is not being granted in compensation for services. Accordingly,
no compensation expense related to these options is recognized in the Company's
pro forma combined statements of underwriting results, nor will compensation
expense related to these options be recognized in the Company's consolidated
financial statements for periods following the completion of the Public
Offering. For periods following the completion of the Public Offering, the
Company will report earnings per share on a basic and diluted basis. The
diluted earnings per share will reflect the dilutive effect of all dilutive
instruments, including all outstanding options to purchase Common Shares.

      The following presents a reconciliation of the amounts in Adjustment
column 1 to amounts in the Notes to Predecessor Combined Financial Statements
(on pages P-5 through P-8) for the three months ended September 30, 2002 and
2001 and the nine months ended September 30, 2002 and 2001.

      Reconciliation of Amounts for the Three Months Ended September 30, 2002
and September 30, 2001:

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 2002                     SEPTEMBER 30, 2001
                                              ------------------                     ------------------
                                        NET PREMIUMS      UNDERWRITING          NET PREMIUMS      UNDERWRITING
                                           EARNED            RESULT                EARNED            RESULT
                                           ------            ------                ------            ------
                                               ($ IN MILLIONS)                          ($ IN MILLIONS)
<S>                                     <C>               <C>                   <C>               <C>
Activity related to lines of
  business identified by St.
  Paul to be exited including
  certain foreign offices,
  plus allocation of St. Paul
  corporate aggregate excess-
  of-loss reinsurance program
  (per page P-7) ...................           70                 3                    39              (154)

Lines of business written in
  St. Paul's foreign closed
  offices which St. Paul  has
  exited but which are being
  transferred to the Company
  as continuing business ...........          (20)                5                   (18)               51
                                           ------            ------                ------            ------
Pro forma adjustment related
  to lines of business written
  by St. Paul Re that will not
  be transferred to the
  Company (per page 8) .............           50                 8                    21              (103)
                                           ======            ======                ======            ======
</TABLE>

      Reconciliation of Amounts for the Nine Months Ended September 30, 2002 and
September 30, 2001:

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 2002                     SEPTEMBER 30, 2001
                                              ------------------                     ------------------
                                        NET PREMIUMS      UNDERWRITING          NET PREMIUMS      UNDERWRITING
                                           EARNED            RESULT                EARNED            RESULT
                                           ------            ------                ------            ------
                                               ($ IN MILLIONS)                          ($ IN MILLIONS)
<S>                                     <C>               <C>                   <C>               <C>
Activity related to lines of
  business identified by St.
  Paul to be exited including
  certain foreign offices,
  plus allocation of St. Paul
  corporate aggregate excess-
  of-loss reinsurance program
  (per page P-7) ..................           237               (41)                  216              (160)

Lines of business written in
  St. Paul's foreign closed
  offices which St. Paul  has
  exited but which are being
  transferred to the Company
  as continuing business ..........           (78)                9                   (82)               40
                                           ------            ------                ------            ------
Pro forma adjustment related
  to lines of business written
  by St. Paul Re that will not
  be transferred to the Company
  (per page 9) ....................           159               (32)                  134              (120)
                                           ======            ======                ======            ======

</TABLE>


                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA FINANCIAL CONDITION
        AND UNDERWRITING RESULTS

      The following pro forma discussion and analysis should be read in
conjunction with the Company's unaudited consolidated balance sheet and the
related notes included on pages 1 through 4 of this report, as well as the
Company's unaudited pro forma financial statements and the related notes
included on pages 5 through 11 of this report. The Company's unaudited
consolidated balance sheet and the Company's unaudited pro forma financial
statements have been prepared in accordance with U.S. GAAP.

      The Company's objective is to provide property and casualty reinsurance
coverages to a diverse clientele of insurers and select reinsurers on a
worldwide basis. The Company will operate principally by using reinsurance
brokers to market its products and principally as a lead reinsurer on treaty
reinsurance business. A substantial majority of the Company's business will be
written as excess-of-loss reinsurance. The Company intends to organize its
worldwide reinsurance business around three operating segments:

      -     GLOBAL PROPERTY AND MARINE. The Global Property and Marine operating
            segment will include principally property and marine reinsurance
            coverages. The Company intends to focus its underwriting activities
            primarily on catastrophe excess-of-loss and per risk excess-of-loss
            contracts. The Company intends to write other types of property
            reinsurance as well, including selected property pro rata
            reinsurance. This segment generated $289 million, or 35.5%, of the
            Company's pro forma net premiums written for the nine months ended
            September 30, 2002 ($248 million, or 23.6%, for the nine months
            ended September 30, 2001).

      -     GLOBAL CASUALTY. The Global Casualty operating segment will include
            principally general and automobile liability, professional
            liability, workers' compensation, accident and health coverages and
            casualty clash. The Company intends to focus its underwriting
            activities primarily on excess-of-loss reinsurance coverages. This
            segment generated $338 million, or 41.5%, of the Company's pro forma
            net premiums written for the nine months ended September 30, 2002
            ($503 million, or 48.0%, for the nine months ended September 30,
            2001).

      -     FINITE RISK. The Finite Risk operating segment will include
            principally non-traditional reinsurance treaties, including
            multi-year excess-of-loss, aggregate stop loss, finite quota share,
            loss portfolio transfer, and adverse loss development contracts. The
            Company intends to provide clients, either directly or through
            brokers, with customized solutions for their risk management and
            other financial management needs. The Company intends to focus its
            finite risk underwriting activities primarily on multi-year
            excess-of-loss and aggregate stop loss reinsurance treaties.
            Coverage classes within these products will primarily include
            property, casualty and marine exposures. This segment generated $188
            million, or 23.0%, of the Company's pro forma net premiums written
            for the nine months ended September 30, 2002 ($298 million, or
            28.4%, for the nine months ended September 30, 2001).


                                       12
<PAGE>
      In addition, the Company may write other property and casualty reinsurance
on an opportunistic basis. For a discussion of the basis on which pro forma net
premiums written were determined, see "Pro Forma Financial Statements" above.

PRO FORMA COMBINED UNDERWRITING RESULTS

      The following table summarizes the Company's pro forma combined
underwriting results for the three and nine months ended September 30, 2002 and
2001 as if the Public Offering, the ESU Offering, the St. Paul Investment and
the RenaissanceRe Investment had been completed on January 1, 2001:

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED          NINE MONTHS ENDED
                                              SEPTEMBER 30,              SEPTEMBER 30,
                                           ------------------          -----------------
                                           2002          2001          2002         2001
                                           ----          ----          ----         ----
                                            ($ IN MILLIONS)            ($ IN MILLIONS)
<S>                                      <C>           <C>           <C>          <C>
NET PREMIUMS EARNED
  Net premiums written ...............   $   213       $   473       $   815      $ 1,049
  Change in unearned premiums, net ...        44           (49)           15         (137)
                                         -------       -------       -------      -------
    Net premiums earned ..............       257           424           830          912
                                         =======       =======       =======      =======

LOSSES AND UNDERWRITING
  EXPENSES
  Losses and loss adjustment
    expenses .........................       227           807           577        1,151
  Policy acquisition expenses ........        42             8           186          157
  Other underwriting expenses ........        18            20            52           57
                                         -------       -------       -------      -------
    Total underwriting expenses ......   $   287       $   835       $   815      $ 1,365
                                         -------       -------       -------      -------

  Underwriting (loss) gain ...........   $   (30)      $  (411)      $    15      $  (453)
                                         =======       =======       =======      =======

SELECTED RATIOS - U.S. GAAP
  Losses and loss adjustment
    expenses .........................      88.0%        190.1%         69.5%       126.2%
  Underwriting expense ratio .........      23.6%          6.8%         28.6%        23.5%
                                         -------       -------       -------      -------
    Combined ratio ...................     111.6%        196.9%         98.1%       149.7%
                                         =======       =======       =======      =======

SELECTED RATIOS - STATUTORY
  Losses and loss adjustment
    expenses .........................      88.0%        190.1%         69.5%       126.2%
  Underwriting expense ratio .........      23.9%         10.4%         27.5%        24.2%
                                         -------       -------       -------      -------
    Combined ratio ...................     111.9%        200.5%         97.0%       150.4%
                                         =======       =======       =======      =======

     Impact of catastrophes on
       combined ratio(1) .............      22.3%        111.8%          4.8%        53.5%
                                         =======       =======       =======      =======
</TABLE>

  (1) Excludes ceded losses under St. Paul Re's aggregate excess-of-loss
      treaties, because such treaties extend to non-catastrophic as well as
      catastrophic losses as described below.

      Included in the nine months ended September 30, 2001 pro forma combined
underwriting results are pre-tax losses related to the September 11, 2001
terrorist attack totaling $402 million. This amount includes gross losses and
loss adjustment expenses of $725 million, $144 million of ceded reinsurance, $89
million of additional and reinstatement premiums, and $90 million of reduced
contingent commission expenses. The determination of the impact of catastrophes
on the combined ratio excludes the ceded losses under St. Paul Re's aggregate
excess-of-loss treaties; these treaties provide coverage for excess losses
arising from catastrophic and non-catastrophic events. The benefits of St. Paul
Re's aggregate excess-of-loss treaty for 2002 will remain available to the
Company for the balance of 2002 unless earlier terminated pursuant to its terms.


                                       13
<PAGE>
      RETROCESSIONAL REINSURANCE

      The Company's pro forma combined underwriting results for the three months
ended September 30, 2002 and 2001, and for the nine months ended September 30,
2002 and 2001 reflect the benefits of most of St. Paul Re's retrocessional
reinsurance program as it relates to the Company. The pro forma results do not
reflect the effects of the St. Paul corporate aggregate excess-of-loss
reinsurance program, which will not be available to the Company in 2002 or
thereafter. St. Paul Re has utilized retrocession agreements principally to
increase aggregate premium capacity and to reduce the risk of loss on
reinsurance underwritten. In addition, through St. Paul Re's aggregate
excess-of-loss treaties, St. Paul Re has maintained catastrophe reinsurance
programs for the purpose of limiting its exposure with respect to multiple
claims arising from a single occurrence or event. St. Paul Re's retrocession
agreements provide for recovery of a portion of claims and claims expense from
retrocessionnaires. Under these programs, on a pro forma basis, St. Paul Re
ceded the following amounts to retrocessionaires:

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED       NINE MONTHS ENDED
                                     SEPTEMBER 30,           SEPTEMBER 30,
                                  ------------------       -----------------
                                   2002        2001        2002         2001
                                   ----        ----        ----         ----
                                   ($ IN MILLIONS)          ($ IN MILLIONS)
<S>                              <C>         <C>         <C>          <C>
Ceded premiums written ........  $    14     $    58     $    56      $   128
Ceded premiums earned .........       24          55          49          120
Ceded losses and loss
  adjustment expenses .........      121         109          94          214
Ceded underwriting expenses ...        1           6           5            9
                                 -------     -------     -------      -------
    Net underwriting benefit
     (detriment) ..............  $    98     $    60     $    50      $   103
                                 =======     =======     =======      =======
</TABLE>

The amounts in the pro forma underwriting results on pages 8 and 9 include the
retrocession amounts reflected above.

      The amounts included in the pro forma underwriting results on pages 8 and
9 of this report, as well as the individual segment discussions on pages 17 to
25, include the retrocession amounts reflected above, less the following impacts
of St. Paul Re's aggregate excess-of-loss treaties as they relate to the
Company:

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED       NINE MONTHS ENDED
                                     SEPTEMBER 30,            SEPTEMBER 30,
                                  ------------------       -----------------
                                   2002         2001        2002         2001
                                   ----         ----        ----         ----
                                   ($ IN MILLIONS)           ($ IN MILLIONS)
<S>                              <C>          <C>         <C>          <C>
Ceded premiums written ........  $    (4)     $    15     $     3      $    52
Ceded premiums earned  ........        -           15          (1)          51
Ceded losses and loss
  adjustment expenses .........       (5)          43         (26)         121
                                 -------      -------     -------      -------
    Net underwriting
      (detriment) benefit .....  $    (5)     $    28     $   (25)     $    70
                                 =======      =======     =======      =======
</TABLE>

      Under the terms of St. Paul Re's aggregate excess-of-loss treaties, St.
Paul Re remits an initial margin premium in annual installments to its
counterparty, regardless of whether losses are ceded under the treaty. If losses
are ceded under these treaties, St. Paul Re remits additional premiums ceded,
plus accrued interest, to its counterparty when the related losses and loss
adjustment expenses are settled. For the nine months ended September 30, 2002,
no losses were ceded under the 2002 treaty. Net underwriting detriment in the
2002 nine-month period is driven by commutations in such period requested by one
retrocessionnaire of its ten percent portion of the 1999 and 2001 St. Paul Re
aggregate excess-of-loss treaties. In the nine-month period ending September 30,
2002, these commutations resulted in a reduction in ceded written and earned
premiums of $16 million and a reduction in ceded losses and loss adjustment
expenses incurred of $36 million, resulting in a net underwriting detriment of
$20 million. These commutations were done in conjunction with the commutation of
a reinsurance treaty underwritten by St. Paul Re for the same party which
resulted in a net underwriting benefit of $14 million.


                                       14
<PAGE>
The combined effect of these commutations resulted in a net underwriting
detriment of $6 million. The impact of these commutations is not expected to be
material to future operations or financial position. The additional net
underwriting detriment is due to $11 million of ceded premium pursuant to the
St. Paul Re aggregate excess of loss treaty with respect to the 2002 accident
year.

      THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written for the three-month period ended September 30, 2002
decreased 55.0% to $213 million from $473 million for the three-month period
ended September 30, 2001. This is composed of $96 million, or 45.1%, from the
Global Casualty segment, $77 million, or 36.2%, from the Global Property and
Marine segment and $40 million, or 18.8%, from the Finite Risk segment. The
decrease in premium is due to the non-renewal of certain contracts that did not
meet the Company's underwriting standards. In addition, a large quota share
contract was rescinded, resulting in a reduction of premium of $56 million. The
large quota share contract was a three-year quota share reinsurance contract
incepting in 1999. The coverage for 2001 was rescinded by mutual agreement
with the ceding company.

      Net premiums earned for the three months ended September 30, 2002
decreased 39.4% to $257 million from $424 million for the three months ended
September 30, 2001, reflecting the decrease in exposure offset by the impact of
rate increases.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred were $227 million in the
three months ended September 30, 2002 compared to $807 million in the three
months ended September 30, 2001. The large decrease is due to the significant
losses incurred in 2001 as a result of the September 11, 2001 terrorist attack.
The loss and loss adjustment expense ratio, also referred to as loss ratio
(which is the ratio of losses and loss adjustment expenses incurred, including
estimates for claims incurred but not reported, to premiums earned) was 88.0%
and 190.1% for the three months ended September 30, 2002 and 2001, respectively.
Catastrophe loss development had an unfavorable impact on loss ratios for the
three months ended September 30, 2002 of 22.3% and catastrophe losses had an
unfavorable impact of 111.8% for the three months ended September 30, 2001.

      Acquisition expenses

      Acquisition expenses were $42 million for the three-month period ended
September 30, 2002 compared to $8 million for the three-month period ended
September 30, 2001. The resulting acquisition expense ratio was 16.5% for the
three months ended September 30, 2002 compared to 2.0% for the three months
ended September 30, 2001. The acquisition expense for the three months ended
September 30, 2001 includes a large decrease in profit commissions related to
the September 11, 2001 terrorist attack.

      Other underwriting expenses

      Other underwriting expenses consisted of the cost of operations associated
with underwriting activities. These expenses include compensation, rent and all
other general expenses associated with the Company's underwriting activity and
exclude any investment or claim related expense. Other underwriting expenses
were $18 million for the three-month period ended September 30, 2002 and $20
million for the three-month period ended September 30, 2001. The other
underwriting expense ratio for the three months ended September 30, 2002 was
7.1% compared to 4.8% for the three-month period ended September 30, 2001. The
expense ratio increased due to a decrease in premiums earned offset by a
decrease in underwriting expenses, principally compensation.


                                       15
<PAGE>
      NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written for the nine-month period ended September 30, 2002
decreased 22.3% to $815 million from $1,049 million for the nine-month period
ended September 30, 2001, including $338 million, or 41.5%, from the Global
Casualty segment, $289 million, or 35.5%, from the Global Property and Marine
segment and $188 million, or 23.0%, from the Finite Risk segment. The decrease
in premium is due to the non-renewal of certain contracts that did not meet the
Company's underwriting standards. Rate increases on traditional business
averaging 33% offset some of the decrease in premium. In addition, a large
quota share contract was rescinded, resulting in a reduction of premium of $56
million. The large quota share contract was a three-year quota share
reinsurance contract incepting in 1999. The coverage for 2001 was rescinded by
mutual agreement with the ceding company.

      Net premiums earned for the nine months ended September 30, 2002 decreased
9.0% to $830 million from $912 million for the nine months ended September 30,
2001, reflecting the decrease in exposure offset by the impact of rate
increases.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred were $577 million in the nine
months ended September 30, 2002 compared to $1,151 million in the nine months
ended September 30, 2001. The large decrease is due to the significant losses
incurred in 2001 as a result of the September 11, 2001 terrorist attack. The
loss and loss adjustment expense ratio, also referred to as loss ratio (which is
the ratio of losses and loss adjustment expenses incurred, including estimates
for claims incurred but not reported, to premiums earned) was 69.5% and 126.2%
for the nine months ended September 30, 2002 and 2001, respectively. Catastrophe
loss development had an unfavorable impact on loss ratios for the nine months
ended September 30, 2002 of 4.8% and catastrophe losses had an unfavorable
impact of 53.5% for the nine months ended September 30, 2001.

      Acquisition expenses

      Acquisition expenses were $186 million for the nine-month period ended
September 30, 2002 compared to $157 million for the nine-month period ended
September 30, 2001. The resulting acquisition expense ratio was 22.4% for the
nine months ended September 30, 2002 compared to 17.2% for the nine months ended
September 30, 2001. The acquisition expense for the nine months ended September
30, 2001 includes a large decrease in profit commissions related to the
September 11, 2001 terrorist attack.

      Other underwriting expenses

      Other underwriting expenses consisted of the cost of operations associated
with underwriting activities. These expenses include compensation, rent and all
other general expenses associated with the Company's underwriting activity and
exclude any investment or claim related expense. Other underwriting expenses
were $52 million for the nine-month period ended September 30, 2002 and $57
million for the nine-month period ended September 30, 2001. The other
underwriting expense ratio for the nine months ended September 30, 2002 was
6.2% compared to 6.3% for the nine-month period ended September 30, 2001. The
expense ratio decreased due to a decrease in underwriting expenses, principally
compensation.


                                       16
<PAGE>
PRO FORMA UNDERWRITING RESULTS BY OPERATING SEGMENT

      The following table summarizes pro forma underwriting results and combined
ratios for each of the Company's three operating segments for the three months
ended September 30, 2002 and 2001, and the nine months ended September 30, 2002
and 2001:

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                    SEPTEMBER 30,               SEPTEMBER 30,
                                 ------------------          -----------------
                                 2002          2001          2002          2001
                                 ----          ----          ----          ----
                                  ($ IN MILLIONS)             ($ IN MILLIONS)
<S>                            <C>           <C>           <C>           <C>
GLOBAL PROPERTY & MARINE
Net premiums written ........  $    77       $    80       $   289       $   248
Net premiums earned .........       97            86           284           218
Losses and loss adjustment
  expenses ..................       70           293           148           336
Underwriting expenses .......       23            25            75            73
                               -------       -------       -------       -------
Underwriting gain (loss) ....  $     4       $  (232)      $    61       $  (191)
                               =======       =======       =======       =======
Combined ratio ..............     96.6%        368.3%         78.6%        187.6%

GLOBAL CASUALTY
Net premiums written ........  $    96       $   219       $   338       $   503
Net premiums earned .........      118           159           357           389
Losses and loss adjustment
  expenses ..................      122           156           320           382
Underwriting expenses .......       37            61           112           145
                               -------       -------       -------       -------
Underwriting loss ...........  $   (41)      $   (58)      $   (75)      $  (138)
                               =======       =======       =======       =======
Combined ratio ..............    134.2%        137.0%        120.9%        135.6%

FINITE RISK
Net premiums written ........  $    40       $   174       $   188       $   298
Net premiums earned .........       42           179           189           305
Losses and loss adjustment
  expenses ..................       35           358           109           433
Underwriting expenses .......       --           (58)           51            (4)
                               -------       -------       -------       -------
Underwriting gain (loss) ....  $     7       $  (121)      $    29       $  (124)
                               =======       =======       =======       =======
Combined ratio ..............     82.1%        167.4%         84.6%        140.4%

TOTAL
Net premiums written ........  $   213       $   473       $   815       $ 1,049
Net premiums earned .........      257           424           830           912
Losses and loss adjustment
  expenses ..................      227           807           577         1,151
Underwriting expenses .......       60            28           238           214
                               -------       -------       -------       -------
Underwriting (loss) gain ....  $   (30)      $  (411)      $    15       $  (453)
                               =======       =======       =======       =======
Loss and loss adjustment
  expense ratio .............     88.0%        190.1%         69.5%        126.2%
Underwriting expense ratio ..     23.6%          6.8%         28.6%         23.5%
                               -------       -------       -------       -------
Combined ratio ..............    111.6%        196.9%         98.1%        149.7%
                               =======       =======       =======       =======
</TABLE>


                                       17
<PAGE>
      The following table summarizes pro forma underwriting results and combined
ratios, excluding the impact of St. Paul Re's aggregate excess-of-loss treaties
and the impact of the September 11, 2001 terrorist attack, for each of its three
operating segments for the three months ended September 30, 2002 and 2001, and
the nine months ended September 30, 2002 and 2001:

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                    SEPTEMBER 30,               SEPTEMBER 30,
                                 ------------------          ------------------
                                 2002          2001          2002          2001
                                 ----          ----          ----          ----
                                  ($ IN MILLIONS)            ($ IN MILLIONS)
<S>                            <C>           <C>           <C>           <C>
GLOBAL PROPERTY & MARINE
Net premiums written.......... $    73       $    83       $   288       $   279
Net premiums earned...........      95            91           282           250
Losses and loss adjustment
  expenses....................      36            59           107           159
Underwriting expenses.........      23            26            75            74
                               -------       -------       -------       -------
Underwriting gain............. $    36       $     6       $   100       $    17
                               =======       =======       =======       =======
Combined ratio................    62.7%         93.0%         64.7%         93.0%

GLOBAL CASUALTY
Net premiums written.......... $    96       $   227       $   344       $   515
Net premiums earned...........     120           167           361           401
Losses and loss adjustment
  expenses....................     118           134           314           374
Underwriting expenses.........      38            63           112           146
                               -------       -------       -------       -------
Underwriting loss............. $   (36)      $   (30)      $   (65)      $  (119)
                               =======       =======       =======       =======
Combined ratio................   129.9%        117.8%        118.1%        129.6%

FINITE RISK
Net premiums written.......... $    47       $    90       $   194       $   219
Net premiums earned...........      50            94           194           225
Losses and loss adjustment
  expenses....................      52            75           114           158
Underwriting expenses.........      (1)           32            51            86
                               -------       -------       -------       -------
Underwriting (loss) gain...... $    (1)      $   (13)      $    29       $   (19)
                               =======       =======       =======       =======
Combined ratio................   101.1%        114.2%         84.7%        108.8%

TOTAL
Net premiums written.......... $   216       $   400       $   826       $ 1,013
Net premiums earned...........     265           352           837           876
Losses and loss adjustment
  expenses....................     206           268           535           691
Underwriting expenses.........      60           121           238           306
                               -------       -------       -------       -------
Underwriting (loss) gain...... $    (1)      $   (37)      $    64       $  (121)
                               =======       =======       =======       =======
Loss and loss adjustment
  expense ratio...............    77.6%         76.3%         63.9%         78.9%
Underwriting expense ratio....    22.9%         34.1%         28.5%         34.8%
                               -------       -------       -------       -------
Combined ratio................   100.5%        110.4%         92.4%        113.7%
                               =======       =======       =======       =======
</TABLE>

      The following provides a more detailed discussion of the pro forma
underwriting results for the three operating segments. To provide a more
meaningful analysis of the underlying performance of the business segments, the
discussion of segment results excludes the impact of St. Paul Re's aggregate
excess-of-loss treaties and the impact of the September 11, 2001 terrorist
attack.


                                       18
<PAGE>
GLOBAL PROPERTY AND MARINE

      The Global Property and Marine operating segment will include principally
property and marine reinsurance coverages. The Company intends to focus its
underwriting activities primarily on catastrophe and excess-of-loss per risk
contracts. The Company intends to write other types of property reinsurance as
well, including selected property pro rata insurance. The following table
summarizes the pro forma underwriting results of the Company's Global Property
and Marine segment for the three months ended September 30, 2002 and 2001, and
the nine months ended September 30, 2002 and 2001. The underwriting results
exclude the impact of St. Paul Re's aggregate excess-of-loss treaties and the
impact of the September 11, 2001 terrorist attack.

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                   SEPTEMBER 30,             SEPTEMBER 30,
                                -------------------        -----------------
                                 2002         2001         2002         2001
                                 ----         ----         ----         ----
                                  ($ IN MILLIONS)           ($ IN MILLIONS)
<S>                            <C>          <C>          <C>          <C>
Net premiums written.......... $    73      $    83      $   288      $   279
Net premiums earned...........      95           91          282          250
Losses and loss adjustment
  expenses....................      36           59          107          159
Underwriting expenses.........      23           26           75           74
                               -------      -------      -------      -------
Underwriting gain ............ $    36      $     6      $   100      $    17
                               =======      =======      =======      =======
Loss and loss adjustment
  expense ratio...............    38.5%        65.4%        38.1%        63.7%
Underwriting expense ratio....    24.2%        27.6%        26.6%        29.3%
                               -------      -------      -------      -------
Combined ratio................    62.7%        93.0%        64.7%        93.0%
                               =======      =======      =======      =======
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Global Property and Marine segment for the
three-month period ended September 30, 2002 decreased 12.0% to $73 million from
$83 million for the three-month period ended September 30, 2001. This decrease
was the result of decreased exposures through re-underwriting efforts, offset by
significant rate increases across all lines of business.

      Net premiums written in the Global Property and Marine segment included
$52 million in excess-of-loss reinsurance contracts and $21 million in
proportional contracts.

      Net premiums written in the Global Property and Marine segment increased
8.1% in the U.S. to $40 million for the three months ended September 30, 2002
compared to $37 million in the U.S. for the three months ended September 30,
2001. Net premiums written in the Global Property and Marine segment decreased
28.3% outside the U.S. to $33 million for the three months ended September 30,
2002 compared to $46 million outside the U.S. in the three months ended
September 30, 2001.

      Net premiums earned for the three months ended September 30, 2002 were
impacted by the same factors as written premiums and increased 4.4% to $95
million from $91 million for the three-month period ended September 30, 2001.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred by Global Property and Marine
segment were $36 million in the three months ended September 30, 2002 compared
to $59 million in the three months ended September 30, 2001. The decrease in the
three months ended September 30, 2002 was principally attributable to the
absence of major catastrophe losses. The Global Property and Marine segment's
loss ratio was 38.5% and 65.4% for the three-month periods ending September 30,
2002 and 2001, respectively.


                                       19
<PAGE>
      Underwriting expenses

      Acquisition costs associated with the Global Property and Marine segment
were $16 million for the three-month period ended September 30, 2002 compared to
$17 million for the three-month period ended September 30, 2001. After deferring
those costs related to the unearned portions of net premiums written, the
resulting acquisition expense ratio was 16.4% for the three months ended
September 30, 2002 compared to 18.1% for the three months ended September 30,
2001. The decrease in the expense ratio of 1.7 percentage points was
attributable to lower commission and brokerage costs across the segment.  Other
underwriting expenses of the Global Property and Marine segment, including
direct and allocated underwriting expenses were $7 million for the three-month
period ended September 30, 2002 and $9 million for the three-month period ended
September 30, 2001. The other underwriting expense ratio for the Global Property
and Marine segment for the three months ended September 30, 2002 was 7.8%
compared with 9.5% for the three-month period ended September 30, 2001. The
decrease in the other underwriting expense ratio was attributable to the
increase in written premiums and a decrease in other underwriting expenses,
mainly compensation related due to a reduction of employees.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Global Property and Marine segment for the
nine-month period ended September 30, 2002 increased 3.2% to $288 million from
$279 million for the nine-month period ended September 30, 2001. This increase
was the result of significant overall rate increases averaging 36%, offset by
decreased exposures through re-underwriting efforts across all lines of
business.

      Net premiums written in the Global Property and Marine segment included
$216 million in excess-of-loss reinsurance contracts and $72 million in
proportional contracts.

      Net premiums written in the Global Property and Marine segment grew 15.3%
in the U.S. to $158 million for the nine months ended September 30, 2002
compared to $137 million in the U.S. for the nine months ended September 30,
2002. Net premiums written in the Global Property and Marine segment decreased
8.5% outside the U.S. to $130 million for the nine months ended September 30,
2002 compared to $142 million outside the U.S. in the nine months ended
September 30, 2001.

      Net premiums earned for the nine months ended September 30, 2002 were
impacted by the same factors as written premiums and increased by 12.8% to $282
million from $250 million for the nine-month period ended September 30, 2001.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred by the Global Property and
Marine segment were $107 million in the nine months ended September 30, 2002
compared to $159 million in the nine months ended September 30, 2001. The
decrease in the nine months ended September 30, 2002 was principally
attributable to the absence of major catastrophe losses. The Global Property and
Marine segment's loss ratio was 38.1% and 63.7% for the nine-month periods
ending September 30, 2002 and 2001, respectively.

      Underwriting expenses

      Acquisition costs associated with the Global Property and Marine segment
were $53 million for the nine-month period ended September 30, 2002 compared to
$48 million for the nine-month period ended September 30, 2001. After deferring
those costs related to the unearned portions of net premiums written, the
resulting acquisition expense ratio was 18.8% for the nine months ended
September 30, 2002 and 2001. Other underwriting expenses of the Global Property
and Marine segment, including direct and allocated underwriting expenses were
$22 million for the nine-month period ended September 30, 2002 and $26 million
for the nine-month period ended September 30, 2001. The other underwriting
expense ratio for the Global Property and Marine segment for the nine months
ended


                                       20
<PAGE>
September 30, 2002 was 7.8% compared with 10.5% for the nine-month period ended
September 30, 2001. The decrease in the other underwriting expense ratio was
attributable to a decrease in other underwriting expenses, mainly compensation
related due to a reduction of employees.

GLOBAL CASUALTY

      The Global Casualty operating segment will include principally general and
automobile liability, professional liability, workers' compensation, accident
and health coverages and casualty clash. The Company intends to focus its
underwriting activities primarily on excess-of-loss reinsurance coverages. The
following table summarizes the pro forma underwriting results of the Company's
Global Casualty segment for the periods covered by this discussion. As with the
discussion of the Global Property and Marine segment, the underwriting results
below for the three months ended September 30, 2002 and 2001, and for the nine
months ended September 30, 2002 and 2001 exclude the impact of St. Paul Re's
aggregate excess-of-loss treaties and the impact of the September 11, 2001
terrorist attack.

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                    SEPTEMBER 30,             SEPTEMBER 30,
                                 ------------------         -------------------
                                 2002          2001          2002          2001
                                 ----          ----          ----          ----
                                  ($ IN MILLIONS)             ($ IN MILLIONS)
<S>                            <C>           <C>           <C>           <C>
Net premiums written.........  $    96       $   227       $   344       $   515
Net premiums earned..........      120           167           361           401
Losses and loss adjustment
  expenses...................      118           134           314           374
Underwriting expenses........       38            63           112           146
                               -------       -------       -------       -------
Underwriting loss............  $   (36)      $   (30)      $   (65)      $  (119)
                               =======       =======       =======       =======
Loss and loss adjustment
  expense ratio..............     98.3%         80.4%         87.0%         93.3%
Underwriting expense ratio...     31.6%         37.4%         31.1%         36.3%
                               -------       -------       -------       -------
Combined ratio...............    129.9%        117.8%        118.1%        129.6%
                               =======       =======       =======       =======
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Global Casualty segment for the three-month
period ended September 30, 2002 decreased 57.7% to $96 million from $227 million
for the three-month period ended September 30, 2001. The decrease in net
premiums written was primarily due to the re-underwriting of the portfolio
including the rescission of a large quota share contract and a decrease in
proportional reinsurance. The large quota share contract was a three-year quota
share reinsurance contract incepting in 1999. As a result of the strategic
initiative to improve profitability and focus on core lines of business, the
coverage for 2001 was rescinded by mutual agreement with the ceding company.
These decreases were offset by significant rate increases on renewal business.

      Net premiums written in the Global Casualty segment included $85 million
in excess-of-loss reinsurance contracts and $11 million in proportional
contracts.

      Net premiums written in the Global Casualty segment declined 59.6% in the
U.S. to $78 million for the three months ended September 30, 2002 compared to
$193 million in the U.S. in the three months ended September 30, 2001. Net
premiums written in the Global Casualty segment declined 47.1% outside the U.S.
to $18 million for the three months ended September 30, 2002 compared to $34
million outside the U.S. in the three months ended September 30, 2001. The
decreases reflect the rescission of the large quota share contract offset by
rate increases achieved on renewal business.


                                       21
<PAGE>
      Net premiums earned for the three months ended September 30, 2002 were
impacted by the same factors as net premiums written and decreased by 28.1% to
$120 million from $167 million for the three-month period ended September 30,
2001.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred in the Global Casualty
segment were $118 million in the three months ended September 30, 2002 compared
to $134 million in the three months ended September 30, 2001. Although loss and
loss adjustment expenses decreased, the loss ratio increased due to the
decrease in earned premium. The 2002 results are impacted by losses suffered
from reinsuring certain financial service companies and unfavorable development
in prior underwriting years. The Global Casualty segment's loss ratio was 98.3%
and 80.4% for the three-month periods ended September 30, 2002 and 2001,
respectively.

      Underwriting expenses

      Acquisition costs associated with the Global Casualty segment were $30
million for the three-month period ended September 30, 2002 compared to $54
million for the three-month period ended September 30, 2001, after deferring
those costs related to the unearned portion of premiums written. The resulting
acquisition expense ratio was 25.0% for the three months ended September 30,
2002 compared to 31.8% for the three months ended September 30, 2001. The
reduction in the acquisition expense ratio of 6.8 percentage points was
attributable to the rescission of a large quota share contract and better terms
and conditions negotiated with the Company's ceding companies. Other
underwriting expenses of the Global Casualty segment, including direct and
allocated underwriting expenses, were $8 million for the three-month period
ended September 30, 2002 and $9 million for the three-month period ended
September 30, 2001. The other underwriting expense ratio for the three months
ended September 30, 2002 was 6.6% compared to 5.6% for the three-month period
ended September 30, 2001. The increase in the other underwriting expense ratio
was attributable to the decrease in written premium offset by a decrease in
expenses, principally compensation related due to a reduction of employees.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Global Casualty segment for the nine-month
period ended September 30, 2002 decreased 33.2% to $344 million from $515
million for the nine-month period ended September 30, 2001. The decrease in net
premiums written was primarily due to the re-underwriting of the portfolio
including the rescission of a large quota share contract and a decrease in
proportional reinsurance. The large quota share contract was a three-year quota
share reinsurance contract incepting in 1999. As a result of the strategic
initiative to improve profitability and focus on core lines of business, the
coverage for 2001 was rescinded by mutual agreement with the ceding company.
These decreases to the portfolio were offset by significant rate increases on
renewal business averaging 31% across the portfolio.

      Net premiums written in the Global Casualty segment included $290 million
in excess-of-loss reinsurance contracts and $54 million in proportional
contracts.

      Net premiums written in the Global Casualty segment declined 33.0% in the
U.S. to $286 million for the nine months ended September 30, 2002 compared to
$427 million in the U.S. in the nine months ended September 30, 2001. Net
premiums written in the Global Casualty segment declined 34.1% outside the U.S.
to $58 million for the nine months ended September 30, 2002 compared to $88
million outside the U.S. in the nine months ended September 30, 2001. The
decreases reflect the rescission of the large quota share contract offset by
rate increases achieved on renewal business.

      Net premiums earned for the nine months ended September 30, 2002 were
impacted by the same factors as net premiums written and decreased by 10.0% to
$361 million from $401 million for the nine-month period ended September 30,
2001.


                                       22
<PAGE>
      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred in the Global Casualty
segment were $314 million in the nine months ended September 30, 2002 compared
to $374 million in the nine months ended September 30, 2001. The decrease is
attributable to less unfavorable development in prior underwriting years as well
as increased rates impacting the current underwriting year. The Global Casualty
segment's loss ratio was 87.0% and 93.3% for the nine-month periods ended
September 30, 2002 and 2001, respectively.

      Underwriting expenses

      Acquisition costs associated with the Global Casualty segment were $91
million for the nine-month period ended September 30, 2002 compared to $123
million for the nine-month period ended September 30, 2001, after deferring
those costs related to the unearned portion of premiums written. The resulting
acquisition expense ratio was 25.3% for the nine months ended September 30, 2002
compared to 30.6% for the nine months ended September 30, 2001. The reduction in
the acquisition expense ratio of 5.3 percentage points was attributable to the
rescission of a large quota share contract and better terms and conditions
negotiated with the Company's ceding companies. Other underwriting expenses of
the Global Casualty segment, including direct and allocated underwriting
expenses, were $21 million for the nine-month period ended September 30, 2002
and $23 million for the nine-month period ended September 30, 2001. The other
underwriting expense ratio for the nine months ended September 30, 2002 was 5.8%
compared to 5.7% for the nine-month period ended September 30, 2001. The
increase in the other underwriting expense ratio was attributable to the
decrease in premium written offset by a decrease in expenses, principally
compensation related due to a reduction of employees.

FINITE RISK

      The Finite Risk operating segment will include principally non-traditional
reinsurance treaties, including multi-year excess-of-loss, aggregate stop loss,
finite quota share, loss portfolio transfer, and adverse loss development
contracts. The Company intends to provide clients, either directly or through
brokers, with customized solutions for their risk management and other financial
management needs. The Company intends to focus its finite risk underwriting
activities primarily on multi-year excess-of-loss and aggregate stop loss
reinsurance treaties. Coverage classes within these products will primarily
include property, casualty, marine and/or whole account property and casualty
exposures. The following table summarizes results for the Finite Risk segment
for the periods covered by this discussion. As with the discussion of the
Company's other operating segments, the pro forma underwriting results below for
the three months ended September 30, 2002 and 2001, and for the nine months
ended September 30, 2002 and 2001 exclude the impact of St. Paul Re's aggregate
excess-of-loss treaties and the impact of the September 11, 2001 terrorist
attack.

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                    SEPTEMBER 30,              SEPTEMBER 30,
                                 ------------------          -----------------
                                 2002          2001          2002         2001
                                 ----          ----          ----         ----
                                  ($ IN MILLIONS)             ($ IN MILLIONS)
<S>                            <C>           <C>           <C>          <C>
Net premiums written.........   $    47      $    90       $   194      $   219
Net premiums earned..........        50           94           194          225
Losses and loss adjustment
  expenses...................        52           75           114          158
Underwriting expenses........        (1)          32            51           86
                                -------      -------       -------      -------
Underwriting (loss) gain.....   $    (1)     $   (13)      $    29      $   (19)
                                =======      =======       =======      =======
Loss and loss adjustment
  expense ratio..............     101.3%        79.7%         58.4%        70.3%
Underwriting expense ratio...      (0.2)%       34.5%         26.3%        38.5%
                                -------      -------       -------      -------
Combined ratio...............     101.1%       114.2%         84.7%       108.8%
                                =======      =======       =======      =======
</TABLE>


                                       23
<PAGE>
      THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Finite Risk segment for the three-month period
ended September 30, 2002 decreased 47.8% to $47 million from $90 million for the
three-month period ended September 30, 2001. The decrease in premiums written in
the three months ended September 30, 2002 compared with the three months ended
September 30, 2001 was due to a decrease in reinstatement premiums as a result
of the decreased catastrophe activity.

      Net premiums written in the Finite Risk segment declined 50.9% in the U.S.
to $28 million for the three months ended September 30, 2002 compared to $57
million in the U.S. in the three months ended September 30, 2001. Net premiums
written in the Finite Risk segment decreased 42.4% outside the U.S. to $19
million for the three months ended September 30, 2002 compared to $33 million
outside the U.S. for the three months ended September 30, 2001. The decrease is
due to a decrease in reinstatement premiums as a result of the decreased
catastrophe activity.

      Net premiums earned for the three months ended September 30, 2002 were
impacted by the same factors as net premiums written and decreased by 46.8% to
$50 million from $94 million for the three-month period ended September 30,
2001.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred in the Finite Risk segment
were $52 million for the three months ended September 30, 2002 compared to $75
million in the three months ended September 30, 2001. The decrease from the
three months ended September 30, 2001 was principally attributable to the
commutation of an assumed catastrophe treaty and the absence of large
losses. The commutation of this treaty resulted in a decrease in losses of $12
million. The Finite Risk segment's loss ratio was 101.3% and 79.7% for the
three-month periods ended September 30, 2002 and 2001, respectively.

      Underwriting expenses

      Acquisition costs associated with the Finite Risk segment were $(4)
million for the three-month period ended September 30, 2002 compared to $29
million for the three-month period ended September 30, 2001. After deferring
those costs related to the unearned portion of net premiums written, the
resulting acquisition expense ratio was a negative (6.3)% for the three months
ended September 30, 2002 compared to 31.8% for the three months ended September
30, 2001. The reduction in the expense ratio of 38.1 percentage points was
attributable to a decrease in profit commission reserves. Other underwriting
expenses of the Finite Risk segment, including direct and allocated underwriting
expenses, were $3 million for the three-month period ended September 30, 2002
and $3 million for the three-month period ended September 30, 2001. The other
underwriting expense ratio for the three months ended September 30, 2002 was
6.1% compared to 2.7% for the three-month period ended September 30, 2001. The
increase in the other underwriting expense ratio was attributable to the
decrease in net premiums written.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2001

      Net premiums

      Net premiums written in the Finite Risk segment for the nine-month period
ended September 30, 2002 decreased 11.4% to $194 million from $219 million for
the nine-month period ended September 30, 2001. The decrease in premiums written
in the nine months ended September 30, 2002 compared with the nine months ended
September 30, 2001 was due to a decrease in reinstatement premiums as a result
of the decreased catastrophe activity, offset by significant rate increases.


                                       24
<PAGE>
      Net premiums written in the Finite Risk segment declined 7.1% in the U.S.
to $118 million for the nine months ended September 30, 2002 compared to $127
million in the U.S. in the nine months ended September 30, 2001. Net premiums
written in the Finite Risk segment decreased 17.4% outside the U.S. to $76
million for the nine months ended September 30, 2002 compared to $92 million
outside the U.S. for the nine months ended September 30, 2001.

      Net premiums earned for the nine months ended September 30, 2002 were
impacted by the same factors as net premiums written and decreased by 13.8% to
$194 million from $225 million for the nine-month period ended September 30,
2001.

      Losses and loss adjustment expenses

      Losses and loss adjustment expenses incurred in the Finite Risk segment
were $114 million for the nine months ended September 30, 2002 compared to $158
million in the nine months ended September 30, 2001. The decrease from the nine
months ended September 30, 2001 was principally attributable to the commutation
of an assumed aggregate stop loss treaty and an assumed catastrophe treaty and
the absence of large losses. These commutations resulted in a decrease in
losses of $25 million. In the nine months ended September 30, 2001, the
Petrobras oil platform collapse impacted losses by $11 million. The Finite Risk
segment's loss ratio was 58.4% and 70.3% for the nine-month periods ended
September 30, 2002 and 2001, respectively.

      Underwriting expenses

      Acquisition costs associated with the Finite Risk segment were $42 million
for the nine-month period ended September 30, 2002 compared to $78 million for
the nine-month period ended September 30, 2001. After deferring those costs
related to the unearned portion of net premiums written, the resulting
acquisition expense ratio was 21.7% for the nine months ended September 30, 2002
compared to 34.7% for the nine months ended September 30, 2001. The reduction in
the expense ratio of 13.0 percentage points was attributable to lower commission
and brokerage costs across the segment. Other underwriting expenses of the
Finite Risk segment, including direct and allocated underwriting expenses, were
$9 million for the nine-month period ended September 30, 2002 and $8 million for
the nine-month period ended September 30, 2001. The other underwriting expense
ratio for the nine months ended September 30, 2002 was 4.6% compared to 3.8% for
the nine-month period ended September 30, 2001. The increase in the other
underwriting expense ratio was attributable to the decrease in net premiums
written.

LIQUIDITY AND CAPITAL RESOURCES

      Platinum Holdings is a holding company that will conduct no reinsurance
operations of its own. All of its reinsurance operations will be conducted
through its wholly owned operating subsidiaries Platinum US (which it owns
through Platinum Ireland and Platinum Finance), Platinum UK (which it owns
through Platinum Ireland) and Platinum Bermuda. As a holding company, Platinum
Holdings' cash flow will consist primarily of dividends, interest and other
permissible payments from its subsidiaries. Platinum Holdings will depend on
such payments to receive funds for general corporate purposes and to meet its
obligations, including the payment of any dividends to its shareholders.

      LIQUIDITY REQUIREMENTS

      The Company's principal consolidated cash requirements are expected to be
the payment of dividends to the Company's shareholders, the servicing of debt
(including interest payments on the senior notes and contract adjustment
payments on the purchase contracts included in the equity security units issued
in the ESU Offering), the acquisition of and investment in businesses, capital
expenditures, premiums retroceded and payment of losses and loss adjustment
expenses, policy benefits, brokerage commissions, excise taxes and operating
expenses.

      Platinum Holdings intends to recommend that its Board of Directors
authorize the payment of a dividend commencing with the first quarter of 2003.
It is intended that dividends will be recommended to the Board for approval and
payment on a quarterly basis. The dividends, if any, will be paid in U.S.
dollars. Platinum Holdings' dividend policy in future periods will depend on a
number of factors including the Company's results of operations, financial
condition,


                                       25
<PAGE>
capital and cash requirements, general business conditions, legal, contractual
and regulatory restrictions regarding the payment of dividends and other
factors.

      The Company will operate a treasury function responsible for managing
future banking relationships, capital raising activities including equity and
debt issues, Platinum Holdings' overall cash, cash pooling and liquidity
positions and the payment of internal and external dividends. Platinum Holdings'
subsidiaries will be responsible for managing local cash and liquidity
positions.

      SOURCES OF CASH

      Platinum Holdings' consolidated sources of funds will consist primarily of
premiums written, losses recovered from retrocedents, investment income and
proceeds from sales and redemptions of investments.

      In addition, Platinum Holdings has entered into a 364-day committed credit
facility with a group of banks that permits Platinum Holdings to make borrowings
of up to $100 million in the aggregate from time to time. The credit facility
contains various covenants and agreements, including a requirement that Platinum
Holdings satisfy specified tangible net worth and leverage ratios. Platinum
Holdings may not be able to extend or replace this credit facility upon
satisfactory terms when it terminates on June 20, 2003.

      RESTRICTIONS ON DIVIDEND PAYMENTS FROM PLATINUM HOLDINGS' OPERATING
SUBSIDIARIES

      Bermuda. Bermuda legislation imposes limitations on the dividends that
Platinum Bermuda may pay. Under the Bermuda Insurance Act, Platinum Bermuda will
be required to maintain a specified solvency margin and a minimum liquidity
ratio and will be prohibited from declaring or paying any dividends if doing so
would cause Platinum Bermuda to fail to meet its solvency margin and its minimum
liquidity ratio. Under the Bermuda Insurance Act, Platinum Bermuda will be
prohibited from paying dividends of more than 25% of its total statutory capital
and surplus at the end of the previous fiscal year unless it files an affidavit
stating that the declaration of such dividends has not caused it to fail to meet
its solvency margin and minimum liquidity ratio. The Bermuda Insurance Act will
also prohibit Platinum Bermuda from declaring or paying dividends without the
approval of the Supervisor of Insurance of Bermuda if Platinum Bermuda failed to
meet its solvency margin and minimum liquidity ratio on the last day of the
previous fiscal year. Additionally, under the Companies Act, Platinum Bermuda
may declare or pay a dividend only if it has no reasonable grounds for believing
that it is, or would after the payment, be unable to pay its liabilities as they
become due, or that the realizable value of its assets would thereby be less
than the aggregate of its liabilities and its issued share capital and share
premium accounts.

      United States. Platinum US is subject to regulation by the State of
Maryland. Under Maryland insurance law, Platinum US may pay dividends out of
surplus, provided it must give the Maryland Insurance Commissioner at least
thirty days' prior notice before paying an "extraordinary dividend" or making an
"extraordinary distribution." Extraordinary dividends and extraordinary
distributions are dividends or distributions which, together with any other
dividends and distributions paid during the immediately preceding twelve-month
period, would exceed the lesser of

      (1)   ten percent of Platinum US's statutory policyholders' surplus (as
            determined under statutory accounting principles) as of December 31
            of the prior year and

      (2)   Platinum US's net investment income excluding realized capital gains
            (as determined under statutory accounting principles) for the
            twelve-month period ending on December 31 of the prior year, plus
            any amounts of net investment income (excluding realized capital
            gains) in the three preceding years which have not been distributed.

These statutory limitations are subject to change. Platinum US may not pay
extraordinary dividends or make extraordinary distributions until either the
thirty-day notice period has expired (without the Maryland Insurance
Commissioner disapproving such payment) or the Maryland Insurance Commissioner
has approved the payment within that period. Extraordinary dividends and
extraordinary distributions may only be paid out of earned surplus.


                                       26
<PAGE>
      In addition, Platinum US must give ten days' prior notice to the Maryland
Insurance Commissioner of its intention to pay any dividend or make any
distribution other than an extraordinary dividend or extraordinary distribution.
The Maryland Insurance Commissioner has the right to prevent payment of such a
dividend or such a distribution if he or she determines, in his or her
discretion, that after the payment thereof Platinum US's policyholders' surplus
would be inadequate or could cause Platinum US to be in a hazardous financial
condition.

      As it is not engaged in the insurance business, Platinum Finance is not
subject to the restrictions on dividend payments or distributions set forth
above.

      United Kingdom. U.K. law prohibits Platinum UK from declaring a dividend
unless it has "profits available for distribution." The determination of
whether a company has profits available for distribution is based on its
accumulated realized profits less its accumulated realized losses.  While the
United Kingdom insurance regulatory laws impose no statutory restrictions on a
general insurer's ability to declare a dividend, the insurance regulator in the
United Kingdom strictly controls the maintenance of each insurance company's
solvency margin within its jurisdiction and may restrict Platinum UK from
declaring a dividend at a level which the regulator determines would adversely
affect Platinum UK's solvency requirements. It is common practice in the United
Kingdom to notify the regulator in advance of any significant dividend payment.

      Ireland. Platinum Ireland is currently a holding company incorporated
under the laws of Ireland. Irish law prohibits Platinum Ireland from declaring a
dividend unless it has "profits available for distribution" as determined under
Irish law. As Platinum Ireland is not currently a regulated entity, there are no
insurance or other regulatory laws applicable to the payment of dividends by
Platinum Ireland.

      ESTABLISHMENT OF LOSS RESERVES BY THE COMPANY'S INSURANCE SUBSIDIARIES

      Under U.S. GAAP, the Company will not be permitted to establish loss
reserves until the occurrence of an event which may give rise to a loss. Once
such an event occurs, the Company will establish reserves based upon estimates
of total losses incurred by the ceding insurers as a result of the event and the
Company's estimate of the portion of such loss the Company has reinsured. As a
result, only loss reserves applicable to losses incurred up to the reporting
date may be set aside, with no allowance for the provision of a contingency
reserve to account for expected future losses. Losses arising from future events
will be estimated and recognized at the time the loss is incurred and could be
substantial.

      Setting appropriate reserves for loss and loss adjustment expenses is an
inherently uncertain process. Loss reserves will represent the Company's
estimates, at a given point in time, of ultimate settlement and adjustment costs
of losses incurred, including losses that are incurred but not reported
("IBNR"). The Company will regularly review and update these estimates, using
the most current information available to the Company. Consequently, the
ultimate liability for a loss will likely differ from the original estimate.
Whenever the Company determines that any existing loss reserves are inadequate,
the Company is required to increase the loss reserves with a corresponding
reduction, which could be material, in the Company's operating results in the
period in which the deficiency is identified. The establishment of new reserves,
or the adjustment of reserves for reported claims, could result in significant
upward or downward changes to the Company's financial condition or results of
operations in any particular period.

      FUNCTIONAL CURRENCY

      The Company's functional currency will be the U.S. dollar. The Company's
operating currency will generally also be the U.S. dollar. However, premiums
receivable and losses payable in respect of a portion of the Company's business
will be denominated in currencies of other countries, principally the
industrialized countries. Consequently, the Company may, from time to time,
experience currency exchange gains and losses that could affect the Company's
financial position and results of operations. The Company does not expect to and
as a practical matter will not be able to hedge its non-U.S. dollar currency
exposure with respect to potential loss until a loss payable in a non-U.S.
dollar currency occurs, after which it may match such liability with assets
denominated in the same currency or enter into forward purchase contracts for
specific currencies. This type of exposure could be substantial. The Company
also does not intend to hedge the Company's non-U.S. dollar currency exposure
with respect to premiums receivable, which will be generally collected over the
relevant contract term. The Company


                                       27
<PAGE>
expects to exchange non-U.S. dollar denominated premiums upon receipt. The
Company may make foreign currency investments, generally for the purpose of
improving overall portfolio yield.

      INVESTMENT OF FUNDS

      With the exception of cash holdings, the Company's funds will be primarily
invested initially in fixed income securities, the market value of which is
subject to fluctuation depending on changes in prevailing interest rates. The
Company may in the future elect to also invest a portion of the Company's funds
in marketable equity securities. Nevertheless, an increase in interest rates may
result in losses, both realized and unrealized, on its investments.

      The Company does not expect its investment portfolio to include options,
warrants, swaps, collars or similar derivative instruments. The Company's
investment policy guidelines will provide that financial futures and options and
foreign exchange contracts may not be used in a speculative manner, but may be
used, subject to certain percentage limits, only as part of a defensive strategy
to protect the market value of the portfolio. Also, the Company does not expect
its portfolio to contain any investments in real estate or mortgage loans.

      POSTING OF SECURITY BY THE COMPANY'S NON-U.S. OPERATING SUBSIDIARIES

      Platinum UK and Platinum Bermuda are not licensed, approved or accredited
as reinsurers anywhere in the United States and, therefore, under the terms of
most of their contracts in the United States, they will have to provide security
to reinsureds to cover unpaid liabilities in a form acceptable to state
insurance commissioners. Typically, this type of security will take the form of
a letter of credit issued by an acceptable bank, the establishment of a trust,
or a cash advance. Platinum UK and Platinum Bermuda are expected to obtain
letters of credit through commercial banks. In turn, Platinum UK and Platinum
Bermuda will provide the banks security by giving the banks liens over certain
of Platinum UK's and Platinum Bermuda's investments.

      CAPITAL EXPENDITURES; INFLATION

      Platinum Holdings, Platinum US, Platinum UK and Platinum Bermuda do not
have any material commitments for capital expenditures.

      Platinum US, Platinum UK and Platinum Bermuda will estimate the effect of
inflation on their business and reflect these estimates in the pricing of their
reinsurance contracts when estimating reserves. The actual effects of inflation
on the results of the operating subsidiaries cannot be accurately known until
claims are ultimately settled. Levels of inflation also affect investment
returns.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      Market risk can be described as the risk of change in fair value of a
financial instrument due to changes in interest rates, equity prices,
creditworthiness, foreign exchange rates or other factors. The Company seeks to
mitigate that risk by a number of actions, as described below.

      INTEREST RATE RISK

      The Company's exposure to market risk for changes in interest rates will
be concentrated in the Company's investment portfolio once the Company commences
operations. Changes in investment values attributable to interest rate changes
will be mitigated, however, by corresponding and partially offsetting changes in
the economic value of the Company's insurance reserves. This exposure will be
monitored through periodic reviews of the Company's consolidated asset and
liability positions. Estimates of cash flows, as well as the impact of interest
rate fluctuations relating to the investment portfolio and insurance reserves,
will be modeled and reviewed periodically.


                                       28


<PAGE>
      CREDIT RISK

      The Company's investment portfolio is expected to include initially fixed
maturities and short-term investments, which will be subject to credit risk.
This risk is defined as the potential loss in market value resulting from
adverse changes in the borrower's ability to repay the debt. The Company's
investment objective will be to earn competitive relative returns by investing
in a diversified portfolio of securities. Credit risk will be actively managed
through stringent review and analysis of the creditworthiness of all potential
investments by a third-party firm contracted for this purpose.

      The Company will also have other receivable amounts subject to credit
risk. The most significant of these are reinsurance recoverables. To mitigate
the risk of these counterparties' nonpayment of amounts due, the Company will
establish business and financial standards for reinsurer approval, incorporating
ratings by major rating agencies and considering then-current market
information.

      EQUITY PRICE RISK

      The Company's investment portfolio may in the future include marketable
equity securities, which will be carried on the Company's consolidated balance
sheet at market value. These securities have exposure to price risk, which is
defined as the potential loss in market value resulting from an adverse change
in prices. If the Company invests in equity securities, the Company's objective
with respect to such investments will be to earn competitive relative returns by
investing in a diverse portfolio of high-quality, liquid securities. Portfolio
characteristics are expected to be analyzed regularly and market risk will be
actively managed through a variety of modeling techniques. If the Company
invests in equity securities, the Company's holdings are expected to be
diversified across industries, and concentrations in any one company or industry
will be limited by parameters established by senior management, as well as by
statutory requirements.

      FOREIGN CURRENCY EXPOSURE

      The Company's exposure to market risk for changes in foreign exchange
rates will be concentrated in the Company's insurance reserves denominated in
foreign currencies. In addition, there may be foreign currency exposure in the
Company's investment portfolio related to those investments that are denominated
in foreign currencies. Cash flows from foreign operations are expected to be the
primary source of funds for purchases of investments denominated in foreign
currencies. Those investments will be purchased primarily to hedge insurance
reserves and other liabilities denominated in the same currency, effectively
reducing the Company's foreign currency exchange rate exposure.

ITEM 4.  CONTROLS AND PROCEDURES

      Within the 90 days prior to the filing date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Securities Exchange Act
Rule 13a-15. Based on that evaluation, the Company's management, including the
Chief Executive Officer and Chief Financial Officer, concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information required to be included in the Company's periodic
reports to be filed with the Securities and Exchange Commission. In addition,
there have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies or material weaknesses. It should be noted that the
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.

FORWARD-LOOKING STATEMENTS

      The "Management's Discussion and Analysis of Pro Forma Financial Condition
and Underwriting Results," "Management's Discussion and Analysis of Financial
Condition and Underwriting Results of the


                                       29
<PAGE>
Predecessor Business" and "Quantitative and Qualitative Disclosures About Market
Risk" contain disclosures which are forward-looking statements. Forward-looking
statements include all statements that do not relate solely to historical or
current facts, and can be identified by the use of words such as "may," "will,"
"expect," "project," "estimate," "anticipate," "plan" or "continue." These
forward-looking statements are based upon the Company's current plans or
expectations and are subject to a number of uncertainties and risks that could
significantly affect current plans, anticipated actions and the Company's future
financial condition and results. The uncertainties and risks include, but are
not limited to, those relating to implementing the Company's business strategy
and successfully continuing the business acquired in the Public Offering; the
adequacy of the Company's loss reserves; conducting operations in a competitive
environment; conducting operations in foreign countries; dependence upon the
availability of key executives and reinsurance brokers; general economic
conditions, including the effects of market volatility or a prolonged U.S. or
global economic downturn or recession; variations in political, economic or
other factors such as currency exchange rates, inflation rates and recessionary
or expansive trends; the cyclicality of the property and casualty reinsurance
business; tax, legal or regulatory restrictions or limitations applicable to the
Company or the property and casualty reinsurance business generally, and changes
therein; significant weather-related or other natural or human-made disasters,
civil unrest or other external factors over which the Company has no control;
and changes in the Company's plans, strategies, objectives, expectations or
intentions, which may happen at any time at the Company's discretion. As a
consequence, current plans, anticipated actions and future financial condition
and results may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. Additionally, forward-looking statements
speak only as of the date they are made, and the Company assumes no obligation
to update or revise any of them in light of new information, future events or
otherwise.


                                       30
<PAGE>
                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

(d) Use of Proceeds.

      As discussed in Note 4 to the Notes to Consolidated Balance Sheet
included in Part I of this report, on November 1, 2002, Platinum Holdings
completed the Public Offering, the ESU Offering and private placements with St.
Paul and RenaissanceRe. The net proceeds received from such transactions were
as follows ($ in millions):

          Public Offering .....................   $  703
          ESU Offering ........................      132
          Private Placements ..................      212
                                                  ------
                                                  $1,047
                                                  ======

      Such net proceeds were transferred to Platinum Holdings' subsidiaries,
as follows ($ in millions):

          Platinum Bermuda ....................   $  485
          Platinum US .........................      354
          Platinum UK .........................      150
          Other Entities ......................       58
                                                  ------
                                                  $1,047
                                                  ======

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.

ITEM 5.  OTHER INFORMATION

      Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits.

<TABLE>
<CAPTION>
              Exhibit
               Number    Description
               ------    -----------
<S>                      <C>
                99.1     Certification Pursuant to 18 U.S.C. Section 1350, as
                         adopted pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

                99.2     Certification Pursuant to 18 U.S.C. Section 1350, as
                         adopted pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002
</TABLE>

(b)   Reports on Form 8-K.

      None.


                                       31
<PAGE>
                            THE PREDECESSOR BUSINESS

      Following is selected historical combined financial data of the
reinsurance segment of St. Paul prior to the Public Offering, which includes the
continuing business and related assets of St. Paul Re transferred to the Company
upon completion of the Public Offering as well as the St. Paul Re reinsurance
business that remained with St. Paul after the Public Offering. The pro forma
combined statements of underwriting results in Part I of this report show that
the Company's net premiums written for the nine months ended September 30, 2002
and 2001, as adjusted for the business not transferred and the exclusion of the
St. Paul corporate aggregate excess-of-loss reinsurance program, represent
approximately 91% and 88% respectively, of St. Paul Re's net premiums written
for the same periods. Also, it has been assumed that there is no premium or loss
development on business entered into prior to January 1, 2002. Accordingly, St.
Paul Re's underwriting results and St. Paul Re's combined statements presented
in this report are not indicative of the actual results of the Company
subsequent to the Public Offering. For a detailed discussion of the Company's
pro forma combined statements of underwriting results, see "Pro Forma Financial
Statements" and "Management's Discussion and Analysis of Pro Forma Financial
Condition and Underwriting Results."

      In addition to the effect of the non-transfer of certain portions of St.
Paul Re's business to the Company and the exclusion of the St. Paul corporate
aggregate excess-of-loss reinsurance program, other factors may cause the
Company's actual results to differ materially from St. Paul Re's results. For
example, although the Company continues to be afforded the benefits of St. Paul
Re's retrocessional program for the remainder of 2002, the Company may enter
into reinsurance contracts with significantly different terms and conditions
from those that have been made available to St. Paul Re from St. Paul and which
form the basis of St. Paul Re's results. Furthermore, the additional premiums
recorded in 2001 by St. Paul Re's finite risk business primarily associated with
the September 11, 2001 terrorist attack were exceedingly high and not
necessarily indicative of the recurring premium volume the Company expects to
write in that business segment. In addition, St. Paul Re's combined statements
reflect the discounting of the liability for certain assumed reinsurance
contracts using rates up to 7.5%, based on its return on invested assets or, in
many cases, on yields contractually guaranteed to it on funds held by the ceding
company, as permitted by applicable law. It is the Company's current intention
to make arrangements to permit such discounting to a similar extent as St. Paul
Re, which may include the organization and licensing of a U.S. subsidiary in
addition to Platinum US. If arrangements permitting the Company to discount
reserves to the same extent as St. Paul Re are not made, reinsurance contracts
of a similar type entered into in the future would be reported on an
undiscounted basis.


                                      P-1
<PAGE>
                          THE ST. PAUL COMPANIES, INC.
                 REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
                   COMBINED STATEMENTS OF UNDERWRITING RESULTS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
NET PREMIUMS EARNED
  Net premiums written.........        $  234     $  495      $  897    $1,196
  Change in unearned premiums..            73        (50)         92      (151)
                                       ------     ------      ------    ------
    Net premiums earned........        $  307     $  445      $  989    $1,045
                                       ------     ------      ------    ------
UNDERWRITING DEDUCTIONS
  Losses and loss adjustment
    expenses...................        $  249     $  904      $  709    $1,330
  Policy acquisition costs.....            56         30         233       218
  Other underwriting expenses..            23         24          59        66
                                       ------     ------      ------    ------
    Total underwriting expenses        $  328     $  958      $1,001    $1,614
                                       ======     ======      ======    ======

  UNDERWRITING LOSS ...........        $  (21)    $ (513)     $  (12)   $ (569)
                                       ======     ======      ======    ======
</TABLE>

See accompanying notes to predecessor combined statements.


                                      P-2
<PAGE>
                          THE ST. PAUL COMPANIES, INC.
                 REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
           COMBINED STATEMENTS OF IDENTIFIABLE ASSETS AND LIABILITIES
           AS OF SEPTEMBER 30, 2002 (UNAUDITED) AND DECEMBER 31, 2001

<TABLE>
<CAPTION>
                                                    AS OF            AS OF
                                                SEPTEMBER 30,     DECEMBER 31,
                                                -------------     ------------
                                                    2002              2001
                                                    ----              ----
                                                        ($ IN MILLIONS)
<S>                                             <C>               <C>
      IDENTIFIABLE ASSETS
        Reinsurance recoverables:
          Unpaid losses....................        $1,277            $1,256
          Paid losses......................            58                38
        Premium receivable.................           555               720
        Reserve for uncollectible premium
          receivable.......................           (29)              (13)
        Funds held by reinsureds...........           522               495
        Deferred policy acquisition costs..            70               107
        Ceded unearned premiums............            25                25
                                                   ------            ------
           Total identifiable assets.......        $2,478            $2,628
                                                   ======            ======

      IDENTIFIABLE LIABILITIES
        Loss and loss adjustment expense
          reserves.........................        $4,839            $4,949
        Assumed paid losses payable........            88                78
        Unearned premium reserves..........           316               401
        Reinsurance premiums payable.......           285               215
        Underwriting expenses payable......           142               181
        Funds held under reinsurance
          treaties.........................           142               169
        Profit commission reserves.........            97               110
        Financial reinsurance liability....           117                67
                                                   ------            ------
           Total reinsurance liabilities...        $6,026            $6,170
                                                   ======            ======
</TABLE>

      See accompanying notes to predecessor combined statements.


                                      P-3
<PAGE>
                          THE ST. PAUL COMPANIES, INC.
                 REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
                 COMBINED STATEMENTS OF IDENTIFIABLE CASH FLOWS
          FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED     NINE MONTHS ENDED
                                           SEPTEMBER 30,         SEPTEMBER 30,
                                         ----------------      -----------------
                                         2002        2001      2002         2001
                                         ----        ----      ----         ----
                                          ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                     <C>        <C>        <C>        <C>
Premiums collected, net..............   $  366     $  406     $1,195     $1,124
Loss and loss adjustment expenses
  paid...............................     (343)      (239)      (916)      (724)
Policy acquisitions expenses paid....      (66)       (75)      (252)      (296)
Other underwriting expenses paid.....       51        (30)       (81)       (52)
                                        ------     ------     ------     ------
Cash provided (used) by underwriting.   $    8     $   62     $  (54)    $   52
                                        ======     ======     ======     ======
</TABLE>


      See accompanying notes to predecessor combined financial statements.


                                      P-4
<PAGE>
                          THE ST. PAUL COMPANIES, INC.
                 REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
                    NOTES TO PREDECESSOR COMBINED STATEMENTS
                                   (UNAUDITED)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION

      The accompanying combined statements pertain to the reinsurance
underwriting segment of St. Paul for the three-month periods ended September 30,
2002 and 2001 and the nine-month periods ended September 30, 2002 and 2001. The
reinsurance underwriting segment of St. Paul is the predecessor to the Company
and is hereinafter referred to as "Predecessor." Predecessor financial
statements are presented on a combined basis, including certain insurance and
reinsurance subsidiaries within the St. Paul group, as well as the underwriting
results of the reinsurance departments of St. Paul Fire and Marine Insurance
Company ("Fire and Marine") and USF&G, St. Paul's two largest U.S. insurance
subsidiaries.

      St. Paul has informed the Company that it is the practice of St. Paul to
evaluate the performance of its property-liability insurance underwriting
segments on the basis of underwriting results.

      The statements of identifiable assets and liabilities represent those
balances that are specifically attributable to the underwriting operations of
Predecessor. St. Paul manages its property-liability investment portfolio in the
aggregate, as part of a separate segment and does not allocate assets, or
investment income, to its respective underwriting segments. There is also no
equity structure allocated to Predecessor. For these reasons, a complete
Predecessor balance sheet is not maintained.

      Similarly, the statement of identifiable cash flows includes only cash
flow activity that is specifically attributable to the underwriting operations
of Predecessor, and does not include any cash flows from investment and
financing activities.

      Reference should be made to the Notes to Combined Statements on pages F-17
to F-29 of the S-1 Registration Statement. The amounts in those notes have not
changed materially except as in the ordinary course of business or as otherwise
disclosed in these notes.

2.    REINSURANCE

      The primary purpose of Predecessor's ceded reinsurance program is to
protect its operations from potential losses in excess of acceptable levels.
Reinsurers are expected to honor their obligations under ceded reinsurance
contracts. In the event these companies are unable to honor their obligations,
Predecessor will pay these amounts. Allowances have been established for
possible nonpayment of such amounts due.

      In 2002, St. Paul is not party to an all-lines, corporate excess-of-loss
reinsurance treaty. In the three preceding years, cessions made under such
treaties had a significant impact on Predecessor's reported financial results.
In 2001, St. Paul was party to such an agreement that incepted on January 1 of
that year. Coverage under that treaty was not triggered in the first nine months
of 2001. However, Predecessor recorded ceded written premiums of $2 million and
ceded earned premiums of $1 million in those nine months representing
Predecessor's share of the initial premium paid for this treaty.

      Predecessor was party to a separate aggregate excess-of-loss reinsurance
treaty, unrelated to the corporate treaty, in both 2002 and 2001. Coverage has
not been triggered under that treaty in the first nine months of 2002, however
in the first nine months of 2002, Predecessor recorded ceded written premiums of
$(1) million, ceded earned premiums of $(5) million, and ceded loss and loss and
loss adjustment expenses of $(36) million, for a net detriment of $31 million as
a result of this treaty. Included in the net detriment for the first nine months
of 2002 was a $20 million detriment due to the partial commutation of the 1999
and 2001 aggregate excess-of-loss reinsurance treaties. For the nine months
ended September 30, 2001, Predecessor ceded $119 million of written premiums,
$118 million



                                      P-5
<PAGE>
of earned premiums and $273 million of losses and loss adjustment expenses, for
a net benefit of $155 million as a result of this treaty.

      George Town Re was established by St. Paul in 1996 for the purpose of
entering into a single reinsurance treaty with Predecessor, providing additional
underwriting capacity to Predecessor over a ten-year period. The agreement with
George Town Re was terminated on July 8, 2002, and George Town Re was
liquidated. The Company has been advised by St. Paul management that there is
no material impact on Predecessor's underwriting results from this transaction.

      The effect of assumed and ceded reinsurance on premiums written, premiums
earned and insurance losses and loss adjustment expenses was as follows:

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>         <C>       <C>
PREMIUMS WRITTEN
  Assumed......................        $  248     $  623      $  950    $1,426
  Ceded........................            14        128          53       230
                                       ------     ------      ------    ------
    Net premiums written.......        $  234     $  495      $  897    $1,196
                                       ======     ======      ======    ======
PREMIUMS EARNED
  Assumed......................        $  331     $  567      $1,042    $1,261
  Ceded........................            24        122          53       216
                                       ------     ------      ------    ------
    Total premiums earned......        $  307     $  445      $  989    $1,045
                                       ======     ======      ======    ======
INSURANCE LOSSES AND LOSS
  ADJUSTMENT EXPENSES
  Assumed......................        $  378     $1,148      $  810    $1,718
  Ceded........................           129        244         101       388
                                       ------     ------      ------    ------
TOTAL NET INSURANCE LOSSES AND
  LOSS ADJUSTMENT EXPENSES.....        $  249     $  904      $  709    $1,330
                                       ======     ======      ======    ======
</TABLE>

3.    SEGMENT INFORMATION

      Predecessor has four reportable segments: North American Property, North
American Casualty, International, and Finite Risk. These segments are consistent
with the manner in which Predecessor's business has been managed.

      Predecessor monitors and evaluates the performance of its segments based
principally on their underwriting results. Assets are not specifically
identifiable for these segments.

      The summary below presents premiums earned and underwriting results for
Predecessor's reportable segments.


                                      P-6
<PAGE>
<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                       ------------------    ------------------
                                         2002       2001       2002       2001
                                       -------    -------    --------   -------
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
PREMIUMS EARNED
    North American Property....        $   63     $   63      $  188    $  138
    North American Casualty....           125        147         396       408
    International..............            64         41         184       149
    Finite Risk................            55        194         221       350
                                       ------     ------      ------    ------
  TOTAL PREMIUMS EARNED........        $  307     $  445      $  989    $1,045

UNDERWRITING LOSS
    North American Property....        $   18     $ (216)     $   34    $ (210)
    North American Casualty....           (46)       (35)        (96)     (144)
    International..............            (4)      (148)         36       (95)
    Finite Risk................            11       (114)         14      (120)
                                       ------     ------      ------    ------
  TOTAL UNDERWRITING LOSS......        $  (21)    $ (513)     $  (12)   $ (569)
                                       ======     ======      ======    ======
</TABLE>

4.    EXITED LINES OF BUSINESS

      The following table presents the net premiums earned and underwriting
results for the three months ended September 30, 2002 and 2001 and the nine
months ended September 30, 2002 and 2001 for the lines of business to be exited,
announced as part of St. Paul's December 2001 strategic review. Based on the
relative results of the exited business and the continuing business, during the
nine months ended September 30, 2001, no portion of the corporate aggregate
excess-of-loss reinsurance program was allocated to the exited business. During
the nine months ended September 30, 2002, St. Paul did not enter into a
corporate aggregate excess-of-loss reinsurance program.

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>         <C>        <C>        <C>
NET PREMIUMS EARNED.........            70         39         237        216
UNDERWRITING RESULTS........             3       (154)        (41)      (160)
</TABLE>

5.    SUBSEQUENT EVENT: SALE OF ONGOING REINSURANCE BUSINESS

      On November 1, 2002, Platinum Holdings completed the Public Offering of
33,044,000 Common Shares at a price to the public of $22.50 per share.
Concurrently with the completion of the Public Offering, Platinum Holdings sold
6,000,000 Common Shares (or 14% of the outstanding Common Shares) to St. Paul at
a price of $22.50 per share less the underwriting discount in a private
placement pursuant to the Formation Agreement. The Bye-laws of Platinum Holdings
provide that the voting power of St. Paul's Common Shares is limited to 9.9% of
the voting power of the outstanding Common Shares. Pursuant to the Formation
Agreement, St. Paul received an option to purchase up to 6,000,000 additional
Common Shares at any time during the ten years following the Public Offering at
a price of $27.00 per share. In return for the Common Shares and the St. Paul
Option, St. Paul contributed to the Company cash in the amount of $123 million
and substantially all of the continuing reinsurance business and related assets
of St. Paul Re, including all of the outstanding capital stock of Platinum US.
Among the fixed assets transferred were furniture, equipment, systems and
software, and the intangible assets included broker lists, contract renewal
rights and licenses.

      At the time of the completion of the Public Offering, certain of Platinum
Holdings' subsidiaries entered into the Quota Share Retrocession Agreements
pursuant to which they reinsured Fire and Marine and St. Paul Reinsurance
Company Limited for certain reinsurance contracts incepting in 2002.


                                      P-7
<PAGE>
6.    SEPTEMBER 11, 2001 TERRORIST ATTACK

      On September 11, 2001, terrorists hijacked four commercial passenger jets
in the United States. Two of the jets were flown into the World Trade Center
towers in New York causing their collapse. The third jet was flown into the
Pentagon building in Washington, D.C., causing severe damage, and the fourth jet
crashed in rural Pennsylvania. This terrorist attack caused significant loss of
life and resulted in unprecedented losses for the property and casualty
insurance industry. St. Paul Re's estimated net pretax loss incurred as a result
of the terrorist attack totaled $500 million for the nine months ended September
30, 2001.

      The estimated underwriting loss of $500 million is recorded in the
accompanying combined statements of underwriting results for the three and nine
months ended September 30, 2001 in the following line items ($ in millions):

          Net premiums earned .....................     89
          Losses and loss adjustment expenses .....   (679)
          Other underwriting expenses .............     90
                                                     -----
                Total underwriting loss ...........  $(500)
                                                     =====

      The estimated loss of $500 million was distributed among Predecessor's
segments as follows ($ in millions):

          North American Property ..................    205
          North American Casualty ..................     35
          International ............................    150
          Finite Risk ..............................    110
                                                      -----
                                                      $(500)
                                                      =====

      In the fourth quarter of 2001, St. Paul Re recorded an additional loss
provision of $56 million to bring the estimated loss to $556 million.

      St. Paul Re continually evaluated the adequacy of the net loss provision
recorded, based on claim experience, collections from its reinsurers, and other
factors. In the first nine months of 2002, St. Paul Re recorded an additional
$21 million to its estimated loss provision recorded in 2001 for the terrorist
attack.

      Through September 30, 2002, St. Paul Re had made net loss payments
totaling $153 million relating to the attack since it occurred, of which $150
million were made in the first nine months of 2002.


                                      P-8
<PAGE>
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                UNDERWRITING RESULTS OF THE PREDECESSOR BUSINESS

      The following discussion and analysis pertains to the operating results of
the reinsurance underwriting segment of St. Paul for the three-month periods
ended September 30, 2002 and 2001, and for the nine-month periods ended
September 30, 2002 and 2001. This discussion and analysis should be read in
conjunction with St. Paul Re's combined statements and related notes found on
pages P-1 to P-8 of this report, because they contain important information that
is helpful in evaluating St. Paul Re's operating results and financial
condition.

      St. Paul Re's operations include the underwriting results of certain
insurance and reinsurance subsidiaries in St. Paul's group of companies, as well
as the underwriting results of the reinsurance departments of Fire and Marine,
and USF&G, St. Paul's two largest U.S. insurance subsidiaries.

      It is the practice of St. Paul to evaluate the performance of its
property-casualty insurance underwriting segments on the basis of underwriting
results. Therefore, this discussion focuses on each segment's performance based
on underwriting results. The Company has been advised by the management of St.
Paul that it does not allocate assets or investment income to its respective
underwriting segments, and therefore, neither assets nor surplus are
specifically identifiable for St. Paul Re. As a result, the following discussion
and analysis focuses almost exclusively on those factors influencing
underwriting performance for each of St. Paul Re's four business segments. Those
segments, whose results are analyzed in more detail later in this discussion,
are as follows: North American Casualty, North American Property, International,
and Finite Risk.

      In the years prior to 2002, St. Paul Re generally underwrote traditional
treaty and facultative reinsurance for property, casualty, ocean marine, surety,
accident and health and certain specialty classes of coverage for leading
property and casualty insurance companies worldwide. St. Paul Re also underwrote
certain types of "non-traditional" reinsurance, which provides limited
traditional underwriting risk combined with financial risk protection. In late
2001, St. Paul announced a series of actions designed to improve its
profitability, including plans to narrow the product offering and geographic
presence of its reinsurance operations. As a result, in January 2002, St. Paul
Re began focusing almost exclusively on the following types of reinsurance
coverages: property catastrophe, excess-of-loss casualty, marine and traditional
finite.

CRITICAL ACCOUNTING POLICIES

      St. Paul Re's significant accounting policies are described in Notes to
Predecessor's Combined Statements. The following is a summary of the
critical accounting policies that affected the components comprising St. Paul
Re's underwriting performance.

      PREMIUMS

      Premiums were recorded at the inception of each policy, based upon
information received from ceding companies and their brokers. For excess-of-loss
contracts, the amount of premium was usually contractually documented at
inception, and no management judgment was necessary in accounting for this.
Premiums were earned on a pro rata basis over the contract period. For
proportional treaties, the amount of premium was normally estimated at inception
by the ceding company. St. Paul Re account for such premium using the initial
estimates, and then adjusted them once a sufficient period for actual premium
reporting had elapsed, normally around three years. For the year ended December
31, 2001, the net amount of premium written resulting from estimate accruals was
less than 25% of total premiums written. St. Paul Re also accrued for
reinstatement premiums resulting from losses. Such accruals were based upon
actual contractual terms, and the only element of management judgment involved
was with respect to the amount of loss reserves, as described below.

      Reinstatement and additional premiums are written at the time a loss event
occurs where coverage limits for the remaining life of the contract are
reinstated under pre-defined contract terms. Reinstatement premiums are the
premiums charged for the restoration of the reinsurance limit of a catastrophe
contract to its full amount after payment by the reinsurer of losses as a result
of an occurrence. These premiums relate to the future coverage obtained during
the remainder of the initial policy term, and are carried over the remaining
policy term. Additional


                                      P-9
<PAGE>
premiums are premiums charged after coverage has expired, related to experience
during the policy term, which are earned immediately.

      RESERVES

      Under U.S. GAAP, St. Paul Re was not permitted to establish loss reserves
until the occurrence of an event which may give rise to a loss. Once such an
event occurred, St. Paul Re established reserves based upon estimates of total
losses incurred by the ceding insurers as a result of the event and St. Paul
Re's estimate of the portion of such loss it has reinsured. As a result, only
loss reserves applicable to losses incurred up to the reporting date may be set
aside, with no allowance for the provision of a contingency reserve to account
for expected future losses. Losses arising from future events will be estimated
and recognized at the time the loss is incurred and could be substantial.

      Setting appropriate reserves is an inherently uncertain process. Loss
reserves represent St. Paul Re's estimates, at a given point in time, of
ultimate settlement and adjustment costs of losses incurred (including IBNR
losses). St. Paul Re regularly reviewed and updated these estimates, using the
most current information available. Consequently, the ultimate liability for a
loss was likely to differ from the original estimate. Whenever St. Paul Re
determined that any existing loss reserves were inadequate, St. Paul Re was
required to record such change in estimate, increasing the loss reserves with a
corresponding negative impact, which could be material, in St. Paul Re's
underwriting results in the period in which the deficiency was identified. The
establishment of new reserves, or the adjustment of reserves for the reported
claims, could result in significant upward or downward changes to St. Paul Re's
financial condition or results of underwriting in any particular period.

      The reserve for losses and loss adjustment expenses was based upon
reports, individual case estimates received from ceding companies, and
management's estimates. St. Paul Re management's estimates were used mostly to
estimate IBNR loss amounts. For certain catastrophic events, there was
considerable uncertainty underlying the assumptions and associated estimated
reserves for losses and loss adjustment expenses. Reserves were reviewed
regularly and, as experience developed and additional information became known,
the reserves were adjusted as necessary. Such changes in estimates, if
necessary, were reflected in results of operations in the current period.

      Liabilities for unpaid losses and loss adjustment expenses related to
certain assumed reinsurance contracts are discounted to the present value of
estimated future payments. The liabilities related to these reinsurance
contracts were discounted based on St. Paul Re's return on invested assets, or
in many cases, on yields contractually guaranteed to St. Paul Re on funds held
by the ceding company, as permitted.

      REINSURANCE

      Written premiums, earned premiums, and incurred losses and loss adjustment
expenses reflected the net effects of assumed and ceded reinsurance
transactions. Reinsurance accounting was followed for assumed and ceded
transactions when risk transfer requirements had been met. These requirements
involved significant assumptions being made related to the amount and timing of
expected cash flows, as well as the interpretation of underlying contract terms.
Assumed reinsurance contracts that did not transfer significant insurance risk
were required to be accounted for as deposits. These deposits were accounted for
as financing transactions, with interest expense credited to the contract
deposit. Premiums received on retroactive reinsurance contracts are not
reflected in the statement of operations, but rather are recorded in the
combined statement of identifiable underwriting assets and liabilities as an
increase to loss and loss adjustment expense reserves for the liabilities
assumed and as assets based on the consideration received. A deferred charge or
credit is recorded for any difference between liabilities assumed and
consideration received.


                                      P-10
<PAGE>
CONSOLIDATED OVERVIEW

      The following table summarizes St. Paul Re's results for the periods
presented:

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>         <C>       <C>
NET PREMIUMS EARNED
Net premium written............        $  234     $  495      $  897    $1,196
Change in unearned premiums....            73        (50)         92      (151)
                                       ------     ------      ------    ------
    Net premiums earned........        $  307     $  445      $  989    $1,045
                                       ------     ------      ------    ------
UNDERWRITING DEDUCTIONS
Loss and loss adjustment
  expenses.....................        $  249     $  904      $  709    $1,330
Policy acquisition costs.......            56         30         233       218
Other underwriting expenses....            23         24          59        66
                                       ------     ------      ------    ------
    Total underwriting expenses        $  328     $  958      $1,001    $1,614
                                       ======     ======      ======    ======
    UNDERWRITING LOSS .........        $  (21)    $ (513)     $  (12)   $ (569)
                                       ======     ======      ======    ======
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. THREE MONTHS ENDED SEPTEMBER 30,
      2001

      Net written premium declined 52.7% to $234 million for the three months
ended September 30, 2002 compared to $495 million for the three months ended
September 30, 2001. The net premium written for the three months ended September
30, 2001 includes $89 million in reinstatement premium related to the September
11, 2001 terrorist attack. Net written premium in the three months ended
September 30, 2002 reflects premium volume declines from lines of business
targeted for exit as part of St. Paul's strategic initiative to improve
profitability, offset by significant rate increases achieved on the 2002
renewals.

      The $492 million improvement in the underwriting result is due to the
significant decline in catastrophe loss activity. The underwriting loss of $513
million for the three months ended September 30, 2001 reflected losses totaling
$500 million for the September 11, 2001 terrorist attack and $50 million
relating to a chemical plant explosion in Toulouse, France. The underwriting
loss of $21 million for the three months ended September 30, 2002 includes
losses of $30 million for the flooding in Europe in August 2002 and an
additional $21 million of adverse development for the September 11, 2001
terrorist attack, offset by rate increases achieved on the 2002 renewals.

      Loss Ratio

      The loss ratio measures insurance losses and loss adjustment expenses
incurred as a percentage of earned premiums.

      St. Paul Re's reported loss ratio for the three months ended September 30,
2002 was 81.1%, compared with 203.3% in the same 2001 period. The loss ratio for
the three months ended September 30, 2001 includes losses suffered as a result
of the September 11, 2001 terrorist attack.

      Expense Ratio

      St. Paul Re's reported expense ratio for the three months ended September
30, 2002 was 26.1%, compared with 14.6% in the same period of 2001. The expense
ratio for the three months ended September 30, 2001 included a benefit resulting
from a $90 million reduction in contingent commissions that had been accrued
prior to September


                                      P-11
<PAGE>
11, 2001. The magnitude of losses from the terrorist attack resulted in the
reversal of that accrual. The expense ratio for the three months ended September
30, 2002 includes benefits due to rate increases and the exiting of unprofitable
lines of business.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. NINE MONTHS ENDED SEPTEMBER 30,
      2001

      The 25.0% decrease in net premiums written for the nine months ended
September 30, 2002 compared to the nine months ended September 30, 2001 was
primarily due to the reduced volume from the lines of business targeted for exit
as part of St. Paul's strategic initiative to improve profitability and the
rescission of a large quota share contract in the second quarter of 2002. These
declines were partly offset by significant rate increases achieved on 2002
renewals. Net premiums earned in the nine months ended September 30, 2001
includes $89 million in reinstatement premium as a result of the September 11,
2001 terrorist attack.

      The $557 million improvement in underwriting results principally reflects
a significant decline in catastrophe losses (the prior period reflected $500
million of losses relating to the September 11, 2001 terrorist attack and $50
million relating to a chemical plant explosion in Toulouse, France) as well as
the impact of substantial rate increases on 2002 renewals, favorable prior year
development and benefits derived from exiting unprofitable lines of business.
Catastrophe losses for the nine months ended September 30, 2002 were $34 million
as compared to $754 million for the nine months ended September 30, 2001.
Catastrophe losses incurred for the nine months ended September 30, 2002 include
$30 million from the flooding in Europe in August 2002 and an additional $21
million of adverse development for the September 11, 2001 terrorist attack,
partly offset by favorable development on prior year catastrophes of $15
million.

      Loss Ratio

      The loss ratio measures insurance losses and loss adjustment expenses
incurred as a percentage of earned premiums.

      St. Paul Re's reported loss ratio for the nine months ended September 30,
2002 was 71.7%, compared with 127.3% in the same 2001 period. The 55.6
percentage point improvement in the loss ratio was primarily due to a reduction
in catastrophe losses. The loss ratio for the nine months ended September 30,
2001 includes losses suffered as a result of the September 11, 2001 terrorist
attack. Also contributing to the improvement are rate increases across all
segments and the exit of unprofitable lines of business, tempered by
deteriorating results in discontinued lines of business (surplus lines, bond and
credit).

      Expense Ratio

      St. Paul Re's reported expense ratio for the nine months ended September
30, 2002 was 28.4%, compared with 27.4% in the same period of 2001. The expense
ratio for the nine months ended September 30, 2001 included a benefit resulting
from a $90 million reduction in contingent commissions that had been accrued
prior to September 11, 2001. The magnitude of losses from the terrorist attack
resulted in the reversal of that accrual. The expense ratio for the nine months
ended September 30, 2002 includes benefits due to rate increases and the exiting
of unprofitable lines of business.

RETROCESSIONAL REINSURANCE

      St. Paul Re's underwriting results for 2002 and 2001 reflect the benefits
of its retrocessional reinsurance program. Under this program, St. Paul Re
purchases reinsurance for its own benefit, to limit the effect on its financial
condition and operating results of large and multiple losses. Under this
program, St. Paul Re ceded the following amounts to reinsurers:


                                      P-12
<PAGE>
<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
Net premiums written...........        $   14     $  128      $   53    $  230
Net premiums earned............            24        122          53       216
Losses and loss adjustment
  expenses.....................           129        244         101       388
Underwriting expenses..........             2          6           6        12
                                       ------     ------      ------    ------
    Net underwriting benefit...        $  107     $  128      $   54    $  184
                                       ======     ======      ======    ======
</TABLE>

      Included in the above totals were the impacts of the St. Paul corporate
aggregate excess-of-loss reinsurance programs that were entered into effective
on January 1 of 1999, 2000 and 2001 and St. Paul Re's aggregate
excess-of-loss-treaty, a separate aggregate excess-of-loss treaty exclusive to
St. Paul Re. St. Paul chose not to have a corporate aggregate excess-of-loss
reinsurance program in place in 2002.

      Coverage under the St. Paul corporate aggregate excess-of-loss reinsurance
programs was triggered when incurred insurance losses and loss adjustment
expenses spanning all segments of St. Paul's business exceeded accident year
attachment loss ratios specified in the treaty. In addition, St. Paul Re's
results benefited from St. Paul Re's aggregate excess-of-loss-treaty in each
year. These treaties are collectively referred to hereafter as the "reinsurance
treaties."

      The following table describes the combined impact of these cessions under
the reinsurance treaties on St. Paul Re's results:

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                          SEPTEMBER 30,        SEPTEMBER 30,
                                          -------------        -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                         ($ IN MILLIONS)      ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
ST. PAUL CORPORATE AGGREGATE
  EXCESS-OF-LOSS REINSURANCE
  PROGRAM
  Ceded premiums written........        $   --     $  --       $  --     $   2
  Ceded losses and loss
    adjustment expenses.........            --        --          --        --
  Ceded premiums earned.........            --        --          --         1
                                        ------    ------      ------    ------
    Net pretax (detriment)......            --        --          --        (1)
                                        ======    ======      ======    ======
ST. PAUL RE'S AGGREGATE
  EXCESS-OF-LOSS TREATIES
  Ceded premiums written........        $   (6)   $   74          (1)      119
  Ceded losses and loss
    adjustment expenses                    (11)      171         (36)      273
  Ceded premiums earned.........            (2)       75          (5)      118
                                        ------    ------      ------    ------
    Net pretax (detriment)
     benefit....................            (9)       96         (31)      155
                                        ======    ======      ======    ======
COMBINED TOTAL
  Ceded premiums written........            (6)       74          (1)      121
  Ceded losses and loss
    adjustment expenses.........           (11)      171         (36)      273
  Ceded premiums earned.........            (2)       75          (5)      119
                                        ------    ------      ------    ------
    Net pretax (detriment)
     benefit....................        $   (9)   $   96      $  (31)   $  154
                                        ======    ======      ======    ======
</TABLE>


                                      P-13
<PAGE>
      Net underwriting detriment in the three-month period ended September 30,
2002 was driven by a commutation of a certain portion of the St. Paul Re
aggregate excess-of-loss treaty. The commutation of this treaty resulted in a
net loss of $6 million. This was done in conjunction with the commutation of
similar assumed reinsurance treaties which resulted in a net gain of $4 million.
The combined effect of these commutations resulted in a net loss of $2 million.

      Net underwriting detriment in the nine-month period ended September 30,
2002 was driven by a commutation of a certain portion of the St. Paul Re
aggregate excess-of-loss treaty. The commutation of this treaty resulted in a
net loss of $20 million. This was done in conjunction with the commutation of
similar assumed reinsurance treaties which resulted in a net gain of $14
million. The combined effect of these commutations resulted in a net loss of $6
million.

      The combined net pretax benefit (detriment) of the reinsurance treaties
was allocated to St. Paul Re's business segments as follows:

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
North American Casualty........        $   (4)    $   42      $  (10)   $   46
North American Property........            (3)        19          (6)       54
International..................            (1)        21          (5)       37
Finite Risk....................            (1)        14         (10)       17
                                       ------     ------      ------    ------
Total..........................        $   (9)    $   96      $  (31)   $  154
                                       ======     ======      ======    ======
</TABLE>

SEPTEMBER 11, 2001 TERRORIST ATTACK

      On September 11, 2001, terrorists hijacked four commercial passenger jets
in the United States. Two of the jets were flown into the World Trade Center
towers in New York causing their collapse. The third jet was flown into the
Pentagon building in Washington, D.C., causing severe damage, and the fourth jet
crashed in rural Pennsylvania. This terrorist attack caused significant loss of
life and resulted in unprecedented losses for the property and casualty
insurance industry. St. Paul Re's estimated net pretax loss incurred as a result
of the terrorist attack totaled $500 million for the nine months ended September
30, 2001.

      In the fourth quarter of 2001, St. Paul Re recorded an additional loss
provision of $56 million to bring the estimated loss to $556 million.

      St. Paul Re continually evaluated the adequacy of the net loss provision
recorded, based on claim experience, collections from its reinsurers, and other
factors. In the first nine months of 2002, St. Paul Re recorded an additional
$21 million to its estimated loss provision recorded in 2001 for the terrorist
attack, distributed among business segments as follows:

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED     NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                        2002       2001       2002       2001
                                        ----       ----       ----       ----
                                        ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                    <C>        <C>        <C>        <C>
North American Casualty........        $    2     $   35      $    2    $   35
North American Property........            17        205          17       205
International..................            10        150          10       150
Finite Risk....................            (8)       110          (8)      110
                                       ------     ------      ------    ------
Total..........................        $   21     $  500      $   21    $  500
                                       ======     ======      ======    ======
</TABLE>


                                      P-14
<PAGE>
Through September 30, 2002, St. Paul Re had made net loss payments totaling $153
million related to the attack since it occurred, of which $150 million were made
in the first nine months of 2002.

UNDERWRITING RESULTS BY SEGMENT

      The following table summarizes written premiums, underwriting results,
statutory combined ratios and adjusted combined ratios (as described in the
footnote to the table) for each of St. Paul Re's business segments for the three
months ended September 30, 2002 and 2001 and the nine months ended September 30,
2002 and 2001. These segments are managed in a carefully coordinated fashion
with strong elements of centralized control. As a result, management monitors
and evaluates the financial performance of these segments principally based on
their underwriting results. Following the table are detailed analyses of each
segment's results.

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED            NINE MONTHS ENDED
                                     SEPTEMBER 30,                 SEPTEMBER 30,
                                     -------------                 -------------
                                  2002           2001           2002           2001
                                  ----           ----           ----           ----
                                    ($ IN MILLIONS)               ($ IN MILLIONS)
<S>                             <C>            <C>            <C>            <C>
NORTH AMERICAN CASUALTY
Net premiums written .....      $    97        $   219        $   325        $   515
Net premiums earned ......          125            147            396            408
Losses and loss adjustment
  expenses ...............          129            110            359            384
Underwriting expenses ....           42             72            133            168
                                -------        -------        -------        -------
Underwriting loss ........      $   (46)       $   (35)       $   (96)       $  (144)
                                -------        -------        -------        -------
Combined ratio ...........        136.9%         118.5%         123.9%         133.6%
Adjusted combined ratio* .        131.8%         122.0%         120.5%         134.0%

NORTH AMERICAN PROPERTY
Net premiums written .....      $    59        $    74        $   169        $   149
Net premiums earned ......           63             63            188            138
Losses and loss adjustment
  expenses ...............           28            262            102            298
Underwriting expenses ....           17             17             52             50
                                -------        -------        -------        -------
Underwriting gain (loss) .      $    18        $  (216)       $    34        $  (210)
                                -------        -------        -------        -------
Combined ratio ...........         69.5%         442.9%          81.8%         251.4%
Adjusted combined ratio* .         35.5%         146.3%          68.9%         134.5%

INTERNATIONAL
Net premiums written .....      $    28        $    13        $   202        $   187
Net premiums earned ......           64             41            184            149
Losses and loss adjustment
  expenses ...............           55            173            107            198
Underwriting expenses ....           13             16             41             46
                                -------        -------        -------        -------
Underwriting (loss) gain .      $    (4)       $  (148)       $    36        $   (95)
                                -------        -------        -------        -------
Combined ratio ...........        117.4%         509.7%          79.4%         159.9%
Adjusted combined ratio* .        103.2%         145.7%          70.6%          87.1%

FINITE RISK
Net premiums written .....      $    50        $   189        $   201        $   345
Net premiums earned ......           55            194            221            350
Losses and loss adjustment
  expenses ...............           37            359            141            450
Underwriting expenses ....            7            (51)            66             20
                                -------        -------        -------        -------
Underwriting gain (loss) .      $    11        $  (114)       $    14        $  (120)
                                -------        -------        -------        -------
Combined ratio ...........         75.9%         156.6%          92.3%         134.8%
Adjusted combined ratio* .         90.4%         113.4%          91.5%         110.6%
</TABLE>


                                      P-15
<PAGE>
<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED            NINE MONTHS ENDED
                                     SEPTEMBER 30,                 SEPTEMBER 30,
                                     -------------                 -------------
                                  2002           2001           2002           2001
                                  ----           ----           ----           ----
                                    ($ IN MILLIONS)               ($ IN MILLIONS)
<S>                             <C>            <C>            <C>            <C>
TOTAL
Net premiums written .....      $   234        $   495        $   897        $ 1,196
Net premiums earned ......          307            445            989          1,045
Losses and loss adjustment
  expenses ...............          249            904            709          1,330
Underwriting expenses ....           79             54            292            284
                                -------        -------        -------        -------
Underwriting loss ........      $   (21)       $  (513)       $   (12)       $  (569)
                                -------        -------        -------        -------
Loss and loss adjustment
  expense ratio ..........         81.1%         203.3%          71.7%         127.3%
Underwriting expense ratio         26.1%          14.6%          28.4%          27.4%
                                -------        -------        -------        -------
Combined ratio ...........        107.2%         217.9%         100.1%         154.7%
                                =======        =======        =======        =======
Adjusted combined ratio* .         97.6%         126.2%          94.6%         120.2%
Impact of catastrophes on
  combined ratio .........         15.6%         133.6%           3.8%          57.6%
</TABLE>

*  For purposes of meaningful comparison, adjusted combined ratios in all
   periods presented exclude the impact of the reinsurance treaties described
   before the table and the September 11, 2001 terrorist attack.

      The following provides a more detailed discussion of results for the
three-month and nine-month periods ended September 30, 2002 and 2001 produced by
St. Paul Re's four business segments. To provide a more meaningful analysis of
the underlying performance of St. Paul Re's business segments, the discussion of
segment results excludes the impact of the September 11, 2001 terrorist attack
and the reinsurance treaties. The impact of the terrorist attack on individual
segment results and the impact of the reinsurance treaties were discussed
earlier.

NORTH AMERICAN CASUALTY

      The North American Casualty segment consisted of casualty reinsurance
underwritten for customers with exposures in the United States and Canada. In
2001, the following types of casualty coverages were offered: general, workers'
compensation, auto, medical professional, non-medical professional, directors
and officers, employment practices, surplus lines, umbrella and environmental
impairment. This segment also included accident and health reinsurance
coverages. As discussed earlier, in 2002, St. Paul narrowed its reinsurance
product focus in an effort to improve profitability. As a result, the North
American Casualty segment offered the following coverages in the first nine
months of 2002: general and automobile liability, professional liability,
workers' compensation, accident and health coverages and casualty clash. The
following table summarizes results for this segment for the periods presented,
and excludes the impact of the reinsurance treaties and the September 11, 2001
terrorist attack:

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED     NINE MONTHS ENDED
                                         SEPTEMBER 30,         SEPTEMBER 30,
                                         -------------         -------------
                                       2002        2001      2002       2001
                                       ----        ----      ----       ----
                                       ($ IN MILLIONS)       ($ IN MILLIONS)
<S>                                   <C>          <C>       <C>       <C>

Net premiums written..........        $   96      $ 261     $  329     $  557
Percentage decrease over
  prior year..................           (63)%                 (41)%
Underwriting loss.............        $  (41)     $ (44)    $  (85)    $ (157)
Loss and loss adjustment
  expense ratio...............          98.2%      85.7%      87.8%      97.6%
Underwriting expense ratio....          33.6%      36.4%      32.7%      36.4%
                                      ------      -----     ------     ------
Combined ratio................         131.8%     122.0%     120.5%     134.0%
                                      ======      =====     ======     ======
</TABLE>


                                      P-16
<PAGE>
      THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. THREE MONTHS ENDED SEPTEMBER 30,
      2001

      Net written premium declined 63.2% to $96 million for the three months
ended September 30, 2002 from $261 million for the three months ended September
30, 2001. The premium volume was impacted by a decline in premiums resulting
from lines of business being exited.

      The $3 million reduction in underwriting losses compared with the three
months ended September 30, 2001 is attributable to improved rates and risk
selection.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. NINE MONTHS ENDED SEPTEMBER 30,
      2001

      The $228 million decrease in net premiums written was primarily due to the
rescission of a large quota share contract in the second quarter of 2002. The
premium volume was also impacted by a decline in premiums resulting from lines
of business being exited. Rate increases averaged 32% in the first nine months
of 2002, and new business written in the accident and health reinsurance market
served to partially offset the decline in premiums.

      The $72 million reduction in underwriting losses compared with the nine
months ended September 30, 2001 is attributable to improved rates and risk
selection, as well as less unfavorable development in casualty business written
in prior years.

NORTH AMERICAN PROPERTY

      The North American Property segment consisted of property reinsurance
business underwritten for customers with exposures in the United States and
Canada. In 2001, coverages offered included proportional, per-risk,
excess-of-loss reinsurance and excess and surplus lines insurance, and
catastrophe treaties. This segment also included the results of retrocessional
reinsurance business, and crop and agricultural reinsurance. As discussed
earlier, in 2002, St. Paul narrowed its reinsurance product focus in an effort
to improve profitability. As a result, the North American Property segment
offered the following coverage in the first nine months of 2002: property
catastrophe, property pro rata and property risk excess-of-loss. The following
table summarizes results for this segment for the periods presented, and
excludes the impact of the reinsurance treaties and the September 11, 2001
terrorist attack:

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED         NINE MONTHS ENDED
                                        SEPTEMBER 30,              SEPTEMBER 30,
                                        -------------              -------------
                                     2002          2001         2002          2001
                                     ----          ----         ----          ----
                                      ($ IN MILLIONS)            ($ IN MILLIONS)
<S>                                 <C>          <C>           <C>          <C>
Net premiums written .........      $   57       $   74        $  167       $  181
Percentage decrease over
   prior year ................         (23)%                       (8)%
Underwriting gain (loss) .....      $   39       $  (30)       $   58       $  (59)
Loss and loss adjustment
  expense ratio ..............         8.6%       119.9%         40.8%       105.1%
Underwriting expense ratio ...        26.9%        26.4%         28.1%        29.4%
                                    ------       ------        ------       ------
Combined ratio ...............        35.5%       146.3%         68.9%       134.5%
                                    ======       ======        ======       ======
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. THREE MONTHS ENDED SEPTEMBER 30,
      2001

      The $17 million decrease in net premiums written was due to a decline in
business volume resulting from lines of business being exited, offset by rate
increases on the 2002 renewals.

      The $69 million improvement in the underwriting result is due to a decline
in catastrophe activity over the prior year, the exiting of unprofitable lines
of business and the impact of rate increases on the 2002 renewals.


                                      P-17
<PAGE>
      NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. NINE MONTHS ENDED SEPTEMBER 30,
      2001

      The $14 million decrease in net premiums written was due to a decline in
business volume resulting from St. Paul Re's withdrawal from or reduction in
several lines of business in this segment, offset by rate increases that
averaged 32% in the first nine months of 2002.

      The improvement in underwriting results in 2002 reflected the impact of
exiting unprofitable lines of business, rate increases, a lack of significant
catastrophe losses and favorable development on prior year catastrophe losses.

INTERNATIONAL

      In 2001, St. Paul Re's International segment underwrote property and
casualty reinsurance for customers domiciled outside of North America. This
segment also included results from marine and aerospace business for customers
located throughout the world, because of the global nature of those exposures.
As discussed earlier, in 2002, St. Paul narrowed its reinsurance product focus
in an effort to improve profitability. As a result, the International segment
offered the following coverages in the first nine months of 2002: property
catastrophe, property pro rata, property risk excess-of-loss and marine
coverages. The following table summarizes results for this segment for the
periods presented, and excludes the impact of the reinsurance treaties and the
September 11, 2001 terrorist attack.

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED          NINE MONTHS ENDED
                                        SEPTEMBER 30,               SEPTEMBER 30,
                                        -------------               -------------
                                     2002          2001          2002          2001
                                     ----          ----          ----          ----
                                      ($ IN MILLIONS)             ($ IN MILLIONS)
<S>                                 <C>           <C>           <C>          <C>
Net premiums written .........      $   24        $   28        $  200       $  212
Percentage decrease over
   prior year ................         (14)%                        (6)%
Underwriting gain (loss) .....      $    7        $  (19)       $   51       $   18
Loss and loss adjustment
  expense ratio ..............        68.8%        104.8%         49.4%        63.0%
Underwriting expense ratio ...        34.4%         40.9%         21.2%        24.1%
                                    ------        ------        ------       ------
Combined ratio ...............       103.2%        145.7%         70.6%        87.1%
                                    ------        ------        ------       ------
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. THREE MONTHS ENDED SEPTEMBER 30,
      2001

      Net written premium declined 14.3% to $24 million for the three months
ended September 30, 2002 from $28 million for the three months ended September
30, 2001. The premium volume was impacted by a decline in premiums resulting
from lines of business being exited.

      The $26 million improvement in the underwriting result is due to a decline
in catastrophe activity over the prior year, the exiting of unprofitable lines
of business and the impact of rate increases on the 2002 renewals.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. NINE MONTHS ENDED SEPTEMBER 30,
      2001

      The $12 million decrease in net premiums written in 2002 was due to St.
Paul Re's decision to exit the aviation market and close certain international
offices. Rate increases averaging 39% in the International segment partially
offset these declines.

      The $33 million increase in underwriting gain was mainly attributable to
favorable development on prior year reserves across all lines. Also contributing
to the increase in underwriting gain is the absence of catastrophe losses in the
period and significant rate increases achieved in 2002.


                                      P-18
<PAGE>
FINITE RISK

      In 2001, St. Paul Re's Finite Risk segment underwrote non-traditional
reinsurance treaties for leading insurance and reinsurance companies worldwide.
Non-traditional reinsurance combines limited traditional underwriting risk with
financial risk protection and is generally utilized by sophisticated insurers
who are willing to share in a portion of their insurance losses. Products
include multi-year excess-of-loss treaties, aggregate stop loss treaties, finite
quota share treaties, loss portfolio transfers, and adverse loss development
covers. This segment also included bond and credit reinsurance coverages. As
discussed earlier, in 2002, St. Paul narrowed its reinsurance product focus in
an effort to improve profitability. As a result, the Finite Risk segment offered
the following coverages in the first nine months of 2002: multi-year
excess-of-loss, aggregate stop loss, finite quota share, loss portfolio transfer
and adverse loss development contracts. The following table summarizes results
for this segment for the periods presented, and excludes the impact of the
reinsurance treaties and the September 11, 2001 terrorist attack:

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED         NINE MONTHS ENDED
                                        SEPTEMBER 30,             SEPTEMBER 30,
                                        -------------             -------------
                                      2002        2001          2002         2001
                                      ----        ----          ----         ----
                                       ($ IN MILLIONS)          ($ IN MILLIONS)
<S>                                 <C>          <C>           <C>          <C>
Net premiums written .........      $   57       $  115        $  206       $  276
Percentage decrease over
  prior year .................         (50)%                      (25)%
Underwriting gain (loss) .....      $    6       $  (17)       $   17       $  (27)
Loss and loss adjustment
  expense ratio ..............        80.9%        80.9%         63.5%        70.2%
Underwriting expense ratio ...         9.5%        32.5%         28.0%        40.5%
                                    ------       ------        ------       ------
Combined ratio ...............        90.4%       113.4%         91.5%       110.6%
                                    ======       ======        ======       ======
</TABLE>

      THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. THREE MONTHS ENDED SEPTEMBER 30,
      2001

      Net written premium declined 50.4% to $57 million for the three months
ended September 30, 2002 from $115 million for the three months ended September
30, 2001. The premium volume was impacted by a decline in premiums resulting
from lines of business being exited.

      The $23 million improvement in the underwriting result is due to a decline
in catastrophe activity over the prior year, the exiting of unprofitable lines
of business and the impact of rate increases on the 2002 renewals.

      NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. NINE MONTHS ENDED SEPTEMBER 30,
      2001

      The $70 million decrease in net premiums written in the first nine months
of 2002 was due to St. Paul Re's decision to exit the bond and credit market;
however, that decline was offset by a $25 million positive premium adjustment
related to one finite quota share contract.

      The $17 million underwriting gain in the first nine months of 2002
included a $14 million favorable impact due to the commutation of reinsurance
treaties, offset by adverse prior-year marine and aviation loss development, as
well as adverse loss experience on the bond and credit business in runoff.

LIQUIDITY AND CAPITAL RESOURCES

      St. Paul Re's primary sources of liquidity and capital resources were
premium revenues received from its reinsurance business, and capital
contributions, when necessary, from St. Paul. As a component of St. Paul's
consolidated operations, St. Paul Re was dependent upon St. Paul to provide the
necessary capital to adequately support the level of its business operations.


                                      P-19
<PAGE>
EXPOSURES TO MARKET RISK

      Market risk can be described as the risk of change in fair value of a
financial instrument due to changes in interest rates, equity prices,
creditworthiness, foreign exchange rates or other factors. As a component of St.
Paul's consolidated operations with no invested assets of its own, St. Paul Re
had no direct exposure to these various types of market risk, except for the
potential impact of changes in foreign currency exchange rates on its insurance
reserves. St. Paul actively managed its exposure to such foreign currency risks
by purchasing investments denominated in foreign currencies to hedge insurance
reserves denominated in the same currencies, which effectively reduced its
foreign currency exchange rate exposure.


                                      P-20
<PAGE>
                                   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.


Date:  December 11, 2002

                                 PLATINUM UNDERWRITERS HOLDINGS, LTD.
                                 (Registrant)



                                 By:  /s/  William A. Robbie
                                    ---------------------------------------
                                           William A. Robbie
                                           Executive Vice President,
                                           Chief Financial Officer and Treasurer
                                           (Principal Financial Officer)
<PAGE>
                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jerome T. Fadden, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Platinum
            Underwriters Holdings, Ltd. (the "Registrant");

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the Registrant as of, and for, the periods presented
            in this quarterly report;

      4.    The Registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant
            and we have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the Registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b.    evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c.    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The Registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation, to the Registrant's auditors
            and the audit committee of Registrant's board of directors (or
            persons performing the equivalent function):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal controls; and

      6.    The Registrant's other certifying officer and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


Date:  December 11, 2002




/s/  Jerome T. Fadden
------------------------------------
     Jerome T. Fadden
     President and Chief Executive Officer
<PAGE>
                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, William A. Robbie, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Platinum
            Underwriters Holdings, Ltd. (the "Registrant");

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the Registrant as of, and for, the periods presented
            in this quarterly report;

      4.    The Registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant
            and we have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the Registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b.    evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c.    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The Registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation, to the Registrant's auditors
            and the audit committee of Registrant's board of directors (or
            persons performing the equivalent function):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal controls; and

      6.    The Registrant's other certifying officer and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


Date:  December 11, 2002




/s/  William A. Robbie
------------------------------------
     William A. Robbie
     Executive Vice President,
     Chief Financial Officer and Treasurer
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
  Exhibit
   Number     Description
   ------     -----------
<S>           <C>
    99.1      Certification Pursuant to 18 U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

    99.2      Certification Pursuant to 18 U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>