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UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended December 31, 2005                                                 
|  
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                             

Commission File Number 001-31341


Platinum Underwriters Holdings, Ltd.


(Exact name of registrant as specified in its charter)


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

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

Registrants telephone number, including area code:


(441) 295-7195


Securities registered pursuant to Section 12(b) of the
Act:


|                                                                                                                                                                          |  |                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------
|Title of each class                                                                                                                                                       |  | Name of each exchange on which registered          
|                                                                                                                                                                          |  |                                                    
|Common Shares, par value $0.01 per share 6.00%
    Series A Mandatory Convertible Preferred Shares par value
    $0.01 per share, liquidation preference $30.15 per share |  | New York Stock Exchange
    New York Stock Exchange

Securities registered pursuant to Section 12(g) of the
Act:


None


þ o


o þ


þ o


S-K 10-K 10-K. o þ




þ o o


12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE












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TABLE OF CONTENTS


|                                                                                        |  |                                                                                                                      |     |      |    | 
|--------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- | --- | ---- | -- | 
|                                                                                        |  |                                                                                                                      |     | Page
|                                                                                        |  |                                                                                                                      |     |     
|PART I                                                                                 
|Item 1.                                                                                 |  | Business                                                                                                             |     |      | 2  | 
|Item 1A.                                                                                |  | Risk Factors                                                                                                         |     |      | 30 | 
|Item 1B.                                                                                |  | Unresolved Staff Comments                                                                                            |     |      | 40 | 
|Item 2.                                                                                 |  | Properties                                                                                                           |     |      | 40 | 
|Item 3.                                                                                 |  | Legal Proceedings                                                                                                    |     |      | 40 | 
|Item 4.                                                                                 |  | Submission of Matters to a Vote of Security
    Holders                                                              |     |      | 40 | 
|                                                                                       
|PART II                                                                                
|Item 5.                                                                                 |  | Market For Registrants Common Equity,
    Related Shareholder Matters and Issuer Purchases of Equity
    Securities |     |      | 41 | 
|Item 6.                                                                                 |  | Selected Financial Data                                                                                              |     |      | 43 | 
|Item 7.                                                                                 |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |     |      | 44 | 
|Item 7A.                                                                                |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                       |     |      | 70 | 
|Item 8.                                                                                 |  | Financial Statements and Supplementary
    Data                                                                      |     |      | 71 | 
|Item 9.                                                                                 |  | Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure                             |     |      | 72 | 
|Item 9A.                                                                                |  | Controls and Procedures                                                                                              |     |      | 72 | 
|Item 9B.                                                                                |  | Other Information                                                                                                    |     |      | 74 | 
|                                                                                       
|PART III                                                                               
|Item 10.                                                                                |  | Directors and Executive Officers of the
    Registrant                                                               |     |      | 74 | 
|Item 11.                                                                                |  | Executive Compensation                                                                                               |     |      | 74 | 
|Item 12.                                                                                |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Shareholder Matters                   |     |      | 74 | 
|Item 13.                                                                                |  | Certain Relationships and Related
    Transactions                                                                   |     |      | 74 | 
|Item 14.                                                                                |  | Principal Accountant Fees and Services                                                                               |     |      | 74 | 
|                                                                                       
|PART IV                                                                                
|Item 15.                                                                                |  | Exhibits and Financial Statement
    Schedules                                                                       |     |      | 75 | 
|Signatures                                                                              |  |                                                                                                                      | 81  |     
|Platinum Underwriters Holdings, Ltd. and
    Subsidiaries Financial Statements          |  |                                                                                                                      | F-1 |     
|Platinum Underwriters Holdings, Ltd. and
    Subsidiaries Financial Statement Schedules |  |                                                                                                                      | S-1 |     
|Exhibits                                                                                |  |                                                                                                                      |     |     
|EX-10.2: SUMMARY OF DIRECTOR COMPENSATION                                              
|EX-10.59: EXCESS OF LOSS RETROCESSION AGREEMENT                                        
|EX-21.1: SUBSIDIARIES OF PLATINUM HOLDINGS                                             
|EX-23.1: INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT                       
|EX-31.1: CERTIFICATION                                                                 
|EX-31.2: CERTIFICATION                                                                 
|EX-32.1: CERTIFICATION                                                                 
|EX-32.2: CERTIFICATION                                                                 



i



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PART I




Note On Forward-Looking Statements


10-K


10-K


10-K




| |                                                                    
| | -------------------------------------------------------------------
| | (1) conducting operations in a competitive environment;            
|
| | (2) our ability to maintain our A.M. Best Company, Inc.
    rating;





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| |                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) significant weather-related or other natural or
    man-made disasters over which the Company has no control;                                                                                                                                                                                                                                           
|
| | (4) the effectiveness of our loss limitation methods and
    pricing models;                                                                                                                                                                                                                                                                                
|
| | (5) the adequacy of the Companys liability for unpaid
    losses and loss adjustment expenses, including, but not limited
    to, losses from Hurricanes Katrina, Rita and Wilma and the
    possibility that estimates of losses and LAE from Hurricanes
    Katrina, Rita and Wilma may prove to be materially different
    from estimates made to date;
|
| | (6) the availability of retrocessional reinsurance on
    acceptable terms;                                                                                                                                                                                                                                                                                 
|
| | (7) our ability to maintain our business relationships with
    reinsurance brokers;                                                                                                                                                                                                                                                                        
|
| | (8) general political and economic conditions, including
    the effects of civil unrest, acts of terrorism, war or a
    prolonged U.S. or global economic downturn or recession;                                                                                                                                                                          
|
| | (9) the cyclicality of the property and casualty
    reinsurance business;                                                                                                                                                                                                                                                                                  
|
| | (10) market volatility and interest rate and currency
    exchange rate fluctuation;                                                                                                                                                                                                                                                                        
|
| | (11) tax, regulatory or legal restrictions or limitations
    applicable to the Company or the property and casualty
    reinsurance business generally; and                                                                                                                                                                                                
|
| | (12) changes in the Companys plans, strategies,
    objectives, expectations or intentions, which may happen at any
    time at the Companys discretion.                                                                                                                                                                                                  








|        |         
|------- | --------
|Item 1. | Business

Industry Overview


General




Types of Reinsurance




2



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| |                                  
| | ---------------------------------
| | Property and Casualty Reinsurance









| |                             
| | ----------------------------
| | Life and Annuity Reinsurance





| |                                                
| | -----------------------------------------------
| | Excess-of-Loss
    and Proportional Reinsurance

excess-of excess-of excess-of excess-of excess-of


excess-of excess-of


excess-of




| |                                   
| | ----------------------------------
| | Treaty and Facultative Reinsurance



3



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| |                   
| | ------------------
| | Finite Reinsurance





| |                              
| | -----------------------------
| | Broker and Direct Reinsurance



excess-of




| |             
| | ------------
| | Retrocession



Our Business


General




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Our Strategy






| |   |                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Operate as a multi-class reinsurer. We seek to offer a
    broad range of reinsurance coverage to our ceding companies. We
    believe that this approach enables us to more effectively serve
    our clients, diversify our risk and leverage our capital.

5



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Focus on profitability, not market share. Our management
    team pursues a strategy that emphasizes profitability rather
    than market share. Key elements of this strategy are prudent
    risk selection, appropriate pricing and adjustment of our
    business mix to respond to changing market conditions.                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Exercise disciplined underwriting and risk management. We
    exercise underwriting and risk management discipline by
    (i) maintaining a diverse spread of risk in our book of
    business across product lines and geographic zones,
    (ii) emphasizing
    excess-of-loss
    contracts over proportional contracts, (iii) managing our
    aggregate catastrophe exposure through the application of
    sophisticated property catastrophe modeling tools and
    (iv) monitoring our accumulating exposures on non-property
    catastrophe exposed coverages.                                                                                                                                                              
|
| |  | Operate from a position of financial strength. As of
    December 31, 2005, we had a total capitalization of
    $1,790,249,000. Our capital position is unencumbered by any
    potential adverse development of unpaid losses for business
    written prior to January 1, 2002. Our investment strategy
    focuses on security and stability in our investment portfolio by
    maintaining a portfolio that consists of diversified, high
    quality, predominantly publicly traded fixed maturity
    securities. We believe these factors, combined with our strict
    underwriting discipline, allow us to maintain our strong
    financial position and to be opportunistic when market
    conditions are most attractive.

Operating Segments




|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |    |     |  
|------------------- | -------------- | ------------------------- | - | --------- | --------- |  |  | ---- | --- | - | - | --------- | --------- |  |  | -- | --- | - | - | ------- | --------- |  |  | -- | --- | -
|                    |                | Years Ended December 31,  |  
|                    |                |                           |  
|                    |                | 2005                      |   |           | 2004      |  |  | 2003 |    
|                    |                |                           |   |           |           |  |  |      |    
|Property and Marine |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | Excess-of-loss |                           | $ | 412,781   |           |  |  | 24   | %   |   | $ | 366,184   |           |  |  | 22 | %   |   | $ | 224,715 |           |  |  | 19 | %  
|                    | Proportional   |                           |   | 162,274   |           |  |  | 9    | %   |   |   | 138,255   |           |  |  | 8  | %   |   |   | 128,193 |           |  |  | 11 | %  
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |                | Total Property and Marine |   |           | 575,055   |  |  |      | 33  | % |   |           | 504,439   |  |  |    | 30  | % |   |         | 352,908   |  |  |    | 30  | %
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Casualty            |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | Excess-of-loss |                           |   | 676,276   |           |  |  | 39   | %   |   |   | 593,752   |           |  |  | 37 | %   |   |   | 389,992 |           |  |  | 33 | %  
|                    | Proportional   |                           |   | 132,755   |           |  |  | 8    | %   |   |   | 83,647    |           |  |  | 5  | %   |   |   | 84,008  |           |  |  | 7  | %  
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |                | Total Casualty            |   |           | 809,031   |  |  |      | 47  | % |   |           | 677,399   |  |  |    | 42  | % |   |         | 474,000   |  |  |    | 40  | %
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Finite Risk         |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | Excess-of-loss |                           |   | 63,628    |           |  |  | 4    | %   |   |   | 155,090   |           |  |  | 9  | %   |   |   | 250,634 |           |  |  | 22 | %  
|                    | Proportional   |                           |   | 270,008   |           |  |  | 16   | %   |   |   | 309,085   |           |  |  | 19 | %   |   |   | 94,600  |           |  |  | 8  | %  
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |                | Total Finite Risk         |   |           | 333,636   |  |  |      | 20  | % |   |           | 464,175   |  |  |    | 28  | % |   |         | 345,234   |  |  |    | 30  | %
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Total               |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | Excess-of-loss |                           |   | 1,152,685 |           |  |  | 67   | %   |   |   | 1,115,026 |           |  |  | 68 | %   |   |   | 865,341 |           |  |  | 74 | %  
|                    | Proportional   |                           |   | 565,037   |           |  |  | 33   | %   |   |   | 530,987   |           |  |  | 32 | %   |   |   | 306,801 |           |  |  | 26 | %  
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |                | Total                     |   | $         | 1,717,722 |  |  |      | 100 | % |   | $         | 1,646,013 |  |  |    | 100 | % |   | $       | 1,172,142 |  |  |    | 100 | %
|                    |                |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  

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|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |    |     |  
|------------------- | ------------- | ------------------------- | - | --------- | --------- |  |  | ---- | --- | - | - | --------- | --------- |  |  | -- | --- | - | - | ------- | --------- |  |  | -- | --- | -
|                    |               | Years Ended December 31,  |  
|                    |               |                           |  
|                    |               | 2005                      |   |           | 2004      |  |  | 2003 |    
|                    |               |                           |   |           |           |  |  |      |    
|Property and Marine |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | United States |                           | $ | 401,270   |           |  |  | 23   | %   |   | $ | 320,506   |           |  |  | 19 | %   |   | $ | 211,324 |           |  |  | 18 | %  
|                    | International |                           |   | 173,785   |           |  |  | 10   | %   |   |   | 183,933   |           |  |  | 11 | %   |   |   | 141,584 |           |  |  | 12 | %  
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |               | Total Property and Marine |   |           | 575,055   |  |  |      | 33  | % |   |           | 504,439   |  |  |    | 30  | % |   |         | 352,908   |  |  |    | 30  | %
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Casualty            |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | United States |                           |   | 718,103   |           |  |  | 43   | %   |   |   | 601,878   |           |  |  | 37 | %   |   |   | 436,789 |           |  |  | 37 | %  
|                    | International |                           |   | 90,928    |           |  |  | 5    | %   |   |   | 75,521    |           |  |  | 5  | %   |   |   | 37,211  |           |  |  | 3  | %  
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |               | Total Casualty            |   |           | 809,031   |  |  |      | 48  | % |   |           | 677,399   |  |  |    | 42  | % |   |         | 474,000   |  |  |    | 40  | %
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Finite Risk         |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | United States |                           |   | 329,843   |           |  |  | 19   | %   |   |   | 428,024   |           |  |  | 26 | %   |   |   | 264,473 |           |  |  | 23 | %  
|                    | International |                           |   | 3,793     |           |  |  | 0    | %   |   |   | 36,151    |           |  |  | 2  | %   |   |   | 80,761  |           |  |  | 7  | %  
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |               | Total Finite Risk         |   |           | 333,636   |  |  |      | 19  | % |   |           | 464,175   |  |  |    | 28  | % |   |         | 345,234   |  |  |    | 30  | %
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|Total               |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |   |   |         |           |  |  |   
|                    | United States |                           |   | 1,449,216 |           |  |  | 85   | %   |   |   | 1,350,408 |           |  |  | 82 | %   |   |   | 912,586 |           |  |  | 78 | %  
|                    | International |                           |   | 268,506   |           |  |  | 15   | %   |   |   | 295,605   |           |  |  | 18 | %   |   |   | 259,556 |           |  |  | 22 | %  
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  
|                    |               | Total                     |   | $         | 1,717,722 |  |  |      | 100 | % |   | $         | 1,646,013 |  |  |    | 100 | % |   | $       | 1,172,142 |  |  |    | 100 | %
|                    |               |                           |   |           |           |  |  |      |     |   |   |           |           |  |  |    |     |  

Property and Marine


excess-of excess-of




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Property. We provide reinsurance coverage for damage to
    property and crops. Our catastrophe
    excess-of-loss
    reinsurance contracts provide a defined limit of liability,
    permitting us to quantify our aggregate maximum loss exposure
    for various catastrophe events. Quantification of loss exposure
    is fundamental to our ability to manage our loss exposure
    through geographical zone limits and program limits. In
    addition, when our pricing standards are met, we write other
    property coverages, including per-risk
    excess-of-loss or
    proportional treaties. We have also entered into an agreement
    with an underwriting manager to underwrite property facultative
    and program reinsurance risks.
|
| |  | Marine. We provide reinsurance coverage for marine and
    offshore energy insurance programs. Coverages reinsured include
    hull damage, protection and indemnity, cargo damage, satellite
    damage and general marine liability. Within Marine, we also
    write commercial and general aviation reinsurance. Marine
    reinsurance treaties include
    excess-of-loss as well
    as proportional treaties. We emphasize
    excess-of-loss treaties
    that allow our evaluation using experience and exposure pricing
    models.                                                                                                                                                                                                               

Casualty




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excess-of excess-of






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Umbrella Liability. An umbrella policy is an excess
    insurance policy that provides coverage, typically for general
    liability or automobile liability, when claims, individually or
    in the aggregate, exceed the limit of the original policy
    underlying the excess policy. A claim must exceed the limit of
    some underlying policy for the claim to be considered under an
    umbrella policy. We primarily reinsure commercial umbrella
    liability policies.                                                                                                             
|
| |  | General and Product Liability. We provide reinsurance of
    third party liability coverages for commercial and personal
    insureds. We provide, predominantly on an
    excess-of-loss basis,
    various coverages of both small and large companies, including
    commercial, farmowners and homeowners policies as well as third
    party liability coverages such as product liability.                                                                                                                                                                                                  
|
| |  | Professional Liability. We write reinsurance treaties for
    professional liability programs, including directors and
    officers, employment practices, and errors and omissions for
    professionals such as lawyers, medical professionals,
    architects, engineers and other professionals. In most
    circumstances, the underlying insurance products for these lines
    of business are written on a claims made basis, which requires
    claims related to the liabilities insured under the policy to be
    submitted to the insurer during a specified coverage period.        
|
| |  | Accident and Health. We provide accident and health
    reinsurance, often in the form of quota share reinsurance of a
    ceding company writing aggregate and per-person stop loss
    coverage of self-insured employer medical plans. We also write
    reinsurance of first dollar health insurance, student health
    insurance, Medicare and Medicare supplement, and other forms of
    accident and health insurance.                                                                                                                                                                   
|
| |  | Workers Compensation. We reinsure workers
    compensation on a catastrophic basis as well as on a
    per-claimant basis. We may provide full statutory coverage or
    coverage that is subject to specific carve-outs. Our predominant
    exposure to workers compensation would generally arise
    from a single occurrence, such as a factory explosion or
    earthquake, involving more than one claimant.                                                                                                                                                                            
|
| |  | Casualty Clash. Casualty clash reinsurance responds to
    claims arising from a single set of circumstances covered by
    more than one insurance policy or multiple claimants on one
    policy. This type of reinsurance is analogous to property
    catastrophe reinsurance, but written for casualty lines of
    business. Our casualty clash treaties are generally
    excess-of-loss
    contracts with both occurrence limits and aggregate limits.                                                                                                                                   
|
| |  | Automobile Liability. Automobile insurance policies
    provide first party coverage for damage to the insureds
    vehicle and third party coverage for the insureds
    liability to other parties for injuries and for damage to their
    property due to the use of the insured vehicle. These insurance
    policies may also provide coverage for uninsured motorists and
    medical payments. We generally reinsure automobile liability on
    an excess-of-loss
    basis. Our predominant exposure arises from third party
    liability claims and the related legal defense costs.
|
| |  | Surety. Our surety business relates to the reinsurance of
    risks associated with commercial and contract surety bonds
    issued to third parties to guarantee the performance of an
    obligation by the principal under the bond. Commercial bonds
    guarantee the performance of compliance obligations                                                                                                                                                                                                                                                                                  

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | arising out of regulatory or statutory requirements. Contract
    bonds guarantee the performance of contractual obligations
    between two parties and include payment and performance bonds.
    The majority of our surety treaties are written on an
    excess-of-loss basis
    with an aggregate limit.                                                                                                                                
|
| |  | Trade Credit. Trade credit insurance is purchased by
    companies to ensure that invoices for goods and services
    provided to their customers are paid on time. Our trade credit
    coverages provide reinsurance for financial losses sustained
    through the failure of an insureds customers to pay for
    goods or services supplied to them. We reinsure trade credit
    both on a proportional and an
    excess-of-loss basis.

Finite Risk


excess-of




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Finite quota share. Under finite quota share reinsurance
    contracts, the reinsurer agrees to indemnify a ceding company
    for a percentage of its losses up to an aggregate maximum or cap
    in return for a percentage of the ceding companys premium,
    less a ceding commission. The expected benefit to the ceding
    company provided by finite quota share reinsurance is increased
    underwriting capacity of the ceding company and a sharing of
    losses with the reinsurer. These contracts often provide broad
    protection and may cover multiple classes of a ceding
    companys business. Unlike traditional quota share
    reinsurance agreements, these contracts often provide for profit
    commissions which take into account investment income for
    purposes of calculating the reinsurers profit on business
    ceded. Additionally, finite quota share contracts are often
    written on a funds withheld basis, meaning the parties agree
    that funds that would normally be remitted to a reinsurer are
    withheld by the ceding company.                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Multi-year
    excess-of-loss.
    These reinsurance contracts often complement ceding
    companies traditional
    excess-of-loss
    reinsurance programs. This type of contract often carries an
    up-front premium plus additional premiums which are dependent on
    the magnitude of losses claimed by the ceding company under the
    contract. The expected benefit to the ceding company on
    multi-year
    excess-of-loss
    reinsurance is that the ceding company has the ability to
    negotiate specific terms and conditions that remain applicable
    over multiple years of coverage. These contracts may cover
    multiple classes of a ceding companys business and
    typically provide the benefit of reducing the impact of large
    losses on a ceding companys underwriting results. In
    general, these contracts are designed so that the ceding company
    funds the expected level of loss activity over the multi-year
    period. The reinsurer incorporates a profit margin to cover its
    costs and the risk that losses are worse than expected. The
    payment of premiums based on the magnitude of losses claimed is
    intended to benefit the ceding company by linking its own loss
    experience to the actual cost of reinsurance over time. The
    multiple year term and premium structure of multi-year
    excess-of-loss
    reinsurance contracts are not typically found in traditional
    reinsurance contracts.
|
| |  | Whole account aggregate stop loss. Aggregate stop loss
    reinsurance contracts provide broad protection against a wide
    range of contingencies that are difficult to address with
    traditional reinsurance, including inadequate pricing by a
    ceding company or higher frequency of claims than the ceding
    company expected. The reinsurer on a whole account aggregate
    stop loss contract agrees to indemnify a ceding company for
    aggregate losses in excess of a deductible specified in the
    contract. These contracts can be offered on a single or
    multi-year basis, and may provide catastrophic and attritional
    loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

9



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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | protection. The benefit of whole account aggregate stop loss
    contracts to ceding companies is that such contracts provide the
    broadest possible protection of a ceding companys
    underwriting results which is not generally available in the
    traditional reinsurance market. Unlike traditional reinsurance
    contracts, these contracts often contain sub-limits of coverage
    for losses on certain classes of business or exposures. These
    contracts are often written on a funds withheld basis. In
    addition, these contracts often include provisions for profit
    commissions which take into account investment income for
    purposes of calculating the reinsurers profit on business
    ceded.

Marketing






Underwriting and Risk Management








excess-of




10



---



##### Table of Contents









Risk Diversification








Retrocessional Reinsurance








11



---



##### Table of Contents





excess-of excess-of


excess-of


excess-of


Claims Administration








12



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##### Table of Contents



Unpaid Losses and Loss Adjustment Expenses










13



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|                                                          |              |                                   |           |           |           |   |           |           |           |   |         |         |         | 
|--------------------------------------------------------- | ------------ | --------------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | - | ------- | ------- | ------- | 
|                                                          |              | 2005                              |           |           | 2004      |   |           | 2003      |          
|                                                          |              |                                   |           |           |           |   |           |           |          
|Net unpaid losses and LAE as of the beginning of the year |              | $                                 | 1,379,227 |           |           | $ | 731,918   |           |           | $ | 281,659 |        
|                                                          |              |                                   |           |           |           |   |           |           |          
|Net incurred related to:                                  |              |                                   |           |           |           |   |           |           |           |   |         |        
|                                                          | Current year |                                   |           | 1,577,944 |           |   |           | 1,101,820 |           |   |         | 648,137 |        
|                                                          | Prior years  |                                   |           | (72,519   | )         |   |           | (82,016   | )         |   |         | (63,966 | )      
|                                                          |              |                                   |           |           |           |   |           |           |          
|                                                          |              | Total net incurred losses and LAE |           |           | 1,505,425 |   |           |           | 1,019,804 |   |         |         | 584,171 | 
|                                                          |              |                                   |           |           |           |   |           |           |          
|Net paid losses and LAE:                                  |              |                                   |           |           |           |   |           |           |           |   |         |        
|                                                          | Current year |                                   |           | 210,306   |           |   |           | 174,870   |           |   |         | 102,669 |        
|                                                          | Prior years  |                                   |           | 390,598   |           |   |           | 205,889   |           |   |         | 41,709  |        
|                                                          |              |                                   |           |           |           |   |           |           |          
|                                                          |              | Total net paid losses and LAE     |           |           | 600,904   |   |           |           | 380,759   |   |         |         | 144,378 | 
|Effects of foreign currency exchange rate changes         |              |                                   | (15,093   | )         |           |   | 8,264     |           |           |   | 10,466  |        
|                                                          |              |                                   |           |           |           |   |           |           |          
|Net unpaid losses and LAE as of the end of the year       |              |                                   | 2,268,655 |           |           |   | 1,379,227 |           |           |   | 731,918 |        
|Reinsurance recoverable                                   |              |                                   | 55,335    |           |           |   | 1,728     |           |           |   | 5,016   |        
|                                                          |              |                                   |           |           |           |   |           |           |          
|Gross unpaid losses and LAE at end of the year            |              | $                                 | 2,323,990 |           |           | $ | 1,380,955 |           |           | $ | 736,934 |        
|                                                          |              |                                   |           |           |           |   |           |           |          









14



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|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |           |        |   |           |   |  | 
|--------------------------------------------------------- | ----------------- | ------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | --------- | --------- | ------ | - | --------- | - |  | 
|                                                          |                   | 2002                      |         |         | 2003    |   |         | 2004    |         |   | 2005      |          
|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |          
|Net unpaid losses and LAE at end of year                  |                   | $                         | 281,659 |         |         | $ | 731,918 |         |         | $ | 1,379,227 |           |        | $ | 2,268,655 |  
|Net unpaid losses and LAE re-estimated as of:             |                   |                           |         |         |         |   |         |         |         |   |           |           |        |   |           |  
|                                                          | One year later    |                           |         | 224,693 |         |   |         | 649,902 |         |   |           | 1,306,708 |        |   |           |   | 
|                                                          | Two years later   |                           |         | 194,422 |         |   |         | 604,891 |         |   |           |           |        |   |           |   | 
|                                                          | Three years later |                           |         | 176,884 |         |   |         |         |         |   |           |           |        |   |           |   | 
|                                                          |                   | Net cumulative redundancy |         |         | 104,775 |   |         |         | 127,027 |   |           |           | 72,519 |   |           |   |  | 
|Adjustment for foreign currency exchange                  |                   |                           | 9,454   |         |         |   | 1,638   |         |         |   | (15,092   | )         |        |   |           |  
|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |          
|Cumulative redundancy excluding foreign currency exchange |                   |                           | 114,229 |         |         |   | 128,665 |         |         |   | 57,427    |           |        |   |           |  
|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |          
|Net cumulative paid losses and LAE paid as of:            |                   |                           |         |         |         |   |         |         |         |   |           |           |        |   |           |  
|                                                          | One year later    |                           |         | 41,709  |         |   |         | 205,889 |         |   |           | 388,700   |        |   |           |   | 
|                                                          | Two years later   |                           |         | 62,604  |         |   |         | 265,376 |         |   |           |           |        |   |           |   | 
|                                                          | Three years later |                           |         | 73,908  |         |   |         |         |         |   |           |           |        |   |           |   | 
|Gross liability-end of year                               |                   |                           | 281,659 |         |         |   | 736,934 |         |         |   | 1,380,955 |           |        |   | 2,323,990 |  
|Reinsurance recoverable                                   |                   |                           |        |         |         |   | 5,016   |         |         |   | 1,728     |           |        |   | (55,335   | )
|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |          
|Net liability-end of year                                 |                   |                           | 281,659 |         |         |   | 731,918 |         |         |   | 1,379,227 |           |        | $ | 2,268,655 |  
|                                                          |                   |                           |         |         |         |   |         |         |         |   |           |          
|Gross liability- re-estimated                             |                   |                           | 176,884 |         |         |   | 609,907 |         |         |   | 1,308,436 |           |        |   |           |  
|Gross cumulative redundancy                               |                   | $                         | 104,775 |         |         | $ | 127,027 |         |         | $ | 72,519    |           |        |   |           |  

Investments






| |                                 
| | --------------------------------
| | Investment Management Agreements



15



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| |                   
| | ------------------
| | General Guidelines











| |               
| | --------------
| | Classification





| |          
| | ---------
| | Valuation



16



---



##### Table of Contents











|                                                  |                                 |   |           |           | 
|------------------------------------------------- | ------------------------------- | - | --------- | --------- | 
|U.S. Government and U.S. Government agencies      |                                 | $ | 139,584   |          
|Corporate bonds                                   |                                 |   | 1,101,618 |          
|Mortgage and asset-backed securities              |                                 |   | 1,141,932 |          
|Municipal bonds                                   |                                 |   | 212,361   |          
|Foreign governments, states and foreign corporate |                                 |   | 330,656   |          
|                                                  |                                 |   |          
|                                                  | Total bonds                     |   |           | 2,926,151 | 
|Redeemable preferred stocks                       |                                 |   | 61,552    |          
|                                                  |                                 |   |          
|                                                  | Total fixed maturity securities |   | $         | 2,987,703 | 
|Preferred stocks                                  |                                 |   | 8,186     |          
|Short-term investments                            |                                 |   | 8,793     |          
|                                                  |                                 |   |          
|                                                  | Total                           |   | $         | 3,004,682 | 
|                                                  |                                 |   |          



| |        
| | -------
| | Quality





|       |       |            |           |           |            |  |      |       |  
|------ | ----- | ---------- | --------- | --------- | ---------- |  | ---- | ----- | -
|       |       | Fair Value |           |           | % of Total | 
|       |       |            |           |           |            | 
|Aaa    |       | $          | 1,600,733 |           |            |  | 53.4 | %    
|Aa-Aa3 |       |            | 521,148   |           |            |  | 17.4 | %    
|A-A3   |       |            | 757,452   |           |            |  | 25.3 | %    
|Baa    |       |            | 116,556   |           |            |  | 3.9  | %    
|       |       |            |           |           |            | 
|       | Total |            | $         | 2,995,889 |            |  |      | 100.0 | %
|       |       |            |           |           |            | 

17



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##### Table of Contents





| |                      
| | ---------------------
| | Duration and maturity





|                                     |       |           |           |           |            |   |           |           | 
|------------------------------------ | ----- | --------- | --------- | --------- | ---------- | - | --------- | --------- | 
|                                     |       | Amortized |           |           |           
|                                     |       | Cost      |           |           | Fair Value |  
|                                     |       |           |           |           |            |  
|Due in one year or less              |       | $         | 105,221   |           |            | $ | 104,497   |          
|Due from one to five years           |       |           | 1,196,981 |           |            |   | 1,178,204 |          
|Due from five to ten years           |       |           | 256,821   |           |            |   | 251,066   |          
|Due in ten or more years             |       |           | 217,879   |           |            |   | 213,223   |          
|Mortgage and asset backed securities |       |           | 1,159,250 |           |            |   | 1,141,932 |          
|                                     |       |           |           |           |            |  
|                                     | Total |           | $         | 2,936,152 |            |   | $         | 2,888,922 | 
|                                     |       |           |           |           |            |  

Competition


U.S.-based






18



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Ratings and Collateral
















19



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##### Table of Contents



Employees






Regulation




| |        
| | -------
| | General





| |                   
| | ------------------
| | Bermuda Regulation



day-to






Principal Representative.


20



---



##### Table of Contents





Independent Approved Auditor.


Loss Reserve Specialist.


Approved Actuary.


Statutory Financial Statements.


Annual Statutory Financial Return.


21



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##### Table of Contents





Minimum Solvency Margin and Restrictions on Dividends and
Distributions.




| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | (1) is required, with respect to its general business, to
    maintain a minimum solvency margin equal to the greatest of:



| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (A) $100,000,000;                                                                                                                                                                                                                   
|
| | (B) 50% of net premiums written (being gross premiums
    written less any premiums ceded by Platinum Bermuda, but
    Platinum Bermuda may not deduct more than 25% of gross premiums
    when computing net premiums written); and
|
| | (C) 15% of loss and other insurance reserves;                                                                                                                                                                                       



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) is prohibited from declaring or paying any dividends
    during any financial year if it is in breach of its minimum
    solvency margin or minimum liquidity ratio or if the declaration
    or payment of such dividends would cause it to fail to meet such
    margin or ratio (and if it has failed to meet its minimum
    solvency margin or minimum liquidity ratio on the last day of
    any financial year, Platinum Bermuda is prohibited, without the
    approval of the Authority, from declaring or paying any
    dividends during the next financial year);
|
| | (3) is prohibited from declaring or paying in any financial
    year dividends of more than 25% of its total statutory capital
    and surplus (as shown on its previous financial years
    statutory balance sheet) unless it files with the Authority (at
    least seven days before payment of such dividends) an affidavit
    stating that it will continue to meet the required margins;                                                                                                                                                                                
|
| | (4) is prohibited, without the approval of the Authority,
    from reducing by 15% or more its total statutory capital as set
    out in its previous years financial statements, and any
    application for such approval must include an affidavit stating
    that it will continue to meet the required margins; and                                                                                                                                                                                                                                                       
|
| | (5) is required, at any time it fails to meet its solvency
    margin, within 30 days (45 days where total statutory
    capital and surplus falls to $75 million or less) after
    becoming aware of that failure or having reason to believe that
    such failure has occurred, to file with the Authority a written
    report containing certain information.                                                                                                                                                                                                              



Minimum Liquidity Ratio.


22



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Long-term Business Fund.


Restrictions on Transfer of Business and Winding-Up.




| |                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) all or any part of the long-term business, other than
    long-term business that is reinsurance business, may be
    transferred only with and in accordance with the sanction of the
    applicable Bermuda court; and                                                                                                   
|
| | (2) an insurer or reinsurer carrying on long-term business
    may only be wound-up or
    liquidated by order of the applicable Bermuda court, and this
    may increase the length of time and costs incurred in the
    winding-up of Platinum
    Bermuda when compared with a voluntary
    winding-up or
    liquidation.

Supervision and Intervention.










23



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##### Table of Contents





| |                
| | ---------------
| | U.S. Regulation



U.S. Insurance Holding Company Regulation of Platinum
Holdings, Platinum Regency and Platinum Finance.






U.S. Insurance Regulation of Platinum US.




24



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##### Table of Contents













| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) 10% of statutory policyholders surplus (as
    determined under statutory accounting principles) as of
    December 31 of the prior year; or                                                                                                                                                                                                                                                                                                      
|
| | (2) 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
    and pro rata distribution of any class of securities of Platinum
    US, plus any amounts of net investment income (excluding
    realized capital gains) in the three calendar years prior to the
    preceding year which have not been distributed.









25



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Platinum UK and Platinum Bermuda.




| |                
| | ---------------
| | U.K. Regulation







Supervision.


Solvency Requirements.




26



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##### Table of Contents



Restrictions on Dividend Payments.


Reporting Requirements.


Supervision of Management.


Change of Control.




Intervention and Enforcement.




Proposed Regulatory Developments in the U.K. and at the
European Union Level.






27



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##### Table of Contents




















28



---



##### Table of Contents





Winding-up winding-up








| |                   
| | ------------------
| | Ireland Regulation



Available Information


10-K, 10-Q, 8-K,


29



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##### Table of Contents










Item 1A. Risk Factors


10-K




| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | The occurrence of severe catastrophic events could have a
    material adverse effect on our financial condition or results of
    operations.





| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Uncertainty related to estimated losses from the 2005
    Hurricanes may further impact our financial results.







30



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| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the loss limitation methods and pricing models we
    employ are not effective, our financial condition or results of
    operations could be materially adversely affected.





excess-of






| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | If we are required to increase our liabilities for losses
    and LAE, our operating results may be adversely affected.



31



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| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | A downgrade in the ratings assigned to the Company could
    adversely affect our ability to write new business.









32



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| |                                                                    
| | -------------------------------------------------------------------
| | Increased competition could adversely affect our
    profitability.









33



---



##### Table of Contents





| |                                                                           
| | --------------------------------------------------------------------------
| | Retrocessional reinsurance may become unavailable on
    acceptable terms.







| |                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are dependent on the business provided to us by
    reinsurance brokers and we may be exposed to liability for
    brokers failure to make payments to clients for their
    claims; in addition, there are ongoing industry-wide
    investigations relating to the conduct of insurance and
    reinsurance brokers.











| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The current investigations into finite risk reinsurance
    products could have a material adverse effect on our financial
    condition or results of operations.





34



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| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The property and casualty reinsurance business is
    historically cyclical, and we expect to experience periods with
    excess underwriting capacity and unfavorable pricing.







| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | Our invested assets are subject to market volatility and
    interest rate and currency exchange rate fluctuation.







| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | It may be difficult to enforce service of process and
    judgments against us and our officers and directors.



35



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##### Table of Contents





| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | There are limitations on the ownership, transfer and
    voting rights of our Common Shares.









36



---



##### Table of Contents











| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Platinum Holdings is a holding company and, consequently,
    its cash flow is dependent on dividends, interest and other
    permissible payments from its subsidiaries.







| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The imposition of U.S. corporate income tax on
    Platinum Holdings and its
    non-U.S.subsidiaries
    could adversely affect our results of operations.





| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under certain circumstances, you may be required to pay
    taxes on your pro rata share of the related person insurance
    income of Platinum Bermuda and of Platinum UK.



37



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##### Table of Contents









| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | A recently published IRS Revenue Ruling could be applied
    to recharacterize the insurance arrangements between Platinum US
    and Platinum Bermuda.





| |                                                          
| | ---------------------------------------------------------
| | We may become subject to taxes in Bermuda after
    2016.



38



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##### Table of Contents





| |                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------
| | Bermuda could be subject to sanctions by a number of
    multinational organizations which could adversely affect Bermuda
    companies.





| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | The regulatory system under which we operate and potential
    changes thereto, could significantly and adversely affect our
    business.







39



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##### Table of Contents








|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|Item 2. | Properties












|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings












|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



40



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##### Table of Contents






PART II







|        |                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------
|Item 5. | Market For Registrants Common Equity, Related
    Shareholder Matters and Issuer Purchases of Equity Securities



|      |                |                |   |       |     |  |   |       | 
|----- | -------------- | -------------- | - | ----- | --- |  | - | ----- | 
|      |                | Price Range of |  
|      |                | Common Shares  |  
|      |                |                |  
|Year  |                | High           |   |       | Low | 
|      |                |                |   |       |     | 
|2005: |                |                |   |       |     |  |   |      
|      | First Quarter  |                | $ | 32.03 |     |  | $ | 29.02 | 
|      | Second Quarter |                |   | 32.15 |     |  |   | 26.43 | 
|      | Third Quarter  |                |   | 35.21 |     |  |   | 27.45 | 
|      | Fourth Quarter |                | $ | 31.70 |     |  | $ | 27.10 | 
|2004: |                |                |   |       |     |  |   |      
|      | First Quarter  |                | $ | 34.20 |     |  | $ | 29.00 | 
|      | Second Quarter |                |   | 34.00 |     |  |   | 30.00 | 
|      | Third Quarter  |                |   | 31.13 |     |  |   | 27.43 | 
|      | Fourth Quarter |                | $ | 31.13 |     |  | $ | 27.30 | 











41



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##### Table of Contents









Equity Based Compensation Information




|                                                           |       |                         |           |           |                         |                      |                     |                          |  |  |         |         | 
|---------------------------------------------------------- | ----- | ----------------------- | --------- | --------- | ----------------------- | -------------------- | ------------------- | ------------------------ |  |  | ------- | ------- | 
|                                                           |       |                         |           |           |                         | (c)                  |                    
|                                                           |       |                         |           |           |                         | Number of Securities |                    
|                                                           |       | (a)                     |           |           |                         |                      | Remaining Available |                         
|                                                           |       | Number of Securities    |           |           | (b)                     |                      |                     | for Future Issuance      | 
|                                                           |       | to be Issued            |           |           | Weighted-Average        |                      |                     | under Equity             | 
|                                                           |       | upon Exercise           |           |           | Exercise Price          |                      |                     | Compensation Plans       | 
|                                                           |       | of Outstanding Options, |           |           | of Outstanding Options, |                      |                     | (excluding securities    | 
|Plan Category                                              |       | Warrants and Rights     |           |           | Warrants and Rights     |                      |                     | reflected in column (a)) | 
|                                                           |       |                         |           |           |                         |                      |                     |                          | 
|Equity compensation plans approved by security holders(1)  |       |                         | 3,917,603 |           |                         | $                    | 23.93               |                          |  |  | 821,612 |        
|Equity compensation plans not approved by security holders |       |                         |          |           |                         |                      |                    |                          |  |  |        |        
|                                                           |       |                         |           |           |                         |                      |                     |                          | 
|                                                           | Total |                         |           | 3,917,603 |                         |                      | $                   | 23.93                    |  |  |         | 821,612 | 
|                                                           |       |                         |           |           |                         |                      |                     |                          | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These plans consist of the 2002 Share Incentive Plan, which
    was approved by the shareholders of the Company at the 2004
    Annual General Meeting of Shareholders, the Section 162(m)
    Performance Incentive Plan, which was approved by the
    shareholders of the Company at the 2003 Annual General Meeting
    of Shareholders, and the Share Unit Plan for Nonemployee
    Directors and the Capital Accumulation Plan, each of which was
    approved by the sole shareholder of the Company prior to the
    Initial Public Offering.

42



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

10-K. 10-K. 10-K. 10-K, 10-K.


The underwriting results and the audited historical combined
financial statements of St. Paul Re prior to the Initial Public
Offering (the Predecessor Business) are not indicative of the
actual results of the Company subsequent to the Initial Public
Offering.


Five-Year Summary of Selected Financial Data


($ in millions, except per share amounts)


|                                         |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |   |       |   |  |   |       |  
|---------------------------------------- |  | ------------------------------------ | ------- | --------------- | ------------------------- | - | ----------- | ----------- |  | - | ------------ |  |  | ---- | ------- |  | ---- | - | ----- | - |  | - | ----- | -
|                                         |  | Platinum Underwriters Holdings, Ltd. |         |                 | St. Paul Re (Predecessor) |  
|                                         |  |                                      |         |                 |                           |  
|                                         |  |                                      |         | As of and for   |                           |   | Period from |             |  |  
|                                         |  |                                      |         | the period from |                           |   | January 1,  |             |  |  
|                                         |  |                                      |         | April 19, 2002  |                           |   | 2002        |             |  |  
|                                         |  | Years Ended December 31,             |         |                 | through                   |   |             | through     |  |   | Year Ended   | 
|                                         |  |                                      |         |                 | December 31,              |   |             | November 1, |  |   | December 31, | 
|                                         |  | 2005                                 |         |                 | 2004                      |   |             | 2003        |  |   | 2002         |  |  | 2002 |         |  | 2001 |  
|                                         |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |  
|Statement of Operations Data:            |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |   |       |   |  |   |       |  
|Net premiums written                     |  | $                                    | 1,717.7 |                 |                           | $ | 1,646.0     |             |  | $ | 1,172.1      |  |  | $    | 298.1   |  |      | $ | 1,007 |   |  | $ | 1,677 |  
|                                         |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |  
|Net premiums earned                      |  |                                      | 1,714.7 |                 |                           |   | 1,447.9     |             |  |   | 1,067.5      |  |  |      | 107.1   |  |      |   | 1,102 |   |  |   | 1,593 |  
|Net investment income                    |  |                                      | 129.4   |                 |                           |   | 84.5        |             |  |   | 57.6         |  |  |      | 5.2     |  |      |   |       |   |  |   |       |  
|Losses and LAE                           |  |                                      | 1,505.4 |                 |                           |   | 1,019.8     |             |  |   | 584.2        |  |  |      | 60.4    |  |      |   | 791   |   |  |   | 1,922 |  
|Underwriting expenses                    |  | $                                    | 458.8   |                 |                           | $ | 381.0       |             |  | $ | 320.7        |  |  | $    | 37.6    |  |      |   | 319   |   |  |   | 397   |  
|                                         |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |  
|Underwriting gain (loss)                 |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      | $ | (8    | ) |  | $ | (726  | )
|                                         |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |  
|Net income (loss)                        |  |                                      | (137.5  | )               |                           |   | 84.8        |             |  |   | 144.8        |  |  |      | 6.4     |  |      |   |       |   |  |   |       |  
|Basic earnings (loss) per common share   |  |                                      | (3.01   | )               |                           |   | 1.96        |             |  |   | 3.37         |  |  |      | 0.15    |  |      |   |       |   |  |   |       |  
|Diluted earnings (loss) per common share |  |                                      | (3.01   | )               |                           |   | 1.81        |             |  |   | 3.09         |  |  |      | 0.15    |  |      |   |       |   |  |   |       |  
|Dividends declared per common share      |  | $                                    | 0.32    |                 |                           | $ | 0.32        |             |  | $ | 0.32         |  |  | $    |        |  |      |   |       |   |  |   |       |  
|Balance Sheet Data:                      |  |                                      |         |                 |                           |   |             |             |  |   |              |  |  |      |         |  |      |   |       |   |  |   |       |  
|Total investments and cash               |  | $                                    | 3,830.4 |                 |                           | $ | 2,456.9     |             |  | $ | 1,790.5      |  |  | $    | 1,346.7 |  |      |   |       |   |  |   |       |  
|Premiums receivable                      |  |                                      | 567.4   |                 |                           |   | 580.0       |             |  |   | 487.4        |  |  |      | 5.6     |  |      |   |       |   |  |   |       |  
|Total assets                             |  |                                      | 5,154.4 |                 |                           |   | 3,422.0     |             |  |   | 2,485.6      |  |  |      | 1,644.9 |  |      |   |       |   |  |   |       |  
|Net unpaid losses and LAE                |  |                                      | 2,268.7 |                 |                           |   | 1,379.2     |             |  |   | 731.9        |  |  |      | 281.7   |  |      |   |       |   |  |   |       |  
|Net unearned premiums                    |  |                                      | 494.1   |                 |                           |   | 499.5       |             |  |   | 299.9        |  |  |      | 191.0   |  |      |   |       |   |  |   |       |  
|Debt obligations                         |  |                                      | 292.8   |                 |                           |   | 137.5       |             |  |   | 137.5        |  |  |      | 137.5   |  |      |   |       |   |  |   |       |  
|Shareholders equity                     |  |                                      | 1,540.2 |                 |                           |   | 1,133.0     |             |  |   | 1,067.2      |  |  |      | 921.2   |  |      |   |       |   |  |   |       |  
|Book value per common share              |  | $                                    | 23.22   |                 |                           | $ | 26.30       |             |  | $ | 24.79        |  |  | $    | 21.42   |  |      |   |       |   |  |   |       |  

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

The following discussion and analysis should be read in
conjunction with the Companys consolidated financial
statements and the related notes included on pages F-1 through
F-42 of this
Form 10-K. The
Companys consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America
(U.S. GAAP).


Overview






Critical Accounting Policies and Use of Estimates






| |         
| | --------
| | Premiums





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| |                      
| | ---------------------
| | Unpaid Losses and LAE









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|                  |                             |            |         |         |          |   |         |             |  |   |         |         |  |   |           |           | 
|----------------- | --------------------------- | ---------- | ------- | ------- | -------- | - | ------- | ----------- |  | - | ------- | ------- |  | - | --------- | --------- | 
|                  |                             | Property   |         |         |          |   |         |             | 
|                  |                             | and Marine |         |         | Casualty |   |         | Finite Risk |  |   | Total   |        
|                  |                             |            |         |         |          |   |         |             |  |   |         |        
|December 31, 2005 |                             |            |         |         |          |   |         |             |  |   |         |         |  |   |           |          
|Case reserves     |                             | $          | 292,722 |         |          | $ | 152,872 |             |  | $ | 66,151  |         |  | $ | 511,745   |          
|IBNR              |                             |            | 570,783 |         |          |   | 954,444 |             |  |   | 287,018 |         |  |   | 1,812,245 |          
|                  |                             |            |         |         |          |   |         |             |  |   |         |        
|                  | Total unpaid losses and LAE |            | $       | 863,505 |          |   | $       | 1,107,316   |  |   | $       | 353,169 |  |   | $         | 2,323,990 | 
|                  |                             |            |         |         |          |   |         |             |  |   |         |        
|December 31, 2004 |                             |            |         |         |          |   |         |             |  |   |         |         |  |   |           |          
|Case reserves     |                             | $          | 9,221   |         |          | $ | 87,993  |             |  | $ | 132,240 |         |  | $ | 229,454   |          
|IBNR              |                             |            | 223,740 |         |          |   | 647,926 |             |  |   | 279,835 |         |  |   | 1,151,501 |          
|                  |                             |            |         |         |          |   |         |             |  |   |         |        
|                  | Total unpaid losses and LAE |            | $       | 232,961 |          |   | $       | 735,919     |  |   | $       | 412,075 |  |   | $         | 1,380,955 | 
|                  |                             |            |         |         |          |   |         |             |  |   |         |        











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excess-of




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| |            
| | -----------
| | Reinsurance





| |            
| | -----------
| | Investments







| |             
| | ------------
| | Income Taxes





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| |                         
| | ------------------------
| | Stock-Based Compensation







Reinsurance Industry Conditions and Trends




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Results of Operations


Year Ended December 31, 2005 as Compared with the
Year Ended December 31, 2004




|                  |  |      |          |   |      |   |        |          |  |   |          |  
|----------------- |  | ---- | -------- | - | ---- | - | ------ | -------- |  | - | -------- | -
|                  |  | 2005 |          |   | 2004 |   |        | Decrease | 
|                  |  |      |          |   |      |   |        |          | 
|Net income (loss) |  | $    | (137,487 | ) |      | $ | 84,783 |          |  | $ | (222,270 | )





|                           |                                |                                             |         |         |         |   |         |         |         | 
|-------------------------- | ------------------------------ | ------------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                           |                                | 2005                                        |         |         | 2004    |  
|                           |                                |                                             |         |         |         |  
|Gross losses and LAE       |                                | $                                           | 654,090 |         |         | $ | 230,475 |        
|Retrocessional reinsurance |                                |                                             | (73,800 | )       |         |   |        |        
|                           |                                |                                             |         |         |         |  
|                           | Net losses and LAE             |                                             |         | 580,290 |         |   |         | 230,475 |        
|                           | Additional net premiums earned |                                             |         | (46,666 | )       |   |         | (29,265 | )      
|                           | Profit commissions             |                                             |         | (3,654  | )       |   |         | (10,243 | )      
|                           |                                |                                             |         |         |         |  
|                           |                                | Net adverse impact on underwriting results  |         |         | 529,970 |   |         |         | 190,967 | 
|Income tax benefit         |                                |                                             | (70,944 | )       |         |   | (14,537 | )      
|                           |                                |                                             |         |         |         |  
|                           |                                | Net adverse impact on results of operations |         | $       | 459,026 |   |         | $       | 176,430 | 
|                           |                                |                                             |         |         |         |  



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|                     |  |      |           |  |      |   |           |          |  |   |         | 
|-------------------- |  | ---- | --------- |  | ---- | - | --------- | -------- |  | - | ------- | 
|                     |  | 2005 |           |  | 2004 |   |           | Increase | 
|                     |  |      |           |  |      |   |           |          | 
|Net premiums written |  | $    | 1,717,722 |  |      | $ | 1,646,013 |          |  | $ | 71,709  | 
|Net premiums earned  |  | $    | 1,714,723 |  |      | $ | 1,447,935 |          |  | $ | 266,788 | 









|                      |  |      |           |   |      |   |           |          |  |            
|--------------------- |  | ---- | --------- | - | ---- | - | --------- | -------- |  | -----------
|                      |  | 2005 |           |   | 2004 |   |           | Increase
|                      |  |      |           |   |      |   |           |         
|Losses and LAE        |  | $    | 1,505,425 |   |      | $ | 1,019,804 |          |  | $485,621   
|Losses and LAE ratios |  |      | 87.8      | % |      |   | 70.4      | %        |  | 17.4 points



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|                           |  |      |         |   |      |   |         |          |  |           
|-------------------------- |  | ---- | ------- | - | ---- | - | ------- | -------- |  | ----------
|                           |  | 2005 |         |   | 2004 |   |         | Increase
|                           |  |      |         |   |      |   |         |         
|Acquisition expenses       |  | $    | 403,135 |   |      | $ | 327,821 |          |  | $75,314   
|Acquisition expense ratios |  |      | 23.5    | % |      |   | 22.6    | %        |  | 0.9 points











|                       |  |      |         |   |      |   |        |          |  |              
|---------------------- |  | ---- | ------- | - | ---- | - | ------ | -------- |  | -------------
|                       |  | 2005 |         |   | 2004 |   |        | Decrease
|                       |  |      |         |   |      |   |        |         
|Income taxes (benefit) |  | $    | (24,967 | ) |      | $ | 30,349 |          |  | $(55,316)    
|Effective tax rate     |  |      | 15.4    | % |      |   | 26.4   | %        |  | (11.0) points



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Year Ended December 31,
2004 as Compared with the Year Ended December 31,
2003




|           |  |      |        |  |      |   |         |          |  |   |         |  
|---------- |  | ---- | ------ |  | ---- | - | ------- | -------- |  | - | ------- | -
|           |  | 2004 |        |  | 2003 |   |         | Decrease | 
|           |  |      |        |  |      |   |         |          | 
|Net income |  | $    | 84,783 |  |      | $ | 144,823 |          |  | $ | (60,040 | )





|                     |  |      |           |  |      |   |           |          |  |   |         | 
|-------------------- |  | ---- | --------- |  | ---- | - | --------- | -------- |  | - | ------- | 
|                     |  | 2004 |           |  | 2003 |   |           | Increase | 
|                     |  |      |           |  |      |   |           |          | 
|Net premiums written |  | $    | 1,646,013 |  |      | $ | 1,172,142 |          |  | $ | 473,871 | 
|Net premiums earned  |  | $    | 1,447,935 |  |      | $ | 1,067,527 |          |  | $ | 380,408 | 









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|                      |  |      |           |   |      |   |         |          |  |            
|--------------------- |  | ---- | --------- | - | ---- | - | ------- | -------- |  | -----------
|                      |  | 2004 |           |   | 2003 |   |         | Increase
|                      |  |      |           |   |      |   |         |         
|Losses and LAE        |  | $    | 1,019,804 |   |      | $ | 584,171 |          |  | $435,633   
|Losses and LAE ratios |  |      | 70.4      | % |      |   | 54.7    | %        |  | 15.7 points





|                           |  |      |         |   |      |          |         |            |  |  |              | 
|-------------------------- |  | ---- | ------- | - | ---- | -------- | ------- | ---------- |  |  | ------------ | 
|                           |  |      |         |   |      | Increase |        
|                           |  | 2004 |         |   | 2003 |          |         | (decrease) | 
|                           |  |      |         |   |      |          |         |            | 
|Acquisition expenses       |  | $    | 327,821 |   |      | $        | 251,226 |            |  |  | $76,595      | 
|Acquisition expense ratios |  |      | 22.6    | % |      |          | 23.5    | %          |  |  | (0.9) points | 



start-up






|                   |  |      |        |   |      |          |        |            |  |  |            |  
|------------------ |  | ---- | ------ | - | ---- | -------- | ------ | ---------- |  |  | ---------- | -
|                   |  |      |        |   |      | Increase |       
|                   |  | 2004 |        |   | 2003 |          |        | (decrease) | 
|                   |  |      |        |   |      |          |        |            | 
|Income taxes       |  | $    | 30,349 |   |      | $        | 48,875 |            |  |  | $(18,526   | )
|Effective tax rate |  |      | 26.4   | % |      |          | 25.2   | %          |  |  | 1.2 points |  



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| |                    
| | -------------------
| | Segment Information



|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |      |        |   |           |      |          |  
|------------------------------------------------------------ | -------------------------- | ---------------------------------- | -------- | ----- | -------- | - | ------- | ----------- | ------ | - | ------- | ---- | ------ | - | --------- | ---- | -------- | -
|                                                             |                            | Property                           |          |       |          |   |         |             |       
|                                                             |                            | and Marine                         |          |       | Casualty |   |         | Finite Risk |        |   | Total   |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Year ended December 31, 2005:                                |                            |                                    |          |       |          |   |         |             |        |   |         |      |        |   |           |     
|Net premiums written                                         |                            | $                                  | 575,055  |       |          | $ | 809,031 |             |        | $ | 333,636 |      |        | $ | 1,717,722 |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net premiums earned                                          |                            |                                    | 569,173  |       |          |   | 789,629 |             |        |   | 355,921 |      |        |   | 1,714,723 |     
|Losses and LAE                                               |                            |                                    | 756,742  |       |          |   | 511,609 |             |        |   | 237,074 |      |        |   | 1,505,425 |     
|Acquisition expenses                                         |                            |                                    | 93,983   |       |          |   | 194,397 |             |        |   | 114,755 |      |        |   | 403,135   |     
|Other underwriting expenses                                  |                            |                                    | 26,074   |       |          |   | 24,690  |             |        |   | 4,905   |      |        |   | 55,669    |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|                                                             |                            | Segment underwriting income (loss) |          | $     | (307,626 | ) |         | $           | 58,933 |   |         | $    | (813   | ) |           | $    | (249,506 | )
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net investment income and net realized losses on investments |                            |                                    | 126,399  |      
|Net foreign currency exchange losses                         |                            |                                    | (2,111   | )    
|Other expense                                                |                            |                                    | (586     | )    
|Corporate expenses not allocated to segments                 |                            |                                    | (14,158  | )    
|Interest expense                                             |                            |                                    | (20,006  | )    
|Loss on repurchase of debt                                   |                            |                                    | (2,486   | )    
|                                                             |                            |                                    |         
|Loss before income tax benefit                               |                            | $                                  | (162,454 | )    
|                                                             |                            |                                    |         
|Ratios:                                                      |                            |                                    |          |       |          |   |         |             |        |   |         |      |        |   |           |     
|                                                             | Losses and LAE             |                                    |          | 133.0 | %        |   |         | 64.8        | %      |   |         | 66.6 | %      |   |           | 87.8 | %       
|                                                             | Acquisition expense        |                                    |          | 16.5  | %        |   |         | 24.6        | %      |   |         | 32.2 | %      |   |           | 23.5 | %       
|                                                             | Other underwriting expense |                                    |          | 4.6   | %        |   |         | 3.1         | %      |   |         | 1.4  | %      |   |           | 3.2  | %       
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|                                                             |                            | Combined                           |          |       | 154.1    | % |         |             | 92.5   | % |         |      | 100.2  | % |           |      | 114.5    | %
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Year ended December 31, 2004:                                |                            |                                    |          |       |          |   |         |             |        |   |         |      |        |   |           |     
|Net premiums written                                         |                            | $                                  | 504,439  |       |          | $ | 677,399 |             |        | $ | 464,175 |      |        | $ | 1,646,013 |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net premiums earned                                          |                            |                                    | 485,135  |       |          |   | 611,893 |             |        |   | 350,907 |      |        |   | 1,447,935 |     
|Losses and LAE                                               |                            |                                    | 349,557  |       |          |   | 418,355 |             |        |   | 251,892 |      |        |   | 1,019,804 |     
|Acquisition expenses                                         |                            |                                    | 76,360   |       |          |   | 151,649 |             |        |   | 99,812  |      |        |   | 327,821   |     
|Other underwriting expenses                                  |                            |                                    | 27,827   |       |          |   | 19,086  |             |        |   | 6,224   |      |        |   | 53,137    |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|                                                             |                            | Segment underwriting income (loss) |          | $     | 31,391   |   |         | $           | 22,803 |   |         | $    | (7,021 | ) |           | $    | 47,173   |  
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net investment income and net realized gains on investments  |                            |                                    | 86,487   |      
|Net foreign currency exchange gains                          |                            |                                    | 725      |      
|Other income                                                 |                            |                                    | 3,211    |      
|Corporate expenses not allocated to segments                 |                            |                                    | (13,196  | )    
|Interest expense                                             |                            |                                    | (9,268   | )    
|                                                             |                            |                                    |         
|Income before income taxes                                   |                            | $                                  | 115,132  |      
|                                                             |                            |                                    |         

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|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |      |        |      |           |      |         |      |  
|----------------------------------------------------------- | -------------------------- | --------------------------- | -------- | ---- | -------- | ---- | ------- | ----------- | ----- | ---- | ------- | ---- | ------ | ---- | --------- | ---- | ------- | ---- | -
|                                                            |                            | Property                    |          |      |          |      |         |             |      
|                                                            |                            | and Marine                  |          |      | Casualty |      |         | Finite Risk |       |      | Total   |     
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|Ratios:                                                     |                            |                             |          |      |          |      |         |             |       |      |         |      |        |      |           |     
|                                                            | Losses and LAE             |                             |          | 72.1 | %        |      |         | 68.4        | %     |      |         | 71.8 | %      |      |           | 70.4 | %      
|                                                            | Acquisition expense        |                             |          | 15.7 | %        |      |         | 24.8        | %     |      |         | 28.4 | %      |      |           | 22.6 | %      
|                                                            | Other underwriting expense |                             |          | 5.7  | %        |      |         | 3.1         | %     |      |         | 1.8  | %      |      |           | 3.7  | %      
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|                                                            |                            | Combined                    |          |      | 93.5     | %    |         |             | 96.3  | %    |         |      | 102.0  | %    |           |      | 96.7    | %   
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|Year ended December 31, 2003:                               |                            |                             |          |      |          |      |         |             |       |      |         |      |        |      |           |     
|Net premiums written                                        |                            | $                           | 352,908  |      |          | $    | 474,000 |             |       | $    | 345,234 |      |        | $    | 1,172,142 |     
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|Net premiums earned                                         |                            |                             | 355,556  |      |          |      | 391,170 |             |       |      | 320,801 |      |        |      | 1,067,527 |     
|Losses and LAE                                              |                            |                             | 169,944  |      |          |      | 266,836 |             |       |      | 147,391 |      |        |      | 584,171   |     
|Acquisition expenses                                        |                            |                             | 52,154   |      |          |      | 101,005 |             |       |      | 98,067  |      |        |      | 251,226   |     
|Other underwriting expenses                                 |                            |                             | 35,598   |      |          |      | 21,060  |             |       |      | 12,870  |      |        |      | 69,528    |     
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|                                                            |                            | Segment underwriting income |          | $    | 97,860   |      |         | $           | 2,269 |      |         | $    | 62,473 |      |           | $    | 162,602 |     
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|Net investment income and net realized gains on investments |                            |                             | 60,426   |     
|Net foreign currency exchange losses                        |                            |                             | (114     | )   
|Other income                                                |                            |                             | 3,343    |     
|Corporate expenses not allocated to segments                |                            |                             | (23,067  | )   
|Interest expense                                            |                            |                             | (9,492   | )   
|                                                            |                            |                             |         
|Income before income taxes                                  |                            | $                           | 193,698  |     
|                                                            |                            |                             |         
|Ratios:                                                     |                            |                             |          |      |          |      |         |             |       |      |         |      |        |      |           |     
|                                                            | Losses and LAE             |                             |          | 47.8 | %        |      |         | 68.2        | %     |      |         | 45.9 | %      |      |           | 54.7 | %      
|                                                            | Acquisition expense        |                             |          | 14.7 | %        |      |         | 25.8        | %     |      |         | 30.6 | %      |      |           | 23.5 | %      
|                                                            | Other underwriting expense |                             |          | 10.0 | %        |      |         | 5.4         | %     |      |         | 4.0  | %      |      |           | 6.5  | %      
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     
|                                                            |                            |                             | Combined |      |          | 72.5 | %       |             |       | 99.4 | %       |      |        | 80.5 | %         |      |         | 84.7 | %
|                                                            |                            |                             |          |      |          |      |         |             |       |      |         |     



| |                    
| | -------------------
| | Property and Marine

excess-of excess-of




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2005 as Compared with the
    Year Ended December 31, 2004



|                     |  |      |         |  |      |   |         |          |  |   |        | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | -------- |  | - | ------ | 
|                     |  | 2005 |         |  | 2004 |   |         | Increase | 
|                     |  |      |         |  |      |   |         |          | 
|Net premiums written |  | $    | 575,055 |  |      | $ | 504,439 |          |  | $ | 70,616 | 
|Net premiums earned  |  | $    | 569,173 |  |      | $ | 485,135 |          |  | $ | 84,038 | 



57



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|                     |  |      |         |   |      |   |         |          |  |  |             | 
|-------------------- |  | ---- | ------- | - | ---- | - | ------- | -------- |  |  | ----------- | 
|                     |  | 2005 |         |   | 2004 |   |         | Increase | 
|                     |  |      |         |   |      |   |         |          | 
|Losses and LAE       |  | $    | 756,742 |   |      | $ | 349,557 |          |  |  | $407,185    | 
|Losses and LAE ratio |  |      | 133.0   | % |      |   | 72.1    | %        |  |  | 60.9 points | 





|                          |  |      |        |   |      |   |        |          |  |  |           | 
|------------------------- |  | ---- | ------ | - | ---- | - | ------ | -------- |  |  | --------- | 
|                          |  | 2005 |        |   | 2004 |   |        | Increase | 
|                          |  |      |        |   |      |   |        |          | 
|Acquisition expenses      |  | $    | 93,983 |   |      | $ | 76,360 |          |  |  | $17,623   | 
|Acquisition expense ratio |  |      | 16.5   | % |      |   | 15.7   | %        |  |  | 0.8 point | 







| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2004 as Compared with the
    Year Ended December 31, 2003



|                     |  |      |         |  |      |   |         |          |  |   |         | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | -------- |  | - | ------- | 
|                     |  | 2004 |         |  | 2003 |   |         | Increase | 
|                     |  |      |         |  |      |   |         |          | 
|Net premiums written |  | $    | 504,439 |  |      | $ | 352,908 |          |  | $ | 151,531 | 
|Net premiums earned  |  | $    | 485,135 |  |      | $ | 355,556 |          |  | $ | 129,579 | 



58



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|                     |  |      |         |   |      |   |         |          |  |            
|-------------------- |  | ---- | ------- | - | ---- | - | ------- | -------- |  | -----------
|                     |  | 2004 |         |   | 2003 |   |         | Increase
|                     |  |      |         |   |      |   |         |         
|Losses and LAE       |  | $    | 349,557 |   |      | $ | 169,944 |          |  | $179,613   
|Losses and LAE ratio |  |      | 72.1    | % |      |   | 47.8    | %        |  | 24.3 points





|                          |  |      |        |   |      |   |        |          |  |           
|------------------------- |  | ---- | ------ | - | ---- | - | ------ | -------- |  | ----------
|                          |  | 2004 |        |   | 2003 |   |        | Increase
|                          |  |      |        |   |      |   |        |         
|Acquisition expenses      |  | $    | 76,360 |   |      | $ | 52,154 |          |  | $24,206   
|Acquisition expense ratio |  |      | 15.7   | % |      |   | 14.7   | %        |  | 1.0 points



start-up




| |         
| | --------
| | Casualty





| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2005 as Compared with the
    Year Ended December 31, 2004



|                     |  |      |         |  |      |   |         |          |  |   |         | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | -------- |  | - | ------- | 
|                     |  | 2005 |         |  | 2004 |   |         | Increase | 
|                     |  |      |         |  |      |   |         |          | 
|Net premiums written |  | $    | 809,031 |  |      | $ | 677,399 |          |  | $ | 131,632 | 
|Net premiums earned  |  | $    | 789,629 |  |      | $ | 611,893 |          |  | $ | 177,736 | 



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excess-of




|                     |  |      |         |   |      |          |         |            |  |             
|-------------------- |  | ---- | ------- | - | ---- | -------- | ------- | ---------- |  | ------------
|                     |  |      |         |   |      | Increase
|                     |  | 2005 |         |   | 2004 |          |         | (decrease)
|                     |  |      |         |   |      |          |         |           
|Losses and LAE       |  | $    | 511,609 |   |      | $        | 418,355 |            |  | $93,254     
|Losses and LAE ratio |  |      | 64.8    | % |      |          | 68.4    | %          |  | (3.6) points





|                          |  |      |         |   |      |          |         |            |  |             
|------------------------- |  | ---- | ------- | - | ---- | -------- | ------- | ---------- |  | ------------
|                          |  |      |         |   |      | Increase
|                          |  | 2005 |         |   | 2004 |          |         | (decrease)
|                          |  |      |         |   |      |          |         |           
|Acquisition expenses      |  | $    | 194,397 |   |      | $        | 151,649 |            |  | $42,748     
|Acquisition expense ratio |  |      | 24.6    | % |      |          | 24.8    | %          |  | (0.2) points







| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2004 as Compared with the
    Year Ended December 31, 2003



|                     |  |      |         |  |      |   |         |          |  |   |         | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | -------- |  | - | ------- | 
|                     |  | 2004 |         |  | 2003 |   |         | Increase | 
|                     |  |      |         |  |      |   |         |          | 
|Net premiums written |  | $    | 677,399 |  |      | $ | 474,000 |          |  | $ | 203,399 | 
|Net premiums earned  |  | $    | 611,893 |  |      | $ | 391,170 |          |  | $ | 220,723 | 



60



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|                     |  |      |         |   |      |   |         |          |  |           
|-------------------- |  | ---- | ------- | - | ---- | - | ------- | -------- |  | ----------
|                     |  | 2004 |         |   | 2003 |   |         | Increase
|                     |  |      |         |   |      |   |         |         
|Losses and LAE       |  | $    | 418,355 |   |      | $ | 266,836 |          |  | $151,519  
|Losses and LAE ratio |  |      | 68.4    | % |      |   | 68.2    | %        |  | 0.2 points





|                          |  |      |         |   |      |          |         |            |  |            
|------------------------- |  | ---- | ------- | - | ---- | -------- | ------- | ---------- |  | -----------
|                          |  |      |         |   |      | Increase
|                          |  | 2004 |         |   | 2003 |          |         | (decrease)
|                          |  |      |         |   |      |          |         |           
|Acquisition expenses      |  | $    | 151,649 |   |      | $        | 101,005 |            |  | $50,644    
|Acquisition expense ratio |  |      | 24.8    | % |      |          | 25.8    | %          |  | (1.0) point



start-up




| |            
| | -----------
| | Finite Risk



61



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excess-of




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2005 as Compared with the
    Year Ended December 31, 2004



|                     |  |      |         |  |      |          |         |            |  |   |          |  
|-------------------- |  | ---- | ------- |  | ---- | -------- | ------- | ---------- |  | - | -------- | -
|                     |  |      |         |  |      | Increase |        
|                     |  | 2005 |         |  | 2004 |          |         | (decrease) | 
|                     |  |      |         |  |      |          |         |            | 
|Net premiums written |  | $    | 333,636 |  |      | $        | 464,175 |            |  | $ | (130,539 | )
|Net premiums earned  |  | $    | 355,921 |  |      | $        | 350,907 |            |  | $ | 5,014    |  







|                                          |  |      |         |   |      |          |         |            |  |             
|----------------------------------------- |  | ---- | ------- | - | ---- | -------- | ------- | ---------- |  | ------------
|                                          |  |      |         |   |      | Increase
|                                          |  | 2005 |         |   | 2004 |          |         | (decrease)
|                                          |  |      |         |   |      |          |         |           
|Losses and LAE                            |  | $    | 237,074 |   |      | $        | 251,892 |            |  | $(14,818)   
|Acquisition expenses                      |  |      | 114,755 |   |      |          | 99,812  |            |  | 14,943      
|Losses, LAE and acquisition expenses      |  | $    | 351,829 |   |      | $        | 351,704 |            |  | $125        
|Losses, LAE and acquisition expense ratio |  |      | 98.8    | % |      |          | 100.2   | %          |  | (1.4) points



62



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| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Year Ended December 31, 2004 as Compared with the
    Year Ended December 31, 2003



|                     |  |      |         |  |      |   |         |          |  |   |         | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | -------- |  | - | ------- | 
|                     |  | 2004 |         |  | 2003 |   |         | Increase | 
|                     |  |      |         |  |      |   |         |          | 
|Net premiums written |  | $    | 464,175 |  |      | $ | 345,234 |          |  | $ | 118,941 | 
|Net premiums earned  |  | $    | 350,907 |  |      | $ | 320,801 |          |  | $ | 30,106  | 





|                                          |  |      |         |   |      |   |         |          |  |            
|----------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -------- |  | -----------
|                                          |  | 2004 |         |   | 2003 |   |         | Increase
|                                          |  |      |         |   |      |   |         |         
|Losses and LAE                            |  | $    | 251,892 |   |      | $ | 147,391 |          |  | $104,501   
|Acquisition expenses                      |  |      | 99,812  |   |      |   | 98,067  |          |  | 1,745      
|Losses, LAE and acquisition expenses      |  | $    | 351,704 |   |      | $ | 245,458 |          |  | $106,246   
|Losses, LAE and acquisition expense ratio |  |      | 100.2   | % |      |   | 76.5    | %        |  | 23.7 points



start-up


63



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Financial Condition, Liquidity and Capital Resources




| |                    
| | -------------------
| | Financial Condition



|                          |       |      |           |           |      |   |           |           |  |   |         |           | 
|------------------------- | ----- | ---- | --------- | --------- | ---- | - | --------- | --------- |  | - | ------- | --------- | 
|                          |       | 2005 |           |           | 2004 |   |           | Increase  | 
|                          |       |      |           |           |      |   |           |           | 
|Cash and cash equivalents |       | $    | 820,746   |           |      | $ | 209,897   |           |  | $ | 610,849 |          
|Fixed maturity securities |       |      | 2,987,703 |           |      |   | 2,236,526 |           |  |   | 751,177 |          
|Preferred stocks          |       |      | 8,186     |           |      |   | 3,676     |           |  |   | 4,510   |          
|Short-term investments    |       |      | 8,793     |           |      |   |          |           |  |   | 8,793   |          
|                          |       |      |           |           |      |   |           |           | 
|                          | Total |      | $         | 3,825,428 |      |   | $         | 2,450,099 |  |   | $       | 1,375,329 | 
|                          |       |      |           |           |      |   |           |           | 











| |                     
| | --------------------
| | Sources of Liquidity



64



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65



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66



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| |                       
| | ----------------------
| | Liquidity Requirements















67



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| |                    
| | -------------------
| | Economic Conditions





| |                     
| | --------------------
| | Capital Expenditures



Off-Balance Sheet Arrangements




Contractual Obligations




|                                                   |                             |       |           |           |        |   |         |           |  |   |           |        |  |         |         |        |  |   |         |         | 
|-------------------------------------------------- | --------------------------- | ----- | --------- | --------- | ------ | - | ------- | --------- |  | - | --------- | ------ |  | ------- | ------- | ------ |  | - | ------- | ------- | 
|                                                   |                             |       |           | Less than |        |   |         |           |  |   | More than |       
|Contractual Obligations                            |                             | Total |           |           | 1 Year |   |         | 1-3 Years |  |   | 3-5 Years |        |  | 5 Years |        
|                                                   |                             |       |           |           |        |   |         |           |  |   |           |        |  |         |        
|Series B Remarketed Notes due November 16, 2007(1) |                             | $     | 42,840    |           |        | $ |        |           |  | $ | 42,840    |        |  | $       |        |        |  | $ |        |        
|Series B Notes due June 1, 2017(1)                 |                             |       | 250,000   |           |        |   |        |           |  |   |          |        |  |         |        |        |  |   | 250,000 |        
|Scheduled interest payments                        |                             |       | 221,083   |           |        |   | 21,479  |           |  |   | 40,229    |        |  |         | 37,500  |        |  |   | 121,875 |        
|                                                   |                             |       |           |           |        |   |         |           |  |   |           |        |  |         |        
|                                                   | Subtotal  Debt Obligations |       |           | 513,923   |        |   |         | 21,479    |  |   |           | 83,069 |  |         |         | 37,500 |  |   |         | 371,875 | 
|Operating Leases(2)                                |                             |       | 14,950    |           |        |   | 2,347   |           |  |   | 5,758     |        |  |         | 5,878   |        |  |   | 967     |        
|Gross unpaid losses and LAE(3)                     |                             | $     | 2,323,990 |           |        | $ | 913,529 |           |  | $ | 642,148   |        |  | $       | 355,096 |        |  | $ | 413,217 |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See note 5 of the Notes to the Consolidated Financial
    Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | See note 12 of the Notes to the Consolidated Financial
    Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | There are generally no stated amounts related to reinsurance
    contracts. Both the amounts and timing of future loss and LAE
    payments are estimates and subject to the inherent variability
    of legal and market conditions affecting the obligations and
    make the timing of cash outflows uncertain. The ultimate amount
    and timing of unpaid losses and LAE could differ materially from
    the amounts in the table above. Further, the gross unpaid losses
    and LAE do not represent all of the obligations that will arise
    under the contracts, but rather only the estimated liability
    incurred through December 31, 2005. There are reinsurance
    contracts that have terms extending into 2006 under which
    additional obligations will be incurred.

Current Outlook






68



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non-U.S.


excess-of excess-of excess-of excess-of excess-of








non-U.S.


69



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|         |                                                           
|-------- | ----------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market Risk

Market and Credit Risk








Interest Rate Risk




70



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##### Table of Contents





|                                                  |  |                                     |           |   |         |   |           |         |  |   |           |   |  |          |           |    |  |   |           |  
|------------------------------------------------- |  | ----------------------------------- | --------- | - | ------- | - | --------- | ------- |  | - | --------- | - |  | -------- | --------- | -- |  | - | --------- | -
|                                                  |  | Interest Rate Shift in Basis Points |          
|                                                  |  |                                     |          
|                                                  |  | - 100 bp                            |           |   | - 50 bp |   |           | Current |  |   | + 50 bp   |   |  | + 100 bp |          
|                                                  |  |                                     |           |   |         |   |           |         |  |   |           |   |  |          |          
|Total market value                                |  | $                                   | 3,090,810 |   |         | $ | 3,039,914 |         |  | $ | 2,987,703 |   |  | $        | 2,934,687 |    |  |   | 2,881,433 |  
|Percent change in market value                    |  |                                     | 3.5       | % |         |   | 1.7       | %       |  |   |          |   |  |          | (1.8      | )% |  |   | (3.6%     | )
|Resulting unrealized appreciation/ (depreciation) |  | $                                   | 55,517    |   |         | $ | 4,621     |         |  | $ | (47,590   | ) |  | $        | (100,606  | )  |  | $ | (153,860  | )

Foreign Currency Risk




Sources of Fair Value




|                       |                           |          |   |           |            |  |   |           | 
|---------------------- | ------------------------- | -------- | - | --------- | ---------- |  | - | --------- | 
|                       |                           | Carrying |   |           |           
|                       |                           | Amount   |   |           | Fair Value | 
|                       |                           |          |   |           |            | 
|Financial assets:      |                           |          |   |           |            |  |   |          
|                       | Fixed maturity securities |          | $ | 2,987,703 |            |  | $ | 2,987,703 | 
|                       | Preferred stocks          |          |   | 8,186     |            |  |   | 8,186     | 
|                       | Other invested asset      |          |   | 5,000     |            |  |   | 5,000     | 
|                       | Short-term investments    |          |   | 8,793     |            |  |   | 8,793     | 
|Financial liabilities: |                           |          |   |           |            |  |   |          
|                       | Debt obligations          |          | $ | 292,840   |            |  | $ | 296,708   | 








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data



71



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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With Accountants on Accounting
    and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Disclosure Controls and Procedures


13a-15(e) 15d-15(e)


Managements Report on Internal Control Over Financial
Reporting


13a-15(f)




Attestation Report of Independent Registered Public
Accounting Firm




Changes in Internal Control over Financial Reporting




72



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




















| |             
| | ------------
| | /s/ KPMG LLP





73



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##### Table of Contents






Item 9B.     Other
Information







PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant



Code of Ethics


S-K 8-K,







|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Shareholder Matters








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



74



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PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

Financial Statements




Schedules Supporting Financial Statements


S-X.


Exhibits


|        |         |             |  |                                                                                                                                                                                                       
|------- | ------- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         |            
|Number  |         | Description
|        |         |            
|        | 1       | .1          |  | Jurisdiction Agreement dated May 20, 2005 among Platinum
    Holdings, Platinum Finance and Goldman, Sachs & Co.(15)                                                                                  
|        | 1       | .2          |  | Exchange and Registration Rights Agreement dated May 26,
    2005 among Platinum Holdings, Platinum Finance and Goldman,
    Sachs & Co.(16)                                                          
|        | 1       | .3          |  | Jurisdiction Agreement dated August 8, 2005 among Platinum
    Holdings, Platinum Finance, Goldman, Sachs & Co. and
    Merrill Lynch.(18)                                                            
|        | 1       | .4          |  | Exchange and Registration Rights Agreement dated August 16,
    2005 between Platinum Holdings, Platinum Finance, and Goldman,
    Sachs & Co. and Merrill Lynch.(19)                                 
|        | 1       | .5          |  | Jurisdiction Agreement dated September 21, 2005 between
    Platinum Holdings and Merrill Lynch.(20)                                                                                                  
|        | 1       | .6          |  | Underwriting Agreement dated September 21, 2005 between
    Platinum Holdings and Merrill Lynch.(20)                                                                                                  
|        | 1       | .7          |  | Preferred Shares Jurisdiction Agreement dated November 30,
    2005 by Platinum Holdings and Merrill Lynch.(25)                                                                                       
|        | 1       | .8          |  | Common Shares Jurisdiction Agreement dated November 30,
    2005 among Platinum Holdings, RenaissanceRe and Merrill
    Lynch.(25)                                                                    
|        | 1       | .9          |  | Preferred Shares Underwriting Agreement dated November 30,
    2005 by Platinum Holdings and Merrill Lynch.(25)                                                                                       
|        | 1       | .10         |  | Common Shares Underwriting Agreement dated November 30,
    2005 among Platinum Holdings, RenaissanceRe and Merrill
    Lynch.(25)                                                                    
|        | 1       | .11         |  | Transfer Restrictions, Registration Rights and Standstill
    Agreement dated November 1, 2002 between Platinum Holdings
    and Renaissance Re.(2)                                                   
|        | 1       | .12         |  | Amendment No. 1 dated December 5, 2005 to the Transfer
    Restrictions, Registration Rights and Standstill Agreement dated
    November 1, 2002 between Platinum Holdings and Renaissance
    Re.(25)
|        | 2       | .1          |  | Formation and Separation Agreement dated October 28, 2002
    between The St. Paul Companies, Inc. and Platinum Holdings.(2)                                                                          
|        | 3(i).1  |             |  | Memorandum of Association of Platinum Holdings.(1)                                                                                                                                                    
|        | 3(ii).1 |             |  | Bye-Laws of Platinum Holdings.(7)                                                                                                                                                                     
|        | 3(ii).2 |             |  | Certificate of Designation of 6% Series A Mandatory
    Convertible Preferred Shares of Platinum Holdings dated
    December 1, 2005.(25)                                                             
|        | 4       | .1          |  | Form of Certificate of the Common Shares of Platinum Holdings.(2)                                                                                                                                     

75



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|        |    |             |  |                                                                                                                                                                                     
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .2          |  | Indenture dated October 10, 2002 among Platinum Holdings,
    Platinum Finance and JP Morgan Chase.(2)                                                                              
|        | 4  | .3          |  | Indenture Supplement dated November 1, 2002 among Platinum
    Holdings, Platinum Finance and JP Morgan Chase.(2)                                                                   
|        | 4  | .4          |  | Indenture dated May 26, 2005 between Platinum Holdings,
    Platinum Finance and JP Morgan Chase.(16)                                                                               
|        | 4  | .5          |  | First Supplemental Indenture dated May 26, 2005 between
    Platinum Holdings, Platinum Finance and JP Morgan Chase.(16)                                                            
|        | 4  | .6          |  | Second Supplemental Indenture dated August 16, 2005 between
    Platinum Holdings, Platinum Finance and JP Morgan Chase.(19)                                                        
|        | 4  | .7          |  | Remarketing Agreement dated August 8, 2005 among Platinum
    Holdings, Platinum Finance, Goldman, Sachs & Co. and
    Merrill Lynch.(18)                                           
|        | 4  | .8          |  | Second Supplemental Indenture dated as of November 2, 2005
    among Platinum Finance, Platinum Holdings and JP Morgan
    Chase.(23)                                               
|        | 4  | .9          |  | Purchase Contract Agreement dated November 1, 2002 between
    Platinum Holdings and JP Morgan Chase.(2)                                                                            
|        | 4  | .10         |  | Purchase Agreement dated May 20, 2005 among Platinum
    Holdings, Platinum Finance and Goldman, Sachs & Co.(15)                                                                    
|        | 4  | .11         |  | Pledge Agreement dated November 1, 2002 among Platinum
    Holdings, State Street Bank and Trust Company and JP Morgan
    Chase.(2)                                                
|        | 4  | .12         |  | Form of Senior Note of Platinum Finance.(2)                                                                                                                                         
|        | 4  | .13         |  | Form of Guarantee of Platinum Holdings.(2)                                                                                                                                          
|        | 10 | .1*         |  | Share Unit Plan for Non-Employee Directors.(2)                                                                                                                                      
|        | 10 | .2*         |  | Summary of Director Compensation                                                                                                                                                    
|        | 10 | .3*         |  | 2002 Share Incentive Plan (2004 Update).(6)                                                                                                                                         
|        | 10 | .4*         |  | 2002 Share Incentive Plan (UK Sub-Plan).(6)                                                                                                                                         
|        | 10 | .5*         |  | Amended and Restated Annual Incentive Plan.(26)                                                                                                                                     
|        | 10 | .6*         |  | Section 162(m) Performance Incentive Plan.(6)                                                                                                                                       
|        | 10 | .7*         |  | Executive Retirement Savings Plan.(6)                                                                                                                                               
|        | 10 | .8*         |  | Executive Bonus Deferral Plan.(6)                                                                                                                                                   
|        | 10 | .9*         |  | Amended and Restated Executive Incentive Plan.(26)                                                                                                                                  
|        | 10 | .10*        |  | Capital Accumulation Plan.(2)                                                                                                                                                       
|        | 10 | .11*        |  | Form of Nonqualified Share Option Agreement (Employee).(10)                                                                                                                         
|        | 10 | .12*        |  | Form of Nonqualified Share Option Agreement (New Nonemployee
    Director).(10)                                                                                                     
|        | 10 | .13*        |  | Form of Nonqualified Share Option Agreement (Annual Nonemployee
    Director). (10)                                                                                                 
|        | 10 | .14*        |  | Form of Time-Based Share Unit Award Agreement.(10)                                                                                                                                  
|        | 10 | .15*        |  | Form of Special Share Unit Award Agreement.(10)                                                                                                                                     
|        | 10 | .16*        |  | Form of Restricted Share Award Agreement.(10)                                                                                                                                       
|        | 10 | .17*        |  | Form of Nonemployee Director Share Unit Award Agreement.(26)                                                                                                                        
|        | 10 | .18*        |  | Form of EIP Share Unit Award Agreement.(26)                                                                                                                                         
|        | 10 | .19*        |  | Employment Agreement dated as of November 1, 2005 between
    Platinum Holdings and Michael E. Lombardozzi(24)                                                                      
|        | 10 | .20*        |  | Amended Letter Agreement dated October 27, 2005 to the
    Letter Agreement between Platinum Holdings and Steven H. Newman
    dated March 1, 2002, as amended on June 14, 2002.(22)
|        | 10 | .21*        |  | Amended Consulting Agreement dated October 27, 2005 between
    Steven H. Newman and SHN Enterprises, Inc. and Platinum US.(22)                                                     

76



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|        |    |             |  |                                                                                                                                                                                 
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .22*        |  | Amendment dated April 27, 2005 to the Consulting Agreement
    dated March 1, 2002 between Steven H. Newman and The St.
    Paul Companies, Inc. and assumed by Platinum US.(12)
|        | 10 | .23*        |  | Employment Agreement dated August 4, 2004 between Michael
    D. Price and Platinum US.(7)                                                                                      
|        | 10 | .24*        |  | Amended and Restated Letter Agreement dated February 26,
    2006 between Platinum Holdings and Gregory E.A. Morrison.(26)                                                      
|        | 10 | .25*        |  | Employment Agreement dated February 26, 2006 between
    Platinum Bermuda and Robert S. Porter.(26)                                                                             
|        | 10 | .26         |  | Securities Purchase Agreement dated July 20, 2003 between
    Gregory E. A. Morrison and Platinum Holdings. (3)                                                                 
|        | 10 | .27*        |  | Employment Agreement dated June 24, 2004 between Joseph F.
    Fisher and Platinum Holdings.(7)                                                                                 
|        | 10 | .28*        |  | Employment Agreement dated June 24, 2004 between H.
    Elizabeth Mitchell and Platinum US.(7)                                                                                  
|        | 10 | .29         |  | Capital Support Agreement dated November 1, 2002 between
    Platinum Holdings and Platinum UK.(2)                                                                              
|        | 10 | .30         |  | Capital Support Agreement dated November 26, 2002 between
    Platinum Holdings and Platinum US.(2)                                                                             
|        | 10 | .31         |  | Option Agreement dated November 1, 2002 between St. Paul
    and Platinum Holdings.(2)                                                                                          
|        | 10 | .32         |  | Amendment dated January 10, 2005 to the Option Agreement
    dated November 1, 2002 among St. Paul Reinsurance Company
    Limited, Platinum Holdings and St. Paul.(9)          
|        | 10 | .33         |  | Amendment dated January 10, 2005 to the Option Agreement
    dated November 1, 2002 between St. Paul and Platinum
    Holdings.(9)                                              
|        | 10 | .34         |  | Investment Management Agreement dated May 12, 2005 between
    Platinum US and Hyperion Capital Management, Inc.(13)                                                            
|        | 10 | .35         |  | Investment Management Agreement dated May 12, 2005 between
    Platinum Bermuda and Hyperion Capital Management, Inc.(13)                                                       
|        | 10 | .36         |  | Investment Management Agreement dated May 12, 2005 between
    Platinum Holdings, Platinum Bermuda, Platinum Regency and
    BlackRock Financial Management, Inc.(13)           
|        | 10 | .37         |  | Investment Management Agreement dated May 12, 2005 between
    Platinum UK and BlackRock Financial Management, Inc.(13)                                                         
|        | 10 | .38         |  | Investment Management Agreement dated May 12, 2005 between
    Platinum US, Platinum Finance and BlackRock Financial
    Management, Inc.(13)                                   
|        | 10 | .39         |  | Investment Agreement dated September 20, 2002 among
    Platinum Holdings, St. Paul, and RenaissanceRe.(2)                                                                      
|        | 10 | .40         |  | First Amendment dated November 1, 2002 to the Investment
    Agreement dated September 20, 2002 among Platinum Holdings,
    St. Paul, and RenaissanceRe. (2)                   
|        | 10 | .41         |  | Option Agreement dated November 1, 2002 between Platinum
    Holdings and RenaissanceRe.(2)                                                                                     
|        | 10 | .42         |  | Amended and Restated Option Agreement dated November 18,
    2004 between Platinum Holdings and RenaissanceRe.(8)                                                               
|        | 10 | .43         |  | Services and Capacity Reservation Agreement dated
    November 1, 2002 between Platinum Holdings and
    RenaissanceRe.(2)                                                      
|        | 10 | .44         |  | Quota Share Retrocession Agreement dated November 26, 2002
    between Platinum Bermuda and Platinum UK.(2)                                                                     
|        | 10 | .45         |  | Quota Share Retrocession Agreement dated March 27, 2003
    between Platinum Bermuda and Platinum UK.(6)                                                                        
|        | 10 | .46         |  | Addendum No. 1 effective April 1, 2003 to the Quota
    Share Retrocession Agreement dated March 27, 2003, between
    Platinum Bermuda and Platinum UK.(6)                     
|        | 10 | .47         |  | Addendum No. 2 effective March 27, 2003 to the Quota
    Share Retrocession Agreement dated March 27, 2003, between
    Platinum Bermuda and Platinum UK.(6)                    

77



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|        |    |             |  |                                                                                                                                                                                                       
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .48         |  | Addendum No. 3 effective April 1, 2005 to the Quota
    Share Retrocession Agreement dated March 27, 2003 between
    Platinum Bermuda and Platinum UK.(11)                                           
|        | 10 | .49         |  | Security Agreement dated November 26, 2002 between Platinum
    Bermuda and Platinum UK.(2)                                                                                                           
|        | 10 | .50         |  | Addendum No. 1 effective January 1, 2004 to the
    Security Agreement dated November 26, 2002, between
    Platinum Bermuda and Platinum UK.(6)                                                      
|        | 10 | .51         |  | Control Agreement dated November 26, 2002 among Platinum
    Bermuda, Platinum UK and State Street Bank.(2)                                                                                           
|        | 10 | .52         |  | Discretionary Investment Advisory Agreement dated
    November 26, 2002 between Platinum Bermuda and Platinum
    UK.(2)                                                                              
|        | 10 | .53         |  | Trust Agreement effective January 1, 2003 among Platinum
    Bermuda, Platinum US and State Street Bank.(3)                                                                                           
|        | 10 | .54         |  | Quota Share Retrocession Agreement dated May 13, 2003
    between Platinum Bermuda and Platinum US.(3)                                                                                                
|        | 10 | .55         |  | Addendum No. 1 dated December 31, 2003 to the Quota
    Share Retrocession Agreement dated May 13, 2003, between
    Platinum Bermuda and Platinum US.(5)                                             
|        | 10 | .56         |  | Addendum No. 2 effective as of April 1, 2005 to the
    Quota Share Retrocession Agreement between Platinum Bermuda and
    Platinum US.(14)                                                          
|        | 10 | .57         |  | Quota Share Retrocession Agreement dated May 6, 2004
    between Platinum Bermuda and Platinum US.(7)                                                                                                 
|        | 10 | .58         |  | Excess of Loss Retrocession Agreement dated April 1, 2005
    between Platinum Bermuda and Platinum UK.(11)                                                                                           
|        | 10 | .59         |  | Excess of Loss Retrocession Agreement effective as of
    January 1, 2006 between Platinum US and Platinum UK.                                                                                        
|        | 10 | .60         |  | Credit Agreement dated October 21, 2005 by Platinum
    Holdings and Wachovia Bank.(21)                                                                                                               
|        | 10 | .61         |  | List of Contents of Exhibits and Schedules to Credit Agreement
    dated October 21, 2005 by Platinum Holdings and Wachovia
    Bank.(21)                                                             
|        | 10 | .62         |  | Referral Agreement between Platinum Bermuda and Renaissance
    Underwriting Managers Ltd.(3)                                                                                                         
|        | 10 | .63         |  | Referral Agreement between Platinum US and Renaissance
    Underwriting Managers Ltd.(5)                                                                                                              
|        | 10 | .64         |  | Guaranty dated December 31, 2003 between Platinum Holdings
    and Platinum US. (5)                                                                                                                   
|        | 10 | .65         |  | Amendment No. 1 dated July 14, 2005 to Guaranty dated
    December 31, 2003 between Platinum Holdings and Platinum
    US.(17)                                                                        
|        | 10 | .66         |  | Guarantee dated December 31, 2003 between Platinum Holdings
    and Platinum UK.(5)                                                                                                                   
|        | 21 | .1          |  | Subsidiaries of Platinum Holdings.                                                                                                                                                                    
|        | 23 | .1          |  | Independent Registered Public Accounting Firms Consent
    (New York, New York).                                                                                                                     
|        | 31 | .1          |  | Certification of Michael D. Price, Chief Executive Officer of
    Platinum Holdings, pursuant to Rule 13a-14(a) or
    Rule 15d-14(a) of the Securities Exchange Act of 1934, as
    amended.         
|        | 31 | .2          |  | Certification of Joseph F. Fisher, Chief Financial Officer of
    Platinum Holdings, pursuant to Rule 13a-14(a) or
    Rule 15d-14(a) of the Securities Exchange Act of 1934, as
    amended.         
|        | 32 | .1          |  | Certification of Michael D. Price, Chief Executive Officer of
    Platinum Holdings, pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to section 906 of the Sarbanes-Oxley
    Act of 2002.
|        | 32 | .2          |  | Certification of Joseph F. Fisher, Chief Financial Officer of
    Platinum Holdings, pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to section 906 of the Sarbanes-Oxley
    Act of 2002.






| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| | * | Items denoted with an asterisk represent management contracts or
    compensatory plans or arrangements.



|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference from the Registration Statement on
    Form S-1
    (Registration
    No. 333-86906) of
    Platinum Holdings.                                       
|   
|(2) | Incorporated by reference from Platinum Holdings Annual
    Report on
    Form 10-K for the
    year ended December 31, 2002, filed with the Commission on
    March 31, 2003.

78



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##### Table of Contents





|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Incorporated by reference from Platinum Holdings Quarterly
    Report on
    Form 10-Q for the
    quarter ended June 30, 2003, filed with the Commission on
    August 14, 2003.       
|   
|(4) | Incorporated by reference from Platinum Holdings Quarterly
    Report on
    Form 10-Q for the
    quarter ended September 30, 2003, filed with the Commission
    on November 14, 2003.
|   
|(5) | Incorporated by reference from Platinum Holdings Annual
    Report on
    Form 10-K for the
    year ended December 31, 2003, filed with the Commission on
    March 15, 2004.          



|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Incorporated by reference from Platinum Holdings Quarterly
    Report on
    Form 10-Q for the
    quarter ended March 31, 2004, filed with the Commission on
    May 10, 2004.



|    |                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Incorporated by reference from Platinum Holdings Quarterly
    Report on
    Form 10-Q for the
    quarter ended June 30, 2004, filed with the Commission on
    August 6, 2004.
|   
|(8) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on November 18, 2004.                                        
|   
|(9) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on January 11, 2005.                                         



|     |                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on February 23, 2005.                                      
|    
|(11) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on April 14, 2005.                                         
|    
|(12) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on April 28, 2005.                                         
|    
|(13) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on May 13, 2005.                                           
|    
|(14) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on May 18, 2005.                                           
|    
|(15) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on May 24, 2005.                                           
|    
|(16) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on May 27, 2005.                                           
|    
|(17) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 10-Q for the
    quarter ended June 30, 2005, filed with the Commission on
    August 5, 2005.
|    
|(18) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on August 9, 2005.                                         
|    
|(19) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on August 17, 2005.                                        
|    
|(20) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on September 22, 2005.                                     
|    
|(21) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on October 24, 2005.                                       
|    
|(22) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on October 28, 2005.                                       
|    
|(23) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on November 2, 2005.                                       

79



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##### Table of Contents





|     |                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------
|(24) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on November 21, 2005.
|    
|(25) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on December 6, 2005. 
|    
|(26) | Incorporated by reference from Platinum Holdings Current
    Report on
    Form 8-K, filed
    with the Commission on February 27, 2006.

80



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##### Table of Contents






SIGNATURES






| |                                         
| | ----------------------------------------
| | Platinum Underwriters
    Holdings, Ltd.
|
| | /s/ Michael D. Price                    
| |                                         
| | Michael D. Price                        
| | President and Chief Executive Officer   





|                                                   |  |                                                                                                               |  |                   |  | 
|-------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | ----------------- |  | 
|Signature                                          |  | Title                                                                                                         |  | Date             
|                                                   |  |                                                                                                               |  |                  
|                                                  
|/s/ Michael D. PriceMichael D. Price               |  | President, Chief Executive Officer and Director
    (Principal Executive Officer)                             |  | February 26, 2006
|                                                  
|/s/ Joseph F. FisherJoseph F. Fisher               |  | Executive Vice President and
    Chief Financial Officer
    (Principal Financial and
    Accounting Officer) |  | February 26, 2006
|                                                  
|/s/ Steven H. NewmanSteven H. Newman               |  | Chairman of the Board of Directors                                                                            |  | February 26, 2006
|                                                  
|/s/ H. Furlong BaldwinH. Furlong Baldwin           |  | Director                                                                                                      |  | February 26, 2006
|                                                  
|/s/ Jonathan F. BankJonathan F. Bank               |  | Director                                                                                                      |  | February 26, 2006
|                                                  
|/s/ Dan R. CarmichaelDan R. Carmichael             |  | Director                                                                                                      |  | February 26, 2006
|                                                  
|/s/ Robert V. DeutschRobert V. Deutsch             |  | Director                                                                                                      |  | February 26, 2006
|                                                  
|/s/ Gregory E.A.
    MorrisonGregory E.A. Morrison |  | Vice Chairman and Director                                                                                    |  | February 26, 2006
|                                                  
|/s/ Peter T. PruittPeter T. Pruitt                 |  | Director                                                                                                      |  | February 26, 2006

81



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


CONSOLIDATED FINANCIAL STATEMENTS


TABLE OF CONTENTS PAGE


|                                                                                                                                   |  |      |     | 
|---------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                   |  | Page |    
|                                                                                                                                   |  |      |    
|Report of Independent Registered Public
    Accounting Firm                                                                        |  |      | F-2 | 
|Consolidated Balance Sheets as of
    December 31, 2005 and 2004                                                                   |  |      | F-3 | 
|Consolidated Statements of Operations and
    Comprehensive Income (Loss) for the years ended
    December 31, 2005, 2004 and 2003 |  |      | F-4 | 
|Consolidated Statements of
    Shareholders Equity for the years ended December 31,
    2005, 2004 and 2003                       |  |      | F-5 | 
|Consolidated Statements of Cash Flows for
    the years ended December 31, 2005, 2004 and 2003                                     |  |      | F-6 | 
|Notes to Consolidated Financial
    Statements                                                                                     |  |      | F-7 | 

F-1



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |         
| | --------
| | KPMG LLP





F-2



---



##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


December 31, 2005 and 2004


(amounts in thousands, except share data)


|                                                                         |                                                                                                                                             |                                            |         |           |           |  |         |           |           | 
|------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | --------- | --------- |  | ------- | --------- | --------- | 
|                                                                         |                                                                                                                                             | 2005                                       |         |           | 2004      | 
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|ASSETS                                                                  
|Investments:                                                             |                                                                                                                                             |                                            |         |           |           |  |         |          
|                                                                         | Fixed maturity available-for-sale securities at fair value
    (amortized cost  $2,936,152 and $2,140,540,
    respectively)               |                                            | $       | 2,888,922 |           |  | $       | 2,153,853 |          
|                                                                         | Fixed maturity trading securities at fair value (amortized
    cost  $99,141 and $82,931, respectively)                                    |                                            |         | 98,781    |           |  |         | 82,673    |          
|                                                                         | Preferred stocks (cost  $8,735 and $3,750,
    respectively)                                                                               |                                            |         | 8,186     |           |  |         | 3,676     |          
|                                                                         | Other invested asset                                                                                                                        |                                            |         | 5,000     |           |  |         | 6,769     |          
|                                                                         | Short-term investments                                                                                                                      |                                            |         | 8,793     |           |  |         |          |          
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                         |                                                                                                                                             | Total investments                          |         |           | 3,009,682 |  |         |           | 2,246,971 | 
|Cash and cash equivalents                                                |                                                                                                                                             |                                            | 820,746 |           |           |  | 209,897 |          
|Accrued investment income                                                |                                                                                                                                             |                                            | 29,230  |           |           |  | 23,663  |          
|Reinsurance premiums receivable                                          |                                                                                                                                             |                                            | 567,449 |           |           |  | 580,048 |          
|Reinsurance recoverable on ceded losses and loss adjustment
    expenses |                                                                                                                                             |                                            | 68,210  |           |           |  | 2,005   |          
|Prepaid reinsurance premiums                                             |                                                                                                                                             |                                            | 7,899   |           |           |  | 2,887   |          
|Funds held by ceding companies                                           |                                                                                                                                             |                                            | 291,629 |           |           |  | 198,048 |          
|Deferred acquisition costs                                               |                                                                                                                                             |                                            | 130,800 |           |           |  | 136,038 |          
|Income tax recoverable                                                   |                                                                                                                                             |                                            | 24,522  |           |           |  | 1,325   |          
|Deferred tax assets                                                      |                                                                                                                                             |                                            | 31,934  |           |           |  | 8,931   |          
|Due from investment broker                                               |                                                                                                                                             |                                            | 157,930 |           |           |  |        |          
|Other assets                                                             |                                                                                                                                             |                                            | 14,344  |           |           |  | 12,182  |          
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                         |                                                                                                                                             | Total assets                               |         | $         | 5,154,375 |  |         | $         | 3,421,995 | 
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                        
|LIABILITIES AND SHAREHOLDERS EQUITY                                    
|                                                                        
|Liabilities                                                              |                                                                                                                                             |                                            |         |           |           |  |         |          
|                                                                         | Unpaid losses and loss adjustment expenses                                                                                                  |                                            | $       | 2,323,990 |           |  | $       | 1,380,955 |          
|                                                                         | Unearned premiums                                                                                                                           |                                            |         | 502,018   |           |  |         | 502,423   |          
|                                                                         | Reinsurance deposit liabilities                                                                                                             |                                            |         | 6,048     |           |  |         | 20,189    |          
|                                                                         | Debt obligations                                                                                                                            |                                            |         | 292,840   |           |  |         | 137,500   |          
|                                                                         | Ceded premiums payable                                                                                                                      |                                            |         | 22,544    |           |  |         | 2,384     |          
|                                                                         | Commissions payable                                                                                                                         |                                            |         | 186,654   |           |  |         | 181,925   |          
|                                                                         | Funds withheld                                                                                                                              |                                            |         |          |           |  |         | 11,999    |          
|                                                                         | Deferred tax liabilities                                                                                                                    |                                            |         | 118       |           |  |         | 10,404    |          
|                                                                         | Due to investment broker                                                                                                                    |                                            |         | 259,834   |           |  |         | 404       |          
|                                                                         | Other liabilities                                                                                                                           |                                            |         | 20,080    |           |  |         | 40,809    |          
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                         |                                                                                                                                             | Total liabilities                          |         |           | 3,614,126 |  |         |           | 2,288,992 | 
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|Shareholders Equity                                                     |                                                                                                                                             |                                            |         |           |           |  |         |          
|                                                                         | Preferred shares, $.01 par value, 25,000,000 shares
    authorized, 5,750,000 and 0 shares issued and outstanding,
    respectively         |                                            |         | 57        |           |  |         |          |          
|                                                                         | Common shares, $.01 par value, 200,000,000 shares
    authorized, 59,126,675 and 43,087,407 shares issued and
    outstanding, respectively |                                            |         | 590       |           |  |         | 430       |          
|                                                                         | Additional paid-in capital                                                                                                                  |                                            |         | 1,527,316 |           |  |         | 911,851   |          
|                                                                         | Unearned share grant compensation                                                                                                           |                                            |         | (2,467    | )         |  |         |          |          
|                                                                         | Accumulated other comprehensive income (loss)                                                                                               |                                            |         | (40,718   | )         |  |         | 12,252    |          
|                                                                         | Retained earnings                                                                                                                           |                                            |         | 55,471    |           |  |         | 208,470   |          
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                         |                                                                                                                                             | Total shareholders equity                 |         |           | 1,540,249 |  |         |           | 1,133,003 | 
|                                                                         |                                                                                                                                             |                                            |         |           |           | 
|                                                                         |                                                                                                                                             | Total liabilities and shareholders equity |         | $         | 5,154,375 |  |         | $         | 3,421,995 | 
|                                                                         |                                                                                                                                             |                                            |         |           |           | 



F-3



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)


For the years ended December 31, 2005, 2004 and 2003


(amounts in thousands, except share data)


|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |           |       |           | 
|--------------------------------- | -------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------------------------------- | --------- | ------- | --------- | ------ | --------- | ------ | --------- | ------ | --------- | ----- | --------- | 
|                                  |                                              | 2005                                                                                                |                                                    |           | 2004    |           |        | 2003      |       
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|Revenue:                          |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |          
|                                  | Net premiums earned                          |                                                                                                     | $                                                  | 1,714,723 |         |           | $      | 1,447,935 |        |           | $      | 1,067,527 |      
|                                  | Net investment income                        |                                                                                                     |                                                    | 129,445   |         |           |        | 84,532    |        |           |        | 57,645    |      
|                                  | Net realized gains (losses) on investments   |                                                                                                     |                                                    | (3,046    | )       |           |        | 1,955     |        |           |        | 2,781     |      
|                                  | Other income (expense)                       |                                                                                                     |                                                    | (586      | )       |           |        | 3,211     |        |           |        | 3,343     |      
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Total revenue                                      |           |         | 1,840,536 |        |           |        | 1,537,633 |        |           |       | 1,131,296 | 
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|Expenses:                         |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |          
|                                  | Losses and loss adjustment expenses          |                                                                                                     |                                                    | 1,505,425 |         |           |        | 1,019,804 |        |           |        | 584,171   |      
|                                  | Acquisition expenses                         |                                                                                                     |                                                    | 403,135   |         |           |        | 327,821   |        |           |        | 251,226   |      
|                                  | Operating expenses                           |                                                                                                     |                                                    | 69,827    |         |           |        | 66,333    |        |           |        | 92,595    |      
|                                  | Net foreign currency exchange losses (gains) |                                                                                                     |                                                    | 2,111     |         |           |        | (725      | )      |           |        | 114       |      
|                                  | Interest expense                             |                                                                                                     |                                                    | 20,006    |         |           |        | 9,268     |        |           |        | 9,492     |      
|                                  | Loss on repurchase of debt                   |                                                                                                     |                                                    | 2,486     |         |           |        |          |        |           |        |          |      
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Total expenses                                     |           |         | 2,002,990 |        |           |        | 1,422,501 |        |           |       | 937,598   | 
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Income (loss) before income tax expense (benefit)  |           |         | (162,454  | )      |           |        | 115,132   |        |           |       | 193,698   | 
|Income tax expense (benefit)      |                                              |                                                                                                     | (24,967                                            | )         |         |           | 30,349 |           |        |           | 48,875 |          
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Net income (loss)                                  |           |         | (137,487  | )      |           |        | 84,783    |        |           |       | 144,823   | 
|Preferred dividends               |                                              |                                                                                                     | 737                                                |           |         |           |       |           |        |           |       |          
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Net income (loss) available to common shareholders |           | $       | (138,224  | )      |           | $      | 84,783    |        |           | $     | 144,823   | 
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|Earnings (loss) per common share: |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |          
|                                  | Basic earnings (loss) per common share       |                                                                                                     | $                                                  | (3.01     | )       |           | $      | 1.96      |        |           | $      | 3.37      |      
|                                  | Diluted earnings (loss) per common share     |                                                                                                     | $                                                  | (3.01     | )       |           | $      | 1.81      |        |           | $      | 3.09      |      
|Comprehensive income (loss):      |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |          
|                                  | Net income (loss)                            |                                                                                                     | $                                                  | (137,487  | )       |           | $      | 84,783    |        |           | $      | 144,823   |      
|                                  | Other comprehensive income (loss):           |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |           |      
|                                  |                                              | Net change in unrealized gains and losses on available-for-sale
    securities, net of deferred tax |                                                    |           | (52,454 | )         |        |           | (6,910 | )         |        |           | 7,570 |          
|                                  |                                              | Cumulative translation adjustments, net of deferred tax                                             |                                                    |           | (516    | )         |        |           | 388    |           |        |           | 623   |          
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|                                  |                                              |                                                                                                     | Comprehensive income (loss)                        |           | $       | (190,457  | )      |           | $      | 78,261    |        |           | $     | 153,016   | 
|                                  |                                              |                                                                                                     |                                                    |           |         |           |        |           |       
|Shareholder dividends:            |                                              |                                                                                                     |                                                    |           |         |           |        |           |        |           |        |          
|                                  | Dividends declared                           |                                                                                                     | $                                                  | 14,775    |         |           | $      | 13,807    |        |           | $      | 13,767    |      
|                                  | Dividends declared per common share          |                                                                                                     | $                                                  | 0.32      |         |           | $      | 0.32      |        |           | $      | 0.32      |      



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


For the years ended December 31, 2005, 2004 and 2003


(amounts in thousands)


|                                               |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |         |           | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------- | - | -------- | --------- | - | - | ------- | --------- |  | - | ------- | --------- | 
|                                               |                                                                                                     | 2005                       |   |          | 2004      |   |   | 2003    |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Preferred shares:                              |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            | $ |         |           |   | $ |        |           |  | $ |        |          
|                                               | Issuance of preferred shares                                                                        |                            |   | 57       |           |   |   |        |           |  |   |        |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | 57        |   |   |         |          |  |   |         |          | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Common shares:                                 |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            |   | 430      |           |   |   | 430     |           |  |   | 430     |          
|                                               | Exercise of share options                                                                           |                            |   | 7        |           |   |   | 2       |           |  |   |        |          
|                                               | Issuance of restricted shares and shares for share units                                            |                            |   | 1        |           |   |   |        |           |  |   |        |          
|                                               | Issuance of common shares                                                                           |                            |   | 152      |           |   |   | 1       |           |  |   |        |          
|                                               | Purchase of common shares                                                                           |                            |   |         |           |   |   | (3      | )         |  |   |        |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | 590       |   |   |         | 430       |  |   |         | 430       | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Additional paid-in-capital:                    |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            |   | 911,851  |           |   |   | 910,505 |           |  |   | 903,797 |          
|                                               | Exercise of share options                                                                           |                            |   | 15,020   |           |   |   | 7,405   |           |  |   | 678     |          
|                                               | Issuance of restricted shares and shares for share units                                            |                            |   | 3,274    |           |   |   |        |           |  |   |        |          
|                                               | Share based compensation                                                                            |                            |   | 3,516    |           |   |   | 2,358   |           |  |   | 5,510   |          
|                                               | Issuance of common shares                                                                           |                            |   | 425,604  |           |   |   | 1,565   |           |  |   | 520     |          
|                                               | Issuance of preferred shares                                                                        |                            |   | 167,451  |           |   |   |        |           |  |   |        |          
|                                               | Purchase of common shares                                                                           |                            |   |         |           |   |   | (9,982  | )         |  |   |        |          
|                                               | Tax benefit of share options                                                                        |                            |   | 600      |           |   |   |        |           |  |   |        |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | 1,527,316 |   |   |         | 911,851   |  |   |         | 910,505   | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Unearned share grant compensation:             |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            |   |         |           |   |   |        |           |  |   |        |          
|                                               | Shares issued                                                                                       |                            |   | (3,275   | )         |   |   |        |           |  |   |        |          
|                                               | Amortization                                                                                        |                            |   | 808      |           |   |   |        |           |  |   |        |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | (2,467    | ) |   |         |          |  |   |         |          | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Accumulated other comprehensive income (loss): |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            |   | 12,252   |           |   |   | 18,774  |           |  |   | 10,581  |          
|                                               | Net change in unrealized gains and losses on available-for-sale
    securities, net of deferred tax |                            |   | (52,454  | )         |   |   | (6,910  | )         |  |   | 7,570   |          
|                                               | Net change in cumulative translation adjustments, net of
    deferred tax                           |                            |   | (516     | )         |   |   | 388     |           |  |   | 623     |          
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | (40,718   | ) |   |         | 12,252    |  |   |         | 18,774    | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|Retained earnings:                             |                                                                                                     |                            |   |          |           |   |   |         |           |  |   |        
|                                               | Balances at beginning of year                                                                       |                            |   | 208,470  |           |   |   | 137,494 |           |  |   | 6,438   |          
|                                               | Net income (loss)                                                                                   |                            |   | (137,487 | )         |   |   | 84,783  |           |  |   | 144,823 |          
|                                               | Preferred share dividends                                                                           |                            |   | (737     | )         |   |   |        |           |  |   |        |          
|                                               | Common share dividends                                                                              |                            |   | (14,775  | )         |   |   | (13,807 | )         |  |   | (13,767 | )        
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Balances at end of year    |   |          | 55,471    |   |   |         | 208,470   |  |   |         | 137,494   | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          
|                                               |                                                                                                     | Total shareholders equity |   | $        | 1,540,249 |   |   | $       | 1,133,003 |  |   | $       | 1,067,203 | 
|                                               |                                                                                                     |                            |   |          |           |   |   |         |          



F-5



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


For the years ended December 31, 2005, 2004 and 2003


(amounts in thousands)


|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |            |         |          |          |  
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------------------- | ------- | ------- | -------- | ---------- | ------ | -------- | -------- | ---------- | ------- | -------- | -------- | -
|                                                   |                                                                                                                                          | 2005                                         |                                                            |                                                      | 2004    |         |          | 2003       |       
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|Operating Activities:                              |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |           
|                                                   | Net income (loss)                                                                                                                        |                                              | $                                                          | (137,487                                             | )       |         | $        | 84,783     |        |          | $        | 144,823    |        
|                                                   | Adjustments to reconcile net income to cash used in operations:                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |            |        
|                                                   |                                                                                                                                          | Depreciation and amortization                |                                                            |                                                      | 14,993  |         |          |            | 20,642 |          |          |            | 23,321  |         
|                                                   |                                                                                                                                          | Net realized (gains) losses on investments   |                                                            |                                                      | 3,046   |         |          |            | (1,955 | )        |          |            | (2,781  | )       
|                                                   |                                                                                                                                          | Loss on repurchase of debt                   |                                                            |                                                      | 2,486   |         |          |            |       |          |          |            |        |         
|                                                   |                                                                                                                                          | Net foreign currency exchange (gains) losses |                                                            |                                                      | 2,111   |         |          |            | (725   | )        |          |            | 114     |         
|                                                   |                                                                                                                                          | Share based compensation                     |                                                            |                                                      | 4,424   |         |          |            | 2,358  |          |          |            | 5,510   |         
|                                                   |                                                                                                                                          | Deferred income tax expense (benefit)        |                                                            |                                                      | (24,590 | )       |          |            | 2,216  |          |          |            | (7,806  | )       
|                                                   |                                                                                                                                          | Trading securities activities                |                                                            |                                                      | (21,235 | )       |          |            | 16,510 |          |          |            | (85,861 | )       
|                                                   |                                                                                                                                          | Changes in assets and liabilities:           |                                                            |                                                      |         |         |          |            |        |          |          |            |         |         
|                                                   |                                                                                                                                          |                                              | Increase in accrued investment income                      |                                                      |         | (5,567  | )        |            |        | (6,171   | )        |            |         | (7,499   | )       
|                                                   |                                                                                                                                          |                                              | (Increase) decrease in reinsurance premiums receivable     |                                                      |         | 12,599  |          |            |        | (92,607  | )        |            |         | (481,843 | )       
|                                                   |                                                                                                                                          |                                              | Decrease in amounts receivable from St. Paul               |                                                      |         |        |          |            |        |         |          |            |         | 54,096   |         
|                                                   |                                                                                                                                          |                                              | Increase in funds held by ceding companies                 |                                                      |         | (93,581 | )        |            |        | (132,988 | )        |            |         | (10,158  | )       
|                                                   |                                                                                                                                          |                                              | (Increase) decrease in deferred acquisition costs          |                                                      |         | 5,238   |          |            |        | (56,731  | )        |            |         | (29,975  | )       
|                                                   |                                                                                                                                          |                                              | Increase in net unpaid losses and loss adjustment expenses |                                                      |         | 887,563 |          |            |        | 641,062  |          |            |         | 440,859  |         
|                                                   |                                                                                                                                          |                                              | Increase (decrease) in net unearned premiums               |                                                      |         | (5,417  | )        |            |        | 199,680  |          |            |         | 108,840  |         
|                                                   |                                                                                                                                          |                                              | Increase (decrease) in reinsurance deposit liabilities     |                                                      |         | (14,141 | )        |            |        | 14,490   |          |            |         | (17,962  | )       
|                                                   |                                                                                                                                          |                                              | Increase (decrease) in ceded premiums payable              |                                                      |         | 20,160  |          |            |        | (3,821   | )        |            |         | 6,205    |         
|                                                   |                                                                                                                                          |                                              | Increase in commissions payable                            |                                                      |         | 4,729   |          |            |        | 5,615    |          |            |         | 138,749  |         
|                                                   |                                                                                                                                          |                                              | Increase (decrease) in funds withheld                      |                                                      |         | (11,999 | )        |            |        | 11,999   |          |            |         |         |         
|                                                   |                                                                                                                                          |                                              | (Increase) decrease in income tax recoverable              |                                                      |         | (22,595 | )        |            |        | 8,035    |          |            |         | (9,231   | )       
|                                                   |                                                                                                                                          |                                              | Changes in other assets and liabilities                    |                                                      |         | (23,598 | )        |            |        | 1,944    |          |            |         | 4,943    |         
|                                                   | Cash from St. Paul related to the November 1, 2002
    assumption of liabilities on reinsurance contracts becoming
    effective in 2002 |                                              |                                                            |                                                     |         |         |          |           |        |          |          | 108,336    |        
|                                                   | Other net                                                                                                                                |                                              |                                                            | 535                                                  |         |         |          | 397        |        |          |          | 627        |        
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|                                                   |                                                                                                                                          |                                              |                                                            | Net cash provided by operating activities            |         |         | 597,674  |            |        |          | 714,733  |            |         |          | 383,307  |  
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|Investing Activities:                              |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |           
|                                                   | Proceeds from sale of available-for-sale securities                                                                                      |                                              |                                                            | 891,799                                              |         |         |          | 498,945    |        |          |          | 393,245    |        
|                                                   | Proceeds from maturity or paydown of available-for-sale
    securities                                                                   |                                              |                                                            | 97,931                                               |         |         |          | 136,472    |        |          |          | 132,979    |        
|                                                   | Acquisition of available-for-sale securities                                                                                             |                                              |                                                            | (1,711,505                                           | )       |         |          | (1,230,895 | )      |          |          | (1,066,077 | )      
|                                                   | Other invested asset acquired                                                                                                            |                                              |                                                            |                                                     |         |         |          |           |        |          |          | (6,910     | )      
|                                                   | Increase in short-term investments                                                                                                       |                                              |                                                            | (8,793                                               | )       |         |          |           |        |          |          |           |        
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|                                                   |                                                                                                                                          |                                              |                                                            | Net cash used in investing activities                |         |         | (730,568 | )          |        |          | (595,478 | )          |         |          | (546,763 | )
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|Financing Activities:                              |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |           
|                                                   | Dividends paid to shareholders                                                                                                           |                                              |                                                            | (14,775                                              | )       |         |          | (13,807    | )      |          |          | (13,767    | )      
|                                                   | Proceeds from exercise of share options                                                                                                  |                                              |                                                            | 15,027                                               |         |         |          | 7,406      |        |          |          | 678        |        
|                                                   | Net proceeds from issuance of common shares                                                                                              |                                              |                                                            | 425,756                                              |         |         |          | 1,567      |        |          |          | 520        |        
|                                                   | Net proceeds from issuance of preferred shares                                                                                           |                                              |                                                            | 167,509                                              |         |         |          |           |        |          |          |           |        
|                                                   | Net proceeds from issuance of debt securities                                                                                            |                                              |                                                            | 246,900                                              |         |         |          |           |        |          |          |           |        
|                                                   | Purchase of common shares                                                                                                                |                                              |                                                            |                                                     |         |         |          | (9,985     | )      |          |          |           |        
|                                                   | Repurchase of debt obligations                                                                                                           |                                              |                                                            | (96,674                                              | )       |         |          |           |        |          |          |           |        
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|                                                   |                                                                                                                                          |                                              |                                                            | Net cash provided by (used in) financing activities  |         |         | 743,743  |            |        |          | (14,819  | )          |         |          | (12,569  | )
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|                                                   |                                                                                                                                          |                                              |                                                            | Net increase (decrease) in cash and cash equivalents |         |         | 610,849  |            |        |          | 104,436  |            |         |          | (176,025 | )
|Cash and cash equivalents at beginning of year     |                                                                                                                                          |                                              | 209,897                                                    |                                                      |         |         | 105,461  |            |        |          | 281,486  |           
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|Cash and cash equivalents at end of year           |                                                                                                                                          | $                                            | 820,746                                                    |                                                      |         | $       | 209,897  |            |        | $        | 105,461  |           
|                                                   |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |       
|Supplemental disclosures of cash flow information: |                                                                                                                                          |                                              |                                                            |                                                      |         |         |          |            |        |          |          |           
|                                                   | Income taxes paid                                                                                                                        |                                              | $                                                          | 33,569                                               |         |         | $        | 8,549      |        |          | $        | 65,912     |        
|                                                   | Interest paid                                                                                                                            |                                              | $                                                          | 17,662                                               |         |         | $        | 7,442      |        |          | $        | 7,888      |        



F-6



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




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



| |                                        
| | ---------------------------------------
| | Basis of Presentation and Consolidation







| |                                           
| | ------------------------------------------
| | Summary of Significant Accounting Policies



| |            
| | -----------
| | Investments











F-7



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |                 
| | ----------------
| | Premium Revenues









| |                               
| | ------------------------------
| | Funds Held by Ceding Companies



F-8



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                           
| | --------------------------
| | Deferred Acquisition Costs





| |                                                  
| | -------------------------------------------------
| | Debt Obligations and Deferred Debt Issuance Costs





| |                      
| | ---------------------
| | Unpaid Losses and LAE







| |                  
| | -----------------
| | Reinsurance Ceded





F-9



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                
| | -------------------------------
| | Reinsurance Deposit Liabilities





| |                          
| | -------------------------
| | Earnings Per Common Share







| |             
| | ------------
| | Income Taxes





| |                         
| | ------------------------
| | Stock-Based Compensation



F-10



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                    |             |      |   |          |      |  |   |        |  |  |   |         | 
|--------------------------------------------------- | ----------- | ---- | - | -------- | ---- |  | - | ------ |  |  | - | ------- | 
|                                                    |             | 2005 |   |          | 2004 |  |   | 2003   | 
|                                                    |             |      |   |          |      |  |   |        | 
|Share based compensation expense:                   |             |      |   |          |      |  |   |        |  |  |   |        
|                                                    | As reported |      | $ | 3,799    |      |  | $ | 2,358  |  |  | $ | 5,510   | 
|                                                    | Pro forma   |      |   | 8,149    |      |  |   | 7,026  |  |  |   | 14,774  | 
|Net income (loss) available to common shareholders: |             |      |   |          |      |  |   |        |  |  |   |        
|                                                    | As reported |      |   | (138,224 | )    |  |   | 84,783 |  |  |   | 144,823 | 
|                                                    | Pro forma   |      |   | (142,574 | )    |  |   | 80,115 |  |  |   | 135,559 | 
|Basic earnings (loss) per common share:             |             |      |   |          |      |  |   |        |  |  |   |        
|                                                    | As reported |      |   | (3.01    | )    |  |   | 1.96   |  |  |   | 3.37    | 
|                                                    | Pro forma   |      |   | (3.11    | )    |  |   | 1.86   |  |  |   | 3.15    | 
|Diluted earnings (loss) per common share:           |             |      |   |          |      |  |   |        |  |  |   |        
|                                                    | As reported |      |   | (3.01    | )    |  |   | 1.81   |  |  |   | 3.09    | 
|                                                    | Pro forma   |      | $ | (3.11    | )    |  | $ | 1.72   |  |  | $ | 2.90    | 







| |                          
| | -------------------------
| | Foreign Currency Exchange



F-11



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                 
| | ----------------
| | Use of Estimates





| |                  
| | -----------------
| | Reclassifications





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

available-for


|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |        |  |   |           |           | 
|-------------------------------------------- | -------------------------------------------------- | --------- | --------- | --------- | ---------- | - | ------ | ---------- |  | - | ---------- | ------ |  | - | --------- | --------- | 
|                                             |                                                    |           |           | Gross     |            |   | Gross  |            |  |  
|                                             |                                                    | Amortized |           |           | Unrealized |   |        | Unrealized |  |   |           
|                                             |                                                    | Cost      |           |           | Gains      |   |        | Losses     |  |   | Fair Value |       
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|December 31, 2005:                           |                                                    |           |           |           |            |   |        |            |  |   |            |        |  |   |           |          
|U.S. Government and U.S. Government agencies |                                                    | $         | 140,218   |           |            | $ | 11     |            |  | $ | 644        |        |  | $ | 139,585   |          
|Corporates                                   |                                                    |           | 1,379,702 |           |            |   | 991    |            |  |   | 26,389     |        |  |   | 1,354,304 |          
|Mortgage and asset-backed securities         |                                                    |           | 1,159,250 |           |            |   | 598    |            |  |   | 17,917     |        |  |   | 1,141,931 |          
|Municipal bonds                              |                                                    |           | 215,237   |           |            |   | 125    |            |  |   | 3,001      |        |  |   | 212,361   |          
|Foreign governments and states               |                                                    |           | 41,745    |           |            |   |       |            |  |   | 1,004      |        |  |   | 40,741    |          
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|                                             | Total available-for-sale fixed maturity securities |           |           | 2,936,152 |            |   |        | 1,725      |  |   |            | 48,955 |  |   |           | 2,888,922 | 
|Preferred stocks                             |                                                    |           | 8,735     |           |            |   |       |            |  |   | 549        |        |  |   | 8,186     |          
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|                                             | Total available-for-sale securities                |           | $         | 2,944,887 |            |   | $      | 1,725      |  |   | $          | 49,504 |  |   | $         | 2,897,108 | 
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|December 31, 2004:                           |                                                    |           |           |           |            |   |        |            |  |   |            |        |  |   |           |          
|U.S. Government and U.S. Government agencies |                                                    | $         | 4,227     |           |            | $ |       |            |  | $ | 24         |        |  | $ | 4,203     |          
|Corporates                                   |                                                    |           | 1,349,167 |           |            |   | 14,960 |            |  |   | 4,775      |        |  |   | 1,359,352 |          
|Mortgage and asset-backed securities         |                                                    |           | 508,757   |           |            |   | 3,898  |            |  |   | 1,586      |        |  |   | 511,069   |          
|Municipal bonds                              |                                                    |           | 214,088   |           |            |   | 1,751  |            |  |   | 588        |        |  |   | 215,251   |          
|Foreign governments and states               |                                                    |           | 64,301    |           |            |   | 57     |            |  |   | 380        |        |  |   | 63,978    |          
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|                                             | Total available-for-sale fixed maturity securities |           |           | 2,140,540 |            |   |        | 20,666     |  |   |            | 7,353  |  |   |           | 2,153,853 | 
|Preferred stocks                             |                                                    |           | 3,750     |           |            |   |       |            |  |   | 74         |        |  |   | 3,676     |          
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       
|                                             | Total available-for-sale securities                |           | $         | 2,144,290 |            |   | $      | 20,666     |  |   | $          | 7,427  |  |   | $         | 2,157,529 | 
|                                             |                                                    |           |           |           |            |   |        |            |  |   |            |       

F-12



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                     |       |           |           |           |            |   |           |           | 
|------------------------------------ | ----- | --------- | --------- | --------- | ---------- | - | --------- | --------- | 
|                                     |       | Amortized |           |           |           
|                                     |       | Cost      |           |           | Fair Value |  
|                                     |       |           |           |           |            |  
|Due in one year or less              |       | $         | 105,221   |           |            | $ | 104,497   |          
|Due from one to five years           |       |           | 1,196,981 |           |            |   | 1,178,204 |          
|Due from five to ten years           |       |           | 256,821   |           |            |   | 251,066   |          
|Due in ten or more years             |       |           | 217,879   |           |            |   | 213,223   |          
|Mortgage and asset backed securities |       |           | 1,159,250 |           |            |   | 1,141,932 |          
|                                     |       |           |           |           |            |  
|                                     | Total |           | $         | 2,936,152 |            |   | $         | 2,888,922 | 
|                                     |       |           |           |           |            |  



|                          |                          |      |         |       |      |   |        |       |  |   |        |       | 
|------------------------- | ------------------------ | ---- | ------- | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- | 
|                          |                          | 2005 |         |       | 2004 |   |        | 2003  | 
|                          |                          |      |         |       |      |   |        |       | 
|Fixed maturity securities |                          | $    | 114,234 |       |      | $ | 82,038 |       |  | $ | 55,727 |      
|Cash and cash equivalents |                          |      | 11,063  |       |      |   | 2,261  |       |  |   | 3,133  |      
|Funds held                |                          |      | 8,172   |       |      |   | 2,651  |       |  |   | 776    |      
|                          |                          |      |         |       |      |   |        |       | 
|                          |                          |      | 133,469 |       |      |   | 86,950 |       |  |   | 59,636 |      
|                          | Less investment expenses |      |         | 4,024 |      |   |        | 2,418 |  |   |        | 1,991 | 
|                          |                          |      |         |       |      |   |        |       | 
|Net investment income     |                          | $    | 129,445 |       |      | $ | 84,532 |       |  | $ | 57,645 |      
|                          |                          |      |         |       |      |   |        |       | 



|                      |                             |      |        |        |      |   |       |       |  |   |       |       | 
|--------------------- | --------------------------- | ---- | ------ | ------ | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                      |                             | 2005 |        |        | 2004 |   |       | 2003  | 
|                      |                             |      |        |        |      |   |       |       | 
|Gross realized gains  |                             | $    | 4,606  |        |      | $ | 5,706 |       |  | $ | 4,639 |      
|Gross realized losses |                             |      | (7,652 | )      |      |   | 3,751 |       |  |   | 1,858 |      
|                      |                             |      |        |        |      |   |       |       | 
|                      | Net realized gains (losses) |      | $      | (3,046 | )    |   | $     | 1,955 |  |   | $     | 2,781 | 
|                      |                             |      |        |        |      |   |       |       | 





|                              |                                           |      |         |         |      |   |        |        |   |   |        |       | 
|----------------------------- | ----------------------------------------- | ---- | ------- | ------- | ---- | - | ------ | ------ | - | - | ------ | ----- | 
|                              |                                           | 2005 |         |         | 2004 |   |        | 2003   |  
|                              |                                           |      |         |         |      |   |        |        |  
|Available for sale securities |                                           | $    | (61,018 | )       |      | $ | (9,459 | )      |   | $ | 10,405 |      
|Less deferred tax             |                                           |      | 8,564   |         |      |   | 2,549  |        |   |   | 2,835  |      
|                              |                                           |      |         |         |      |   |        |        |  
|                              | Net change in unrealized gains and losses |      | $       | (52,454 | )    |   | $      | (6,910 | ) |   | $      | 7,570 | 
|                              |                                           |      |         |         |      |   |        |        |  



F-13



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                             |       |            |           |            |      |   |        |        | 
|-------------------------------------------- | ----- | ---------- | --------- | ---------- | ---- | - | ------ | ------ | 
|                                             |       |            |           | Unrealized |     
|                                             |       | Fair Value |           |            | Loss |  
|                                             |       |            |           |            |      |  
|Less than twelve months:                     |       |            |           |            |      |   |        |       
|U.S. Government and U.S. Government agencies |       | $          | 125,500   |            |      | $ | 644    |       
|Corporates                                   |       |            | 970,291   |            |      |   | 18,637 |       
|Mortgage and asset-backed securities         |       |            | 894,799   |            |      |   | 15,105 |       
|Municipal bonds                              |       |            | 169,371   |            |      |   | 2,491  |       
|Foreign governments and states               |       |            | 23,718    |            |      |   | 510    |       
|Preferred stocks                             |       |            | 4,728     |            |      |   | 257    |       
|                                             |       |            |           |            |      |  
|                                             | Total |            | $         | 2,188,407  |      |   | $      | 37,644 | 
|                                             |       |            |           |            |      |  
|Twelve months or more:                       |       |            |           |            |      |   |        |       
|Corporates                                   |       | $          | 250,620   |            |      | $ | 7,752  |       
|Mortgage and asset-backed securities         |       |            | 69,326    |            |      |   | 2,811  |       
|Municipal bonds                              |       |            | 19,291    |            |      |   | 510    |       
|Foreign governments and states               |       |            | 15,207    |            |      |   | 494    |       
|Preferred stocks                             |       |            | 3,458     |            |      |   | 293    |       
|                                             |       |            |           |            |      |  
|                                             | Total |            | $         | 357,902    |      |   | $      | 11,860 | 
|                                             |       |            |           |            |      |  
|Total unrealized losses:                     |       |            |           |            |      |   |        |       
|U.S. Government and U.S. Government agencies |       | $          | 125,500   |            |      | $ | 644    |       
|Corporates                                   |       |            | 1,220,911 |            |      |   | 26,389 |       
|Mortgage and asset-backed securities         |       |            | 964,125   |            |      |   | 17,916 |       
|Municipal bonds                              |       |            | 188,662   |            |      |   | 3,001  |       
|Foreign governments and states               |       |            | 38,925    |            |      |   | 1,004  |       
|Preferred stocks                             |       |            | 8,186     |            |      |   | 550    |       
|                                             |       |            |           |            |      |  
|                                             | Total |            | $         | 2,546,309  |      |   | $      | 49,504 | 
|                                             |       |            |           |            |      |  



F-14



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






sub-sectors, asset-backed sub-categories,


available-for






|                       |                           |                   |   |           |                   |  |          |           |  |  |            |           |  |  |   |           | 
|---------------------- | ------------------------- | ----------------- | - | --------- | ----------------- |  | -------- | --------- |  |  | ---------- | --------- |  |  | - | --------- | 
|                       |                           | December 31, 2005 |   |           | December 31, 2004 | 
|                       |                           |                   |   |           |                   | 
|                       |                           | Carrying          |   |           |                   |  | Carrying |           |  | 
|                       |                           | Amount            |   |           | Fair Value        |  |          | Amount    |  |  | Fair Value |          
|                       |                           |                   |   |           |                   |  |          |           |  |  |            |          
|Financial assets:      |                           |                   |   |           |                   |  |          |           |  |  |            |           |  |  |   |          
|                       | Fixed maturity securities |                   | $ | 2,987,703 |                   |  | $        | 2,987,703 |  |  | $          | 2,236,526 |  |  | $ | 2,236,526 | 
|                       | Preferred stocks          |                   |   | 8,186     |                   |  |          | 8,186     |  |  |            | 3,676     |  |  |   | 3,676     | 
|                       | Short-term investments    |                   |   | 8,793     |                   |  |          | 8,793     |  |  |            |          |  |  |   |          | 
|                       | Other invested asset      |                   |   | 5,000     |                   |  |          | 5,000     |  |  |            | 6,769     |  |  |   | 6,769     | 
|Financial liabilities: |                           |                   |   |           |                   |  |          |           |  |  |            |           |  |  |   |          
|                       | Debt obligations          |                   | $ | 292,840   |                   |  | $        | 296,708   |  |  | $          | 137,500   |  |  | $ | 165,000   | 



F-15



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                      
|-- | ---------------------
|3. | Unpaid Losses and LAE





|                           |                                |                                                  |         |         |         |   |         |         |         | 
|-------------------------- | ------------------------------ | ------------------------------------------------ | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                           |                                | 2005                                             |         |         | 2004    |  
|                           |                                |                                                  |         |         |         |  
|Gross losses and LAE       |                                | $                                                | 654,090 |         |         | $ | 230,475 |        
|Retrocessional reinsurance |                                |                                                  | (73,800 | )       |         |   |        |        
|                           |                                |                                                  |         |         |         |  
|                           | Net losses and LAE             |                                                  |         | 580,290 |         |   |         | 230,475 |        
|                           | Additional net premiums earned |                                                  |         | (46,666 | )       |   |         | (29,265 | )      
|                           | Profit commissions             |                                                  |         | (3,654  | )       |   |         | (10,243 | )      
|                           |                                |                                                  |         |         |         |  
|                           |                                | Net adverse impact on income before income taxes |         | $       | 529,970 |   |         | $       | 190,967 | 
|                           |                                |                                                  |         |         |         |  



|                                                      |              |                                   |           |           |           |   |           |           |           |   |         |         |         | 
|----------------------------------------------------- | ------------ | --------------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | - | ------- | ------- | ------- | 
|                                                      |              | 2005                              |           |           | 2004      |   |           | 2003      |          
|                                                      |              |                                   |           |           |           |   |           |           |          
|Net unpaid losses and LAE as of the beginning of year |              | $                                 | 1,379,227 |           |           | $ | 731,918   |           |           | $ | 281,659 |        
|                                                      |              |                                   |           |           |           |   |           |           |          
|Net incurred related to:                              |              |                                   |           |           |           |   |           |           |           |   |         |        
|                                                      | Current year |                                   |           | 1,577,944 |           |   |           | 1,101,820 |           |   |         | 648,137 |        
|                                                      | Prior year   |                                   |           | (72,519   | )         |   |           | (82,016   | )         |   |         | (63,966 | )      
|                                                      |              |                                   |           |           |           |   |           |           |          
|                                                      |              | Total net incurred losses and LAE |           |           | 1,505,425 |   |           |           | 1,019,804 |   |         |         | 584,171 | 
|                                                      |              |                                   |           |           |           |   |           |           |          
|Net paid losses and LAE:                              |              |                                   |           |           |           |   |           |           |           |   |         |        
|                                                      | Current year |                                   |           | 210,306   |           |   |           | 174,870   |           |   |         | 102,669 |        
|                                                      | Prior year   |                                   |           | 390,598   |           |   |           | 205,889   |           |   |         | 41,709  |        
|                                                      |              |                                   |           |           |           |   |           |           |          
|                                                      |              | Total net paid losses and LAE     |           |           | 600,904   |   |           |           | 380,759   |   |         |         | 144,378 | 
|Effects of foreign currency exchange rate changes     |              |                                   | (15,093   | )         |           |   | 8,264     |           |           |   | 10,466  |        
|                                                      |              |                                   |           |           |           |   |           |           |          
|Net unpaid losses and LAE as of the end of year       |              |                                   | 2,268,655 |           |           |   | 1,379,227 |           |           |   | 731,918 |        
|Reinsurance recoverable                               |              |                                   | 55,335    |           |           |   | 1,728     |           |           |   | 5,016   |        
|                                                      |              |                                   |           |           |           |   |           |           |          
|Gross unpaid losses and LAE at end of year            |              | $                                 | 2,323,990 |           |           | $ | 1,380,955 |           |           | $ | 736,934 |        
|                                                      |              |                                   |           |           |           |   |           |           |          



F-16



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|   |                           
|-- | --------------------------
|4. | Retrocessional Reinsurance



F-17



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                                |                       |         |   |           |       |  |   |        |   |  |   |           | 
|----------------------------------------------- | --------------------- | ------- | - | --------- | ----- |  | - | ------ | - |  | - | --------- | 
|                                                |                       | Assumed |   |           | Ceded |  |   | Net    |  
|                                                |                       |         |   |           |       |  |   |        |  
|As of and for the year ended December 31, 2005: |                       |         |   |           |       |  |   |        |   |  |   |          
|                                                | Premiums written      |         | $ | 1,765,155 |       |  | $ | 47,433 |   |  | $ | 1,717,722 | 
|                                                | Premiums earned       |         |   | 1,757,139 |       |  |   | 42,416 |   |  |   | 1,714,723 | 
|                                                | Losses and LAE        |         |   | 1,594,737 |       |  |   | 89,312 |   |  |   | 1,505,425 | 
|                                                | Unpaid losses and LAE |         |   | 2,323,990 |       |  |   | 55,335 |   |  |   | 2,268,655 | 
|As of and for the year ended December 31, 2004: |                       |         |   |           |       |  |   |        |   |  |   |          
|                                                | Premiums written      |         |   | 1,659,790 |       |  |   | 13,777 |   |  |   | 1,646,013 | 
|                                                | Premiums earned       |         |   | 1,465,058 |       |  |   | 17,123 |   |  |   | 1,447,935 | 
|                                                | Losses and LAE        |         |   | 1,018,106 |       |  |   | (1,698 | ) |  |   | 1,019,804 | 
|                                                | Unpaid losses and LAE |         |   | 1,380,955 |       |  |   | 1,728  |   |  |   | 1,379,227 | 
|As of and for the year ended December 31, 2003: |                       |         |   |           |       |  |   |        |   |  |   |          
|                                                | Premiums written      |         |   | 1,198,473 |       |  |   | 26,331 |   |  |   | 1,172,142 | 
|                                                | Premiums earned       |         |   | 1,088,109 |       |  |   | 20,582 |   |  |   | 1,067,527 | 
|                                                | Losses and LAE        |         |   | 589,656   |       |  |   | 5,485  |   |  |   | 584,171   | 
|                                                | Unpaid losses and LAE |         | $ | 736,934   |       |  | $ | 5,016  |   |  | $ | 731,918   | 

excess-of


|                                               |                         |      |   |         |      |  |   |         |  |  |   |         | 
|---------------------------------------------- | ----------------------- | ---- | - | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                               |                         | 2005 |   |         | 2004 |  |   | 2003    | 
|                                               |                         |      |   |         |      |  |   |         | 
|Retroceded by Platinum US to Platinum Bermuda: |                         |      |   |         |      |  |   |         |  |  |   |        
|                                               | Premiums earned         |      | $ | 697,992 |      |  | $ | 515,869 |  |  | $ | 270,913 | 
|                                               | Incurred losses and LAE |      |   | 893,237 |      |  |   | 562,193 |  |  |   | 214,796 | 
|Retroceded by Platinum UK to Platinum Bermuda: |                         |      |   |         |      |  |   |         |  |  |   |        
|                                               | Premiums earned         |      |   | 86,163  |      |  |   | 89,394  |  |  |   | 43,998  | 
|                                               | Incurred losses and LAE |      |   | 54,657  |      |  |   | 57,830  |  |  |   | 17,542  | 
|Retroceded by Platinum Bermuda to Platinum UK: |                         |      |   |         |      |  |   |         |  |  |   |        
|                                               | Premiums earned         |      |   | 8,250   |      |  |   |        |  |  |   |        | 
|                                               | Incurred losses and LAE |      |   | 55,000  |      |  |   |        |  |  |   |        | 
|Retroceded by Platinum UK to Platinum US:      |                         |      |   |         |      |  |   |         |  |  |   |        
|                                               | Premiums earned         |      |   | 1,800   |      |  |   |        |  |  |   |        | 
|                                               | Incurred losses and LAE |      | $ |        |      |  | $ |        |  |  | $ |        | 



F-18



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                                
|-- | -----------------------------------------------
|5. | Debt, Equity Security Units and Credit Facility



| |     
| | ----
| | Debt







| |                      
| | ---------------------
| | Equity Security Units





F-19



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                             |                        |      |         |         |      |   |         |         | 
|------------------------------------------------------------ | ---------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                                             |                        | 2005 |         |         | 2004 |  
|                                                             |                        |      |         |         |      |  
|Series B Notes, 7.5%, due June 1, 2017                       |                        | $    | 250,000 |         |      | $ |        |        
|Series B Remarketed Notes, 6.371%, due November 16,
    2007 |                        |      | 42,840  |         |      |   |        |        
|Senior Guaranteed Notes, 5.25%, due November 16, 2005        |                        |      |        |         |      |   | 137,500 |        
|                                                             |                        |      |         |         |      |  
|                                                             | Total debt obligations |      | $       | 292,840 |      |   | $       | 137,500 | 
|                                                             |                        |      |         |         |      |  



| |                
| | ---------------
| | Credit Facility









|   |             
|-- | ------------
|6. | Income Taxes





F-20



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|              |                                      |      |         |          |      |   |        |         |  |   |         |         | 
|------------- | ------------------------------------ | ---- | ------- | -------- | ---- | - | ------ | ------- |  | - | ------- | ------- | 
|              |                                      | 2005 |         |          | 2004 |   |        | 2003    | 
|              |                                      |      |         |          |      |   |        |         | 
|United States |                                      | $    | (66,181 | )        |      | $ | 73,020 |         |  | $ | 122,485 |        
|Bermuda       |                                      |      | (73,165 | )        |      |   | 19,423 |         |  |   | 48,191  |        
|Other         |                                      |      | (23,108 | )        |      |   | 22,689 |         |  |   | 23,022  |        
|              |                                      |      |         |          |      |   |        |         | 
|              | Income before income taxes (benefit) |      | $       | (162,454 | )    |   | $      | 115,132 |  |   | $       | 193,698 | 
|              |                                      |      |         |          |      |   |        |         | 



|                               |       |      |         |         |      |   |        |        |  |   |        |        | 
|------------------------------ | ----- | ---- | ------- | ------- | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                               |       | 2005 |         |         | 2004 |   |        | 2003   | 
|                               |       |      |         |         |      |   |        |        | 
|Current tax expense            |       | $    | (377    | )       |      | $ | 28,133 |        |  | $ | 56,681 |       
|Deferred tax expense (benefit) |       |      | (24,590 | )       |      |   | 2,216  |        |  |   | (7,806 | )     
|                               |       |      |         |         |      |   |        |        | 
|                               | Total |      | $       | (24,967 | )    |   | $      | 30,349 |  |   | $      | 48,875 | 
|                               |       |      |         |         |      |   |        |        | 



|                                                                        |                              |      |         |         |      |   |        |        |  |   |         |        | 
|----------------------------------------------------------------------- | ---------------------------- | ---- | ------- | ------- | ---- | - | ------ | ------ |  | - | ------- | ------ | 
|                                                                        |                              | 2005 |         |         | 2004 |   |        | 2003   | 
|                                                                        |                              |      |         |         |      |   |        |        | 
|Expected income tax expense (benefit) at 35%                            |                              | $    | (56,859 | )       |      | $ | 40,296 |        |  | $ | 67,794  |       
|Effect of income or loss subject to tax at rates other than 35%         |                              |      | 26,474  |         |      |   | (8,222 | )      |  |   | (18,316 | )     
|Tax exempt investment income                                            |                              |      | (2,932  | )       |      |   | (1,084 | )      |  |   | (740    | )     
|U.S. withholding taxes deemed taxable transfer to foreign
    affiliate |                              |      | 6,500   |         |      |   |       |        |  |   |        |       
|Other, net                                                              |                              |      | 1,850   |         |      |   | (641   | )      |  |   | 137     |       
|                                                                        |                              |      |         |         |      |   |        |        | 
|                                                                        | Income tax expense (benefit) |      | $       | (24,967 | )    |   | $      | 30,349 |  |   | $       | 48,875 | 
|                                                                        |                              |      |         |         |      |   |        |        | 

F-21



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                                 |                                             |   |        |        |  |   |        |        |  
|------------------------- | ----------------------------------------------- | ------------------------------------------- | - | ------ | ------ |  | - | ------ | ------ | -
|                          |                                                 | 2005                                        |   |        | 2004   | 
|                          |                                                 |                                             |   |        |        | 
|Deferred tax assets:      |                                                 |                                             |   |        |        |  |   |       
|                          | Unpaid losses and LAE                           |                                             | $ | 45,516 |        |  | $ | 31,314 |       
|                          | Unearned premiums                               |                                             |   | 12,555 |        |  |   | 15,095 |       
|                          | Net unrealized losses on investments            |                                             |   | 6,565  |        |  |   | 188    |       
|                          | Other deferred tax assets                       |                                             |   | 41     |        |  |   |       |       
|                          |                                                 |                                             |   |        |        | 
|                          |                                                 | Total deferred tax assets                   |   | $      | 64,677 |  |   | $      | 46,597 |  
|                          |                                                 |                                             |   |        |        | 
|Deferred tax liabilities: |                                                 |                                             |   |        |        |  |   |       
|                          | Deferred acquisition costs                      |                                             |   | 31,716 |        |  |   | 36,892 |       
|                          | Timing differences in recognition of expenses   |                                             |   | 261    |        |  |   | 558    |       
|                          | Unrealized net foreign currency exchange losses |                                             |   | 884    |        |  |   | 7,766  |       
|                          | Net unrealized gains on investments             |                                             |   |       |        |  |   | 1,999  |       
|                          | Other deferred tax liabilities                  |                                             |   |       |        |  |   | 855    |       
|                          |                                                 |                                             |   |        |        | 
|                          |                                                 | Total deferred tax liabilities              |   |        | 32,861 |  |   |        | 48,070 |  
|                          |                                                 |                                             |   |        |        | 
|                          |                                                 | Total net deferred tax assets (liabilities) |   | $      | 31,816 |  |   | $      | (1,473 | )
|                          |                                                 |                                             |   |        |        | 



|                                     |                                             |      |        |        |      |   |        |        |  
|------------------------------------ | ------------------------------------------- | ---- | ------ | ------ | ---- | - | ------ | ------ | -
|                                     |                                             | 2005 |        |        | 2004 |  
|                                     |                                             |      |        |        |      |  
|Platinum US deferred tax assets      |                                             | $    | 64,871 |        |      | $ | 49,254 |       
|Platinum US deferred tax liabilities |                                             |      | 32,937 |        |      |   | 40,323 |       
|                                     |                                             |      |        |        |      |  
|                                     | Net Platinum US deferred tax assets         |      |        | 31,934 |      |   |        | 8,931  |  
|                                     |                                             |      |        |        |      |  
|Platinum UK deferred tax assets      |                                             |      | 1,073  |        |      |   |       |       
|Platinum UK deferred tax liabilities |                                             |      | 1,191  |        |      |   | 10,404 |       
|                                     |                                             |      |        |        |      |  
|                                     | Net Platinum UK deferred tax liabilities    |      |        | 118    |      |   |        | 10,404 |  
|                                     |                                             |      |        |        |      |  
|                                     | Total net deferred tax assets (liabilities) |      | $      | 31,816 |      |   | $      | (1,473 | )
|                                     |                                             |      |        |        |      |  







|   |                                    
|-- | -----------------------------------
|7. | Shareholders Equity and Regulation



F-22



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












| |                       
| | ----------------------
| | Common Share Offerings





F-23



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                         
| | ------------------------
| | Preferred Share Offering





| |           
| | ----------
| | Regulation



F-24



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                              |                |                                     |   |         |           |   |   |         |           |  |   |         |           | 
|----------------------------- | -------------- | ----------------------------------- | - | ------- | --------- | - | - | ------- | --------- |  | - | ------- | --------- | 
|                              |                | 2005                                |   |         | 2004      |   |   | 2003    |          
|                              |                |                                     |   |         |           |   |   |         |          
|Statutory capital and surplus |                |                                     |   |         |           |   |   |         |           |  |   |        
|                              | Bermuda        |                                     | $ | 930,072 |           |   | $ | 535,054 |           |  | $ | 550,506 |          
|                              | United States  |                                     |   | 447,207 |           |   |   | 403,121 |           |  |   | 372,921 |          
|                              | United Kingdom |                                     |   | 156,927 |           |   |   | 186,270 |           |  |   | 172,971 |          
|                              |                |                                     |   |         |           |   |   |         |          
|                              |                | Total statutory capital and surplus |   |         | 1,534,206 |   |   |         | 1,124,445 |  |   |         | 1,096,398 | 
|                              |                |                                     |   |         |           |   |   |         |          
|Statutory net income (loss)   |                |                                     |   |         |           |   |   |         |           |  |   |        
|                              | Bermuda        |                                     |   | (68,459 | )         |   |   | 29,356  |           |  |   | 71,152  |          
|                              | United States  |                                     |   | (21,884 | )         |   |   | 20,575  |           |  |   | 50,646  |          
|                              | United Kingdom |                                     |   | (4,685  | )         |   |   | 1,872   |           |  |   | (4,626  | )        
|                              |                |                                     |   |         |           |   |   |         |          
|                              |                | Total statutory net income (loss)   |   | $       | (95,028   | ) |   | $       | 51,803    |  |   | $       | 117,172   | 
|                              |                |                                     |   |         |           |   |   |         |          



F-25



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                                                     
|-- | --------------------------------------------------------------------
|8. | Earnings (Loss) Per Common Share and Comprehensive Income
    (Loss)



| |                                 
| | --------------------------------
| | Earnings (Loss) per Common Share



|                                  |                                          |            |   |          |             |  |          |           |  |  |   |       |  
|--------------------------------- | ---------------------------------------- | ---------- | - | -------- | ----------- |  | -------- | --------- |  |  | - | ----- | -
|                                  |                                          |            |   | Weighted |             |  |         
|                                  |                                          |            |   | Average  |             |  | Earnings |          
|                                  |                                          | Net Income |   |          | Shares      |  |          | (Loss)    | 
|                                  |                                          | (Loss)     |   |          | Outstanding |  |          | Per Share | 
|                                  |                                          |            |   |          |             |  |          |           | 
|Year Ended December 31, 2005:     |                                          |            |   |          |             |  |          |           |  |  |   |      
|Basic and diluted loss per share: |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  | Loss attributable to common shareholders |            | $ | (138,224 | )           |  |          | 45,915    |  |  | $ | (3.01 | )
|                                  |                                          |            |   |          |             |  |          |           | 
|Year Ended December 31, 2004:     |                                          |            |   |          |             |  |          |           |  |  |   |      
|Basic earnings per share:         |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  | Net income                               |            | $ | 84,783   |             |  |          | 43,158    |  |  | $ | 1.96  |  
|Effect of dilutive securities:    |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  | Share options and restricted shares      |            |   |         |             |  |          | 2,094     |  |  |   |       |  
|                                  | Interest expense related to ESUs        |            |   | 6,097    |             |  |          |          |  |  |   |       |  
|                                  | Common share conversion of ESUs         |            |   |         |             |  |          | 5,009     |  |  |   |       |  
|Diluted earnings per share:       |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  |                                          |            |   |          |             |  |          |           | 
|                                  | Income available to common shareholders  |            | $ | 90,880   |             |  |          | 50,261    |  |  | $ | 1.81  |  
|                                  |                                          |            |   |          |             |  |          |           | 
|Year Ended December 31, 2003:     |                                          |            |   |          |             |  |          |           |  |  |   |      
|Basic earnings per share:         |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  | Net income                               |            | $ | 144,823  |             |  |          | 43,019    |  |  | $ | 3.37  |  
|Effect of dilutive securities:    |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  | Share options                            |            |   |         |             |  |          | 717       |  |  |   |       |  
|                                  | Interest expense related to ESUs        |            |   | 6,290    |             |  |          |          |  |  |   |       |  
|                                  | Common share conversion of ESUs         |            |   |         |             |  |          | 5,137     |  |  |   |       |  
|Diluted earnings per share:       |                                          |            |   |          |             |  |          |           |  |  |   |      
|                                  |                                          |            |   |          |             |  |          |           | 
|                                  | Income available to common shareholders  |            | $ | 151,113  |             |  |          | 48,873    |  |  | $ | 3.09  |  
|                                  |                                          |            |   |          |             |  |          |           | 

F-26



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                            
| | ---------------------------
| | Comprehensive Income (Loss)



|                                          |                                                                                     |                                                   |   |         |         |   |   |        |        |   |   |        |        |  
|----------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------------- | - | ------- | ------- | - | - | ------ | ------ | - | - | ------ | ------ | -
|                                          |                                                                                     | 2005                                              |   |         | 2004    |   |   | 2003   |       
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|Before tax amounts:                       |                                                                                     |                                                   |   |         |         |   |   |        |        |   |   |       
|                                          | Foreign currency translation adjustment                                             |                                                   | $ | (737    | )       |   | $ | 555    |        |   | $ | 890    |       
|                                          | Net change in unrealized holding gains and losses arising during
    the period     |                                                   |   | (62,441 | )       |   |   | (6,866 | )      |   |   | 13,051 |       
|                                          | Less: reclassification adjustment for net gains (losses)
    realized in net income |                                                   |   | (1,423  | )       |   |   | 2,594  |        |   |   | 2,645  |       
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|                                          |                                                                                     | Other comprehensive income (loss) before tax      |   |         | (61,755 | ) |   |        | (8,905 | ) |   |        | 11,296 |  
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|Deferred income tax (expense) benefit on: |                                                                                     |                                                   |   |         |         |   |   |        |        |   |   |       
|                                          | Foreign currency translation adjustment                                             |                                                   |   | 221     |         |   |   | (167   | )      |   |   | (267   | )     
|                                          | Net change in unrealized holding gains and losses arising during
    the period     |                                                   |   | 8,536   |         |   |   | 2,337  |        |   |   | (2,983 | )     
|                                          | Less: reclassification adjustment for net gains (losses)
    realized in net income |                                                   |   | (28     | )       |   |   | (213   | )      |   |   | (147   | )     
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|                                          |                                                                                     | Deferred tax on other comprehensive income (loss) |   |         | 8,785   |   |   |        | 2,383  |   |   |        | (3,103 | )
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|Net of tax amounts:                       |                                                                                     |                                                   |   |         |         |   |   |        |        |   |   |       
|                                          | Net foreign currency translation adjustment                                         |                                                   |   | (516    | )       |   |   | 388    |        |   |   | 623    |       
|                                          | Net change in unrealized holding gains and losses arising during
    the period     |                                                   |   | (53,905 | )       |   |   | (4,529 | )      |   |   | 10,068 |       
|                                          | Less: reclassification adjustment for net (gains) losses
    realized in net income |                                                   |   | (1,451  | )       |   |   | 2,381  |        |   |   | 2,498  |       
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       
|                                          |                                                                                     | Other comprehensive income (loss), net of tax     |   | $       | (52,970 | ) |   | $      | (6,522 | ) |   | $      | 8,193  |  
|                                          |                                                                                     |                                                   |   |         |         |   |   |        |       

F-27



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                                        
|-- | -------------------------------------------------------
|9. | Share Incentive Compensation and Employee Benefit Plans



| |                             
| | ----------------------------
| | Share Incentive Compensation



|                                                                       |           |                               |       |          |                   |   |       |                   |          |  |       |     |  |          |       |       |       |  |       |     |  |   |       |       | 
|---------------------------------------------------------------------- | --------- | ----------------------------- | ----- | -------- | ----------------- | - | ----- | ----------------- | -------- |  | ----- | --- |  | -------- | ----- | ----- | ----- |  | ----- | --- |  | - | ----- | ----- | 
|                                                                       |           | As of and For the Years Ended |      
|                                                                       |           |                               |      
|                                                                       |           | December 31, 2005             |       |          | December 31, 2004 |   |       | December 31, 2003 |         
|                                                                       |           |                               |       |          |                   |   |       |                   |         
|                                                                       |           |                               |       | Weighted |                   |   |       |                   | Weighted |  |       |     |  | Weighted |      
|                                                                       |           |                               |       | Average  |                   |   |       |                   | Average  |  |       |     |  | Average  |      
|                                                                       |           |                               |       | Exercise |                   |   |       |                   | Exercise |  |       |     |  | Exercise |      
|                                                                       |           | Options                       |       |          | Price             |   |       | Options           |          |  | Price |     |  | Options  |       |       | Price | 
|                                                                       |           |                               |       |          |                   |   |       |                   |          |  |       |     |  |          |       |       |       | 
|Outstanding  beginning of the year                                    |           |                               | 4,428 |          |                   | $ | 23.40 |                   |          |  | 4,614 |     |  | $        | 22.92 |       |       |  | 4,347 |     |  | $ | 22.50 |      
|                                                                       | Granted   |                               |       | 333      |                   |   |       | 29.78             |          |  |       | 227 |  |          |       | 31.43 |       |  |       | 670 |  |   |       | 25.41 | 
|                                                                       | Exercised |                               |       | 663      |                   |   |       | 22.65             |          |  |       | 329 |  |          |       | 22.50 |       |  |       | 30  |  |   |       | 22.50 | 
|                                                                       | Forfeited |                               |       | 180      |                   |   |       | 25.20             |          |  |       | 84  |  |          |       | 22.50 |       |  |       | 373 |  |   |       | 22.50 | 
|                                                                       |           |                               |       |          |                   |   |       |                   |          |  |       |     |  |          |       |       |       | 
|Outstanding  end of the year                                          |           |                               | 3,918 |          |                   | $ | 23.93 |                   |          |  | 4,428 |     |  | $        | 23.40 |       |       |  | 4,614 |     |  | $ | 22.92 |      
|                                                                       |           |                               |       |          |                   |   |       |                   |          |  |       |     |  |          |       |       |       | 
|Options exercisable at year-end                                        |           |                               | 2,896 |          |                   |   |       |                   |          |  | 3,636 |     |  |          |       |       |       |  | 1,834 |     |  |   |       |      
|Weighted average exercise price of options exercisable at
    year-end |           |                               |       |          |                   | $ | 23.04 |                   |          |  |       |     |  | $        | 22.99 |       |       |  |       |     |  | $ | 22.50 |      



|                         |  |             |       |           |             |  |          |             |  |   |             |          |  |          |       |  |  |   |       | 
|------------------------ |  | ----------- | ----- | --------- | ----------- |  | -------- | ----------- |  | - | ----------- | -------- |  | -------- | ----- |  |  | - | ----- | 
|                         |  |             |       |           |             |  |          | Exercisable | 
|                         |  |             |       | Weighted  |             |  |          |             |  |  
|                         |  |             |       | Average   |             |  | Weighted |             |  |   |             | Weighted | 
|                         |  |             |       | Remaining |             |  | Average  |             |  |   |             | Average  | 
|                         |  | Number      |       |           | Contractual |  |          | Exercise    |  |   | Number      |          |  | Exercise |      
|Range of Exercise Prices |  | Outstanding |       |           | Life        |  |          | Price       |  |   | Outstanding |          |  | Price    |      
|                         |  |             |       |           |             |  |          |             |  |   |             |          |  |          |      
|$22.50                   |  |             | 2,870 |           |             |  | 6.84     |             |  | $ | 22.50       |          |  |          | 2,539 |  |  | $ | 22.50 | 
|22.51 - 25.00            |  |             | 80    |           |             |  | 7.16     |             |  |   | 22.70       |          |  |          | 39    |  |  |   | 22.64 | 
|25.01 - 30.00            |  |             | 605   |           |             |  | 7.66     |             |  |   | 26.56       |          |  |          | 252   |  |  |   | 26.23 | 
|$30.01 - $35.00          |  |             | 363   |           |             |  | 8.77     |             |  | $ | 31.09       |          |  |          | 66    |  |  | $ | 31.69 | 



|                        |  |      |         |  |      |  |         |      |  |  |         | 
|----------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                        |  | 2005 |         |  | 2004 |  |         | 2003 | 
|                        |  |      |         |  |      |  |         |      | 
|Dividend yield          |  |      | 1.0%    |  |      |  | 1.4%    |      |  |  | 1.4%    | 
|Risk free interest rate |  |      | 3.0%    |  |      |  | 3.0%    |      |  |  | 3.0%    | 
|Expected volatility     |  |      | 30.0%   |  |      |  | 30.0%   |      |  |  | 30.0%   | 
|Expected option life    |  |      | 7 years |  |      |  | 7 years |      |  |  | 7 years | 

F-28



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                  |  |      |       |  |      |   |       |      |  |   |        | 
|--------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------ | 
|                                                                                  |  | 2005 |       |  | 2004 |   |       | 2003 | 
|                                                                                  |  |      |       |  |      |   |       |      | 
|Stock-based compensation expense, net of tax                                      |  | $    | 6,278 |  |      | $ | 6,640 |      |  | $ | 14,511 | 
|Stock-based compensation expense, net of tax included in
    financial statements |  | $    | 1,929 |  |      | $ | 1,814 |      |  | $ | 5,175  | 





Defined Contribution
Plan






|    |                                          
|--- | -----------------------------------------
|10. | Related Party Transactions and Agreements



excess-of


F-29



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|    |                              
|--- | -----------------------------
|11. | Operating Segment Information

excess-of excess-of


F-30



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


excess-of




|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |      |       |   |           |      |          |  
|------------------------------------------------------------ | -------------------------- | ---------------------------------- | -------- | ----- | -------- | - | ------- | ----------- | ------ | - | ------- | ---- | ----- | - | --------- | ---- | -------- | -
|                                                             |                            | Property                           |          |       |          |   |         |             |       
|                                                             |                            | and Marine                         |          |       | Casualty |   |         | Finite Risk |        |   | Total   |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Year ended December 31, 2005:                                |                            |                                    |          |       |          |   |         |             |        |   |         |      |       |   |           |     
|Net premiums written                                         |                            | $                                  | 575,055  |       |          | $ | 809,031 |             |        | $ | 333,636 |      |       | $ | 1,717,722 |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net premiums earned                                          |                            |                                    | 569,173  |       |          |   | 789,629 |             |        |   | 355,921 |      |       |   | 1,714,723 |     
|Losses and LAE                                               |                            |                                    | 756,742  |       |          |   | 511,609 |             |        |   | 237,074 |      |       |   | 1,505,425 |     
|Acquisition expenses                                         |                            |                                    | 93,983   |       |          |   | 194,397 |             |        |   | 114,755 |      |       |   | 403,135   |     
|Other underwriting expenses                                  |                            |                                    | 26,074   |       |          |   | 24,690  |             |        |   | 4,905   |      |       |   | 55,669    |     
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|                                                             |                            | Segment underwriting income (loss) |          | $     | (307,626 | ) |         | $           | 58,933 |   |         | $    | (813  | ) |           | $    | (249,506 | )
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|Net investment income and net realized losses on investments |                            |                                    | 126,399  |      
|Net foreign currency exchange losses                         |                            |                                    | (2,111   | )    
|Other expense                                                |                            |                                    | (586     | )    
|Corporate expenses not allocated to segments                 |                            |                                    | (14,158  | )    
|Interest expense                                             |                            |                                    | (20,006  | )    
|Loss on repurchase of debt                                   |                            |                                    | (2,486   | )    
|                                                             |                            |                                    |         
|Loss before income tax benefit                               |                            | $                                  | (162,454 | )    
|                                                             |                            |                                    |         
|Ratios:                                                      |                            |                                    |          |       |          |   |         |             |        |   |         |      |       |   |           |     
|                                                             | Losses and LAE             |                                    |          | 133.0 | %        |   |         | 64.8        | %      |   |         | 66.6 | %     |   |           | 87.8 | %       
|                                                             | Acquisition expense        |                                    |          | 16.5  | %        |   |         | 24.6        | %      |   |         | 32.2 | %     |   |           | 23.5 | %       
|                                                             | Other underwriting expense |                                    |          | 4.6   | %        |   |         | 3.1         | %      |   |         | 1.4  | %     |   |           | 3.2  | %       
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     
|                                                             |                            | Combined                           |          |       | 154.1    | % |         |             | 92.5   | % |         |      | 100.2 | % |           |      | 114.5    | %
|                                                             |                            |                                    |          |       |          |   |         |             |        |   |         |     

F-31



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |      |        |   |           |      |         |  
|----------------------------------------------------------- | -------------------------- | ---------------------------------- | ------- | ---- | -------- | - | ------- | ----------- | ------ | - | ------- | ---- | ------ | - | --------- | ---- | ------- | -
|                                                            |                            | Property                           |         |      |          |   |         |             |       
|                                                            |                            | and Marine                         |         |      | Casualty |   |         | Finite Risk |        |   | Total   |     
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Year ended December 31, 2004:                               |                            |                                    |         |      |          |   |         |             |        |   |         |      |        |   |           |     
|Net premiums written                                        |                            | $                                  | 504,439 |      |          | $ | 677,399 |             |        | $ | 464,175 |      |        | $ | 1,646,013 |     
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Net premiums earned                                         |                            |                                    | 485,135 |      |          |   | 611,893 |             |        |   | 350,907 |      |        |   | 1,447,935 |     
|Losses and LAE                                              |                            |                                    | 349,557 |      |          |   | 418,355 |             |        |   | 251,892 |      |        |   | 1,019,804 |     
|Acquisition expenses                                        |                            |                                    | 76,360  |      |          |   | 151,649 |             |        |   | 99,812  |      |        |   | 327,821   |     
|Other underwriting expenses                                 |                            |                                    | 27,827  |      |          |   | 19,086  |             |        |   | 6,224   |      |        |   | 53,137    |     
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|                                                            |                            | Segment underwriting income (loss) |         | $    | 31,391   |   |         | $           | 22,803 |   |         | $    | (7,021 | ) |           | $    | 47,173  |  
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Net investment income and net realized gains on investments |                            |                                    | 86,487  |     
|Net foreign currency exchange gains                         |                            |                                    | 725     |     
|Other income                                                |                            |                                    | 3,211   |     
|Corporate expenses not allocated to segments                |                            |                                    | (13,196 | )   
|Interest expense                                            |                            |                                    | (9,268  | )   
|                                                            |                            |                                    |        
|Income before income taxes                                  |                            | $                                  | 115,132 |     
|                                                            |                            |                                    |        
|Ratios:                                                     |                            |                                    |         |      |          |   |         |             |        |   |         |      |        |   |           |     
|                                                            | Losses and LAE             |                                    |         | 72.1 | %        |   |         | 68.4        | %      |   |         | 71.8 | %      |   |           | 70.4 | %      
|                                                            | Acquisition expense        |                                    |         | 15.7 | %        |   |         | 24.8        | %      |   |         | 28.4 | %      |   |           | 22.6 | %      
|                                                            | Other underwriting expense |                                    |         | 5.7  | %        |   |         | 3.1         | %      |   |         | 1.8  | %      |   |           | 3.7  | %      
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|                                                            |                            | Combined                           |         |      | 93.5     | % |         |             | 96.3   | % |         |      | 102.0  | % |           |      | 96.7    | %
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Year ended December 31, 2003:                               |                            |                                    |         |      |          |   |         |             |        |   |         |      |        |   |           |     
|Net premiums written                                        |                            | $                                  | 352,908 |      |          | $ | 474,000 |             |        | $ | 345,234 |      |        | $ | 1,172,142 |     
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Net premiums earned                                         |                            |                                    | 355,556 |      |          |   | 391,170 |             |        |   | 320,801 |      |        |   | 1,067,527 |     
|Losses and LAE                                              |                            |                                    | 169,944 |      |          |   | 266,836 |             |        |   | 147,391 |      |        |   | 584,171   |     
|Acquisition expenses                                        |                            |                                    | 52,154  |      |          |   | 101,005 |             |        |   | 98,067  |      |        |   | 251,226   |     
|Other underwriting expenses                                 |                            |                                    | 35,598  |      |          |   | 21,060  |             |        |   | 12,870  |      |        |   | 69,528    |     
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|                                                            |                            | Segment underwriting income        |         | $    | 97,860   |   |         | $           | 2,269  |   |         | $    | 62,473 |   |           | $    | 162,602 |  
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|Net investment income and net realized gains on investments |                            |                                    | 60,426  |     
|Net foreign currency exchange losses                        |                            |                                    | (114    | )   
|Other income                                                |                            |                                    | 3,343   |     
|Corporate expenses not allocated to segments                |                            |                                    | (23,067 | )   
|Interest expense                                            |                            |                                    | (9,492  | )   
|                                                            |                            |                                    |        
|Income before income taxes                                  |                            | $                                  | 193,698 |     
|                                                            |                            |                                    |        
|Ratios:                                                     |                            |                                    |         |      |          |   |         |             |        |   |         |      |        |   |           |     
|                                                            | Losses and LAE             |                                    |         | 47.8 | %        |   |         | 68.2        | %      |   |         | 45.9 | %      |   |           | 54.7 | %      
|                                                            | Acquisition expense        |                                    |         | 14.7 | %        |   |         | 25.8        | %      |   |         | 30.6 | %      |   |           | 23.5 | %      
|                                                            | Other underwriting expense |                                    |         | 10.0 | %        |   |         | 5.4         | %      |   |         | 4.0  | %      |   |           | 6.5  | %      
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     
|                                                            |                            | Combined                           |         |      | 72.5     | % |         |             | 99.4   | % |         |      | 80.5   | % |           |      | 84.7    | %
|                                                            |                            |                                    |         |      |          |   |         |             |        |   |         |     



F-32



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|              |       |      |           |           |      |   |           |           |  |   |         |           | 
|------------- | ----- | ---- | --------- | --------- | ---- | - | --------- | --------- |  | - | ------- | --------- | 
|              |       | 2005 |           |           | 2004 |   |           | 2003      | 
|              |       |      |           |           |      |   |           |           | 
|United States |       | $    | 1,449,216 |           |      | $ | 1,350,408 |           |  | $ | 912,586 |          
|International |       |      | 268,506   |           |      |   | 295,605   |           |  |   | 259,556 |          
|              |       |      |           |           |      |   |           |           | 
|              | Total |      | $         | 1,717,722 |      |   | $         | 1,646,013 |  |   | $       | 1,172,142 | 
|              |       |      |           |           |      |   |           |           | 



|    |                              
|--- | -----------------------------
|12. | Commitments and Contingencies



| |           
| | ----------
| | Litigation





| |                  
| | -----------------
| | Lease Commitments



|                          |            |       |   |       |        | 
|------------------------- | ---------- | ----- | - | ----- | ------ | 
|Years Ending December 31, |            |       |   |      
|                          | 2006       |       | $ | 2,347 |       
|                          | 2007       |       |   | 1,843 |       
|                          | 2008       |       |   | 1,919 |       
|                          | 2009       |       |   | 1,996 |       
|                          | 2010       |       |   | 1,998 |       
|                          | Thereafter |       |   | 4,847 |       
|                          |            |       |  
|                          |            | Total |   | $     | 14,950 | 
|                          |            |       |  



F-33



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                     
|--- | ------------------------------------
|13. | Quarterly Financial Data (Unaudited)



|                                                   |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |          |        |  
|-------------------------------------------------- | ------- | ------------------ | ------- | ------ | -------- | - | ------- | ------------- |  | - | ------------ | ------ | - | - | -------- | ------ | -
|                                                   |         | Three Months Ended |        
|                                                   |         |                    |        
|                                                   |         | March 31,          |         |        | June 30, |   |         | September 30, |  |   | December 31, |       
|                                                   |         | 2005               |         |        | 2005     |   |         | 2005          |  |   | 2005         |       
|                                                   |         |                    |         |        |          |   |         |               |  |   |              |       
|Net premiums earned                                |         | $                  | 411,040 |        |          | $ | 431,470 |               |  | $ | 429,388      |        |   | $ | 442,825  |       
|Net investment income                              |         |                    | 26,905  |        |          |   | 28,904  |               |  |   | 36,441       |        |   |   | 37,195   |       
|Losses and LAE                                     |         |                    | 237,698 |        |          |   | 240,852 |               |  |   | 564,618      |        |   |   | 462,257  |       
|Acquisition expenses                               |         |                    | 93,249  |        |          |   | 103,928 |               |  |   | 98,858       |        |   |   | 107,100  |       
|Operating expenses                                 |         |                    | 20,008  |        |          |   | 23,480  |               |  |   | 8,080        |        |   |   | 18,259   |       
|Net income (loss) available to common shareholders |         |                    | 73,088  |        |          |   | 67,985  |               |  |   | (176,024     | )      |   |   | (103,273 | )     
|Net income (loss) per common share:                |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |          |       
|                                                   | Basic   |                    |         | 1.69   |          |   |         | 1.57          |  |   |              | (4.02  | ) |   |          | (1.94  | )
|                                                   | Diluted |                    | $       | 1.49   |          |   | $       | 1.39          |  |   | $            | (4.02  | ) |   | $        | (1.94  | )
|Average common shares outstanding:                 |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |          |       
|                                                   | Basic   |                    |         | 43,163 |          |   |         | 43,293        |  |   |              | 43,785 |   |   |          | 53,339 |  
|                                                   | Diluted |                    |         | 50,032 |          |   |         | 50,009        |  |   |              | 43,785 |   |   |          | 53,339 |  

|                                   |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |         |        | 
|---------------------------------- | ------- | ------------------ | ------- | ------ | -------- | - | ------- | ------------- |  | - | ------------ | ------ | - | - | ------- | ------ | 
|                                   |         | Three Months Ended |        
|                                   |         |                    |        
|                                   |         | March 31,          |         |        | June 30, |   |         | September 30, |  |   | December 31, |       
|                                   |         | 2004               |         |        | 2004     |   |         | 2004          |  |   | 2004         |       
|                                   |         |                    |         |        |          |   |         |               |  |   |              |       
|Net premiums earned                |         | $                  | 321,042 |        |          | $ | 310,867 |               |  | $ | 383,090      |        |   | $ | 432,936 |       
|Net investment income              |         |                    | 17,484  |        |          |   | 19,377  |               |  |   | 21,429       |        |   |   | 26,242  |       
|Losses and LAE                     |         |                    | 161,969 |        |          |   | 189,466 |               |  |   | 384,724      |        |   |   | 283,645 |       
|Acquisition expenses               |         |                    | 88,921  |        |          |   | 62,694  |               |  |   | 81,271       |        |   |   | 94,935  |       
|Operating expenses                 |         |                    | 18,774  |        |          |   | 19,262  |               |  |   | 15,400       |        |   |   | 12,897  |       
|Net income (loss)                  |         |                    | 54,814  |        |          |   | 49,799  |               |  |   | (69,752      | )      |   |   | 49,922  |       
|Net income (loss) per share:       |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |         |       
|                                   | Basic   |                    |         | 1.27   |          |   |         | 1.15          |  |   |              | (1.62  | ) |   |         | 1.16   | 
|                                   | Diluted |                    | $       | 1.10   |          |   | $       | 1.01          |  |   | $            | (1.62  | ) |   | $       | 1.03   | 
|Average common shares outstanding: |         |                    |         |        |          |   |         |               |  |   |              |        |   |   |         |       
|                                   | Basic   |                    |         | 43,143 |          |   |         | 43,290        |  |   |              | 43,127 |   |   |         | 43,073 | 
|                                   | Diluted |                    |         | 50,984 |          |   |         | 50,788        |  |   |              | 43,127 |   |   |         | 49,819 | 

F-34



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                                                                               
|---- | ----------------------------------------------------------------------------------------------
|(14) | Investigations by the Securities and Exchange Commission and
    the New York Attorney General







|     |                                              
|---- | ---------------------------------------------
|(15) | Condensed Consolidating Financial Information





F-35



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PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |            |            |            |            |           |           |           |           | 
|------------------------------------- | ----------------------------------------------------------- | ------------------------------------------ | ----------------- | --------- | --------- | ----- | ------- | ------------- | ------- | ------- | ------------- | --------- | --------- | ------------ | ---------- | ---------- | ---------- | ---------- | --------- | --------- | --------- | --------- | 
|Condensed Consolidating Balance Sheet |                                                             | Platinum                                   |                   |           | Platinum  |       |         | Non-guarantor |         |         | Consolidating |           |           |             
|December 31, 2005                     |                                                             | Holdings                                   |                   |           | Finance   |       |         | Subsidiaries  |         |         | Adjustments   |           |           | Consolidated |           
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|ASSETS                               
|Investments:                          |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |            |            |            |            |           |          
|                                      | Fixed maturity securities available-for-sale, at fair value |                                            | $                 |          |           |       | $       | 12,448        |         |         | $             | 2,876,474 |           |              | $          |           |            |            | $         | 2,888,922 |          
|                                      | Fixed maturity trading securities at fair value             |                                            |                   |          |           |       |         |              |         |         |               | 98,781    |           |              |            |           |            |            |           | 98,781    |          
|                                      | Preferred stocks                                            |                                            |                   |          |           |       |         |              |         |         |               | 8,186     |           |              |            |           |            |            |           | 8,186     |          
|                                      | Other invested asset                                        |                                            |                   |          |           |       |         |              |         |         |               | 5,000     |           |              |            |           |            |            |           | 5,000     |          
|                                      | Short-term investments                                      |                                            |                   |          |           |       |         |              |         |         |               | 8,793     |           |              |            |           |            |            |           | 8,793     |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                      |                                                             |                                            | Total investments |           |           |      |         |               |         | 12,448  |               |           |           | 2,997,234    |            |            |            |           |           |           |           | 3,009,682 | 
|Investment in subsidiaries            |                                                             |                                            | 1,410,794         |           |           |       | 448,839 |               |         |         | 436,368       |           |           |              | (2,296,001 | )          |            |            |          |          
|Cash and cash equivalents             |                                                             |                                            | 129,962           |           |           |       | 5,010   |               |         |         | 685,774       |           |           |              |           |            |            |            | 820,746   |          
|Reinsurance assets                    |                                                             |                                            |                  |           |           |       |        |               |         |         | 2,969,880     |           |           |              | (1,903,893 | )          |            |            | 1,065,987 |          
|Income tax recoverable                |                                                             |                                            |                  |           |           |       | 5,874   |               |         |         | 18,648        |           |           |              |           |            |            |            | 24,522    |          
|Other assets                          |                                                             |                                            | 2,963             |           |           |       | 4,086   |               |         |         | 326,389       |           |           |              | (100,000   | )          |            |            | 233,438   |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                      |                                                             | Total assets                               |                   | $         | 1,543,719 |       |         | $             | 476,257 |         |               | $         | 7,434,293 |              |            | $          | (4,299,894 | )          |           | $         | 5,154,375 |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                     
|LIABILITIES AND SHAREHOLDERS EQUITY 
|Liabilities:                          |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |            |            |            |            |           |          
|                                      | Reinsurance liabilities                                     |                                            | $                 |          |           |       | $       |              |         |         | $             | 4,868,470 |           |              | $          | (1,827,216 | )          |            | $         | 3,041,254 |          
|                                      | Debt obligations                                            |                                            |                   |          |           |       |         | 292,840       |         |         |               |          |           |              |            |           |            |            |           | 292,840   |          
|                                      | Other liabilities                                           |                                            |                   | 3,470     |           |       |         | 2,243         |         |         |               | 350,996   |           |              |            | (76,677    | )          |            |           | 280,032   |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                      |                                                             |                                            | Total liabilities |           |           | 3,470 |         |               |         | 295,083 |               |           |           | 5,219,466    |            |            |            | (1,903,893 | )         |           |           | 3,614,126 | 
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|Shareholders Equity:                 |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |            |            |            |            |           |          
|                                      | Preferred shares                                            |                                            |                   | 57        |           |       |         |              |         |         |               |          |           |              |            |           |            |            |           | 57        |          
|                                      | Common shares                                               |                                            |                   | 590       |           |       |         |              |         |         |               | 6,250     |           |              |            | (6,250     | )          |            |           | 590       |          
|                                      | Unearned share grant compensation                           |                                            |                   | (2,467    | )         |       |         |              |         |         |               |          |           |              |            |           |            |            |           | (2,467    | )        
|                                      | Additional paid-in capital                                  |                                            |                   | 1,527,316 |           |       |         | 192,036       |         |         |               | 2,150,834 |           |              |            | (2,342,870 | )          |            |           | 1,527,316 |          
|                                      | Accumulated other comprehensive income (loss)               |                                            |                   | (40,718   | )         |       |         | (10,199       | )       |         |               | (52,840   | )         |              |            | 63,039     |            |            |           | (40,718   | )        
|                                      | Retained earnings                                           |                                            |                   | 55,471    |           |       |         | (663          | )       |         |               | 110,583   |           |              |            | (109,920   | )          |            |           | 55,471    |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                      |                                                             | Total shareholders equity                 |                   |           | 1,540,249 |       |         |               | 181,174 |         |               |           | 2,214,827 |              |            |            | (2,396,001 | )          |           |           | 1,540,249 |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           
|                                      |                                                             | Total liabilities and shareholders equity |                   | $         | 1,543,719 |       |         | $             | 476,257 |         |               | $         | 7,434,293 |              |            | $          | (4,299,894 | )          |           | $         | 5,154,375 |          
|                                      |                                                             |                                            |                   |           |           |       |         |               |         |         |               |           |           |              |           

F-36



---



##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |            |            |            |   |         |           |           | 
|------------------------------------- | ----------------------------------------------------------- | ------------------------------------------ | --------- | ------- | --------- |  | ------- | ------------- | ------- |  | ------------- | --------- | --------- | ------------ | ---------- | ---------- | ---------- | - | ------- | --------- | --------- | 
|Condensed Consolidating Balance Sheet |                                                             | Platinum                                   |           |         | Platinum  |  |         | Non-guarantor |         |  | Consolidating |           |           |             
|December 31, 2004                     |                                                             | Holdings                                   |           |         | Finance   |  |         | Subsidiaries  |         |  | Adjustments   |           |           | Consolidated |           
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|ASSETS                               
|Investments:                          |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |            |            |            |   |         |          
|                                      | Fixed maturity securities available-for-sale, at fair value |                                            | $         |        |           |  | $       | 3,740         |         |  | $             | 2,150,113 |           |              | $          |           |            |   | $       | 2,153,853 |          
|                                      | Fixed maturity trading securities at fair value             |                                            |           |        |           |  |         |              |         |  |               | 82,673    |           |              |            |           |            |   |         | 82,673    |          
|                                      | Preferred stocks                                            |                                            |           |        |           |  |         |              |         |  |               | 3,676     |           |              |            |           |            |   |         | 3,676     |          
|                                      | Other invested asset                                        |                                            |           |        |           |  |         |              |         |  |               | 6,769     |           |              |            |           |            |   |         | 6,769     |          
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                      |                                                             | Total investments                          |           |         |          |  |         |               | 3,740   |  |               |           | 2,243,231 |              |            |            |           |   |         |           | 2,246,971 | 
|Investment in subsidiaries            |                                                             |                                            | 1,135,434 |         |           |  | 414,105 |               |         |  | 470,776       |           |           |              | (2,020,315 | )          |            |   |        |          
|Cash and cash equivalents             |                                                             |                                            | 1,945     |         |           |  | 8,204   |               |         |  | 199,748       |           |           |              |           |            |            |   | 209,897 |          
|Reinsurance assets                    |                                                             |                                            |          |         |           |  |        |               |         |  | 2,009,245     |           |           |              | (1,090,219 | )          |            |   | 919,026 |          
|Other assets                          |                                                             |                                            | 1,648     |         |           |  | 1,502   |               |         |  | 142,951       |           |           |              | (100,000   | )          |            |   | 46,101  |          
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                      |                                                             | Total assets                               |           | $       | 1,139,027 |  |         | $             | 427,551 |  |               | $         | 5,065,951 |              |            | $          | (3,210,534 | ) |         | $         | 3,421,995 | 
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                     
|LIABILITIES AND SHAREHOLDERS EQUITY 
|Liabilities:                          |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |            |            |            |   |         |          
|                                      | Reinsurance liabilities                                     |                                            | $         |        |           |  | $       |              |         |  | $             | 3,233,233 |           |              | $          | (1,133,358 | )          |   | $       | 2,099,875 |          
|                                      | Debt obligations                                            |                                            |           |        |           |  |         | 137,500       |         |  |               |          |           |              |            |           |            |   |         | 137,500   |          
|                                      | Other liabilities                                           |                                            |           | 6,024   |           |  |         | 928           |         |  |               | 1,525     |           |              |            | 43,140     |            |   |         | 51,617    |          
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                      |                                                             | Total liabilities                          |           |         | 6,024     |  |         |               | 138,428 |  |               |           | 3,234,758 |              |            |            | (1,090,218 | ) |         |           | 2,288,992 | 
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|Shareholders Equity:                 |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |            |            |            |   |         |          
|                                      | Preferred shares                                            |                                            |           |        |           |  |         |              |         |  |               |          |           |              |            |           |            |   |         |          |          
|                                      | Common shares                                               |                                            |           | 430     |           |  |         |              |         |  |               | 1,250     |           |              |            | (1,250     | )          |   |         | 430       |          
|                                      | Additional paid-in capital                                  |                                            |           | 911,851 |           |  |         | 147,238       |         |  |               | 1,417,032 |           |              |            | (1,564,270 | )          |   |         | 911,851   |          
|                                      | Accumulated other comprehensive income                      |                                            |           | 12,252  |           |  |         | 3,309         |         |  |               | 17,068    |           |              |            | (20,377    | )          |   |         | 12,252    |          
|                                      | Retained earnings                                           |                                            |           | 208,470 |           |  |         | 138,576       |         |  |               | 395,843   |           |              |            | (534,419   | )          |   |         | 208,470   |          
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                      |                                                             | Total shareholders equity                 |           |         | 1,133,003 |  |         |               | 289,123 |  |               |           | 1,831,193 |              |            |            | (2,120,316 | ) |         |           | 1,133,003 | 
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           
|                                      |                                                             | Total liabilities and shareholders equity |           | $       | 1,139,027 |  |         | $             | 427,551 |  |               | $         | 5,065,951 |              |            | $          | (3,210,534 | ) |         | $         | 3,421,995 | 
|                                      |                                                             |                                            |           |         |           |  |         |               |         |  |               |           |           |              |           

F-37



---



##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |         |         |     |   |          |           |           |  
|-------------------------------------------- | ----------------------------------- | ----------------------------------------------------------- | -------- | -------- | -------- | - | ------- | ------------- | ------- | - | ------------- | --------- | --------- | ------------ | ------- | ------- | --- | - | -------- | --------- | --------- | -
|Consolidating Statement of Operations        |                                     | Platinum                                                    |          |          | Platinum |   |         | Non-guarantor |         |   | Consolidating |           |           |             
|For the Year Ended December 31, 2005         |                                     | Holdings                                                    |          |          | Finance  |   |         | Subsidiaries  |         |   | Adjustments   |           |           | Consolidated |        
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|Revenue:                                     |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |         |         |     |   |          |          
|                                             | Net premiums earned                 |                                                             | $        |         |          |   | $       |              |         |   | $             | 1,714,723 |           |              | $       |        |     |   | $        | 1,714,723 |          
|                                             | Net investment income               |                                                             |          | 1,724    |          |   |         | 937           |         |   |               | 126,867   |           |              |         | (83     | )   |   |          | 129,445   |          
|                                             | Net realized gains on investments   |                                                             |          |         |          |   |         | (15           | )       |   |               | (3,031    | )         |              |         |        |     |   |          | (3,046    | )        
|                                             | Other income                        |                                                             |          | 7,036    |          |   |         |              |         |   |               | (7,622    | )         |              |         |        |     |   |          | (586      | )        
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|                                             |                                     | Total revenue                                               |          |          | 8,760    |   |         |               | 922     |   |               |           | 1,830,937 |              |         |         | (83 | ) |          |           | 1,840,536 |  
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|Expenses:                                    |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |         |         |     |   |          |          
|                                             | Losses and loss adjustment expenses |                                                             |          |         |          |   |         |              |         |   |               | 1,505,425 |           |              |         |        |     |   |          | 1,505,425 |          
|                                             | Acquisition expenses                |                                                             |          |         |          |   |         |              |         |   |               | 407,680   |           |              |         | (4,545  | )   |   |          | 403,135   |          
|                                             | Operating expenses                  |                                                             |          | 13,393   |          |   |         | 635           |         |   |               | 51,337    |           |              |         | 4,462   |     |   |          | 69,827    |          
|                                             | Net foreign currency exchange gains |                                                             |          | 2        |          |   |         |              |         |   |               | 2,109     |           |              |         |        |     |   |          | 2,111     |          
|                                             | Interest expense                    |                                                             |          | 71       |          |   |         | 19,935        |         |   |               |          |           |              |         |        |     |   |          | 20,006    |          
|                                             | Loss on repurchase of debt          |                                                             |          |         |          |   |         | 2,486         |         |   |               |          |           |              |         |        |     |   |          | 2,486     |          
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|                                             |                                     | Total expenses                                              |          |          | 13,466   |   |         |               | 23,056  |   |               |           | 1,966,551 |              |         |         | (83 | ) |          |           | 2,002,990 |  
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|                                             |                                     | Income (loss) before income tax expense                     |          |          | (4,706   | ) |         |               | (22,134 | ) |               |           | (135,614  | )            |         |         |    |   |          |           | (162,454  | )
|                                             | Income tax expense (benefit)        |                                                             |          |         |          |   |         | (7,746        | )       |   |               | (17,221   | )         |              |         |        |     |   |          | (24,967   | )        
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|                                             |                                     | Net income (loss) before equity in earnings of subsidiaries |          |          | (4,706   | ) |         |               | (14,388 | ) |               |           | (118,393  | )            |         |         |    |   |          |           | (137,487  | )
|                                             | Equity in earnings of subsidiaries  |                                                             |          | (132,781 | )        |   |         | (27,557       | )       |   |               | (62,160   | )         |              |         | 222,498 |     |   |          |          |          
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|Net income (loss) before preferred dividends |                                     |                                                             | (137,487 | )        |          |   | (41,945 | )             |         |   | (180,553      | )         |           |              | 222,498 |         |     |   | (137,487 | )        
|Preferred dividends                          |                                     |                                                             | 737      |          |          |   |        |               |         |   |              |           |           |              |        |         |     |   | 737      |          
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        
|Net income available to common shareholders  |                                     | $                                                           | (138,224 | )        |          | $ | (41,945 | )             |         | $ | (180,553      | )         |           | $            | 222,498 |         |     | $ | (138,224 | )        
|                                             |                                     |                                                             |          |          |          |   |         |               |         |   |               |           |           |              |        

F-38



---



##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |   |          |          |   |   |           |           | 
|------------------------------------- | ----------------------------------- | ----------------------------------------------------------- | - | ------ | -------- | - | - | ------------- | ------ | - | ------------- | --------- | --------- | ------------ | - | -------- | -------- | - | - | --------- | --------- | 
|Consolidating Statement of Operations |                                     | Platinum                                                    |   |        | Platinum |   |   | Non-guarantor |        |   | Consolidating |           |           |             
|For the Year Ended December 31, 2004  |                                     | Holdings                                                    |   |        | Finance  |   |   | Subsidiaries  |        |   | Adjustments   |           |           | Consolidated |  
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|Revenue:                              |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |   |          |          |   |   |          
|                                      | Net premiums earned                 |                                                             | $ |       |          |   | $ |              |        |   | $             | 1,447,935 |           |              | $ |         |          |   | $ | 1,447,935 |          
|                                      | Net investment income               |                                                             |   | 53     |          |   |   | 164           |        |   |               | 84,315    |           |              |   |         |          |   |   | 84,532    |          
|                                      | Net realized gains on investments   |                                                             |   |       |          |   |   | 6             |        |   |               | 1,949     |           |              |   |         |          |   |   | 1,955     |          
|                                      | Other income                        |                                                             |   | 2,944  |          |   |   |              |        |   |               | 48        |           |              |   | 219      |          |   |   | 3,211     |          
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|                                      |                                     | Total revenue                                               |   |        | 2,997    |   |   |               | 170    |   |               |           | 1,534,247 |              |   |          | 219      |   |   |           | 1,537,633 | 
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|Expenses:                             |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |   |          |          |   |   |          
|                                      | Losses and loss adjustment expenses |                                                             |   |       |          |   |   |              |        |   |               | 1,019,804 |           |              |   |         |          |   |   | 1,019,804 |          
|                                      | Acquisition expenses                |                                                             |   |       |          |   |   |              |        |   |               | 331,754   |           |              |   | (3,933   | )        |   |   | 327,821   |          
|                                      | Operating expenses                  |                                                             |   | 12,725 |          |   |   | 288           |        |   |               | 49,387    |           |              |   | 3,933    |          |   |   | 66,333    |          
|                                      | Net foreign currency exchange gains |                                                             |   | (3     | )        |   |   |              |        |   |               | (722      | )         |              |   |         |          |   |   | (725      | )        
|                                      | Interest expense                    |                                                             |   | 207    |          |   |   | 9,061         |        |   |               |          |           |              |   |         |          |   |   | 9,268     |          
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|                                      |                                     | Total expenses                                              |   |        | 12,929   |   |   |               | 9,349  |   |               |           | 1,400,223 |              |   |          |         |   |   |           | 1,422,501 | 
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|                                      |                                     | Income (loss) before income tax expense                     |   |        | (9,932   | ) |   |               | (9,179 | ) |               |           | 134,024   |              |   |          | 219      |   |   |           | 115,132   | 
|                                      | Income tax expense (benefit)        |                                                             |   |       |          |   |   | (3,213        | )      |   |               | 33,562    |           |              |   |         |          |   |   | 30,349    |          
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|                                      |                                     | Net income (loss) before equity in earnings of subsidiaries |   |        | (9,932   | ) |   |               | (5,966 | ) |               |           | 100,462   |              |   |          | 219      |   |   |           | 84,783    | 
|                                      | Equity in earnings of subsidiaries  |                                                             |   | 94,715 |          |   |   | 55,006        |        |   |               | 60,799    |           |              |   | (210,520 | )        |   |   |          |          
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  
|                                      |                                     | Net income                                                  |   | $      | 84,783   |   |   | $             | 49,040 |   |               | $         | 161,261   |              |   | $        | (210,301 | ) |   | $         | 84,783    | 
|                                      |                                     |                                                             |   |        |          |   |   |               |        |   |               |           |           |              |  

|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |   |          |          |   |        |           |           | 
|------------------------------------- | ------------------------------------ | ----------------------------------------------------------- | - | ------- | -------- | - | ------ | ------------- | ------ | - | ------------- | --------- | --------- | ------------ | - | -------- | -------- | - | ------ | --------- | --------- | 
|Consolidating Statement of Operations |                                      | Platinum                                                    |   |         | Platinum |   |        | Non-guarantor |        |   | Consolidating |           |           |             
|For the Year Ended December 31, 2003  |                                      | Holdings                                                    |   |         | Finance  |   |        | Subsidiaries  |        |   | Adjustments   |           |           | Consolidated |  
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|Revenue:                              |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |   |          |          |   |        |          
|                                      | Net premiums earned                  |                                                             | $ |        |          |   | $      |              |        |   | $             | 1,067,527 |           |              | $ |         |          |   | $      | 1,067,527 |          
|                                      | Net investment income                |                                                             |   | 46      |          |   |        | 121           |        |   |               | 57,478    |           |              |   |         |          |   |        | 57,645    |          
|                                      | Net realized gains on investments    |                                                             |   |        |          |   |        |              |        |   |               | 2,781     |           |              |   |         |          |   |        | 2,781     |          
|                                      | Other income                         |                                                             |   |        |          |   |        |              |        |   |               | 3,343     |           |              |   |         |          |   |        | 3,343     |          
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|                                      |                                      | Total revenue                                               |   |         | 46       |   |        |               | 121    |   |               |           | 1,131,129 |              |   |          |         |   |        |           | 1,131,296 | 
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|Expenses:                             |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |   |          |          |   |        |          
|                                      | Losses and loss adjustment expenses  |                                                             |   |        |          |   |        |              |        |   |               | 584,171   |           |              |   |         |          |   |        | 584,171   |          
|                                      | Acquisition expenses                 |                                                             |   |        |          |   |        |              |        |   |               | 256,248   |           |              |   | (5,022   | )        |   |        | 251,226   |          
|                                      | Operating expenses                   |                                                             |   | 22,657  |          |   |        | 338           |        |   |               | 64,373    |           |              |   | 5,227    |          |   |        | 92,595    |          
|                                      | Net foreign currency exchange losses |                                                             |   | 4       |          |   |        |              |        |   |               | 110       |           |              |   |         |          |   |        | 114       |          
|                                      | Interest expense                     |                                                             |   | 344     |          |   |        | 9,148         |        |   |               |          |           |              |   |         |          |   |        | 9,492     |          
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|                                      |                                      | Total expenses                                              |   |         | 23,005   |   |        |               | 9,486  |   |               |           | 904,902   |              |   |          | 205      |   |        |           | 937,598   | 
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|                                      |                                      | Income (loss) before income tax expense                     |   |         | (22,959  | ) |        |               | (9,365 | ) |               |           | 226,227   |              |   |          | (205     | ) |        |           | 193,698   | 
|Income tax expense (benefit)          |                                      |                                                             |  |         |          |   | (3,278 | )             |        |   | 52,153        |           |           |              |  |          |          |   | 48,875 |          
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|                                      |                                      | Net income (loss) before equity in earnings of subsidiaries |   |         | (22,959  | ) |        |               | (6,087 | ) |               |           | 174,074   |              |   |          | (205     | ) |        |           | 144,823   | 
|                                      | Equity in earnings of subsidiaries   |                                                             |   | 167,782 |          |   |        | 86,576        |        |   |               | 92,374    |           |              |   | (346,732 | )        |   |        |          |          
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  
|                                      |                                      | Net income                                                  |   | $       | 144,823  |   |        | $             | 80,489 |   |               | $         | 266,448   |              |   | $        | (346,937 | ) |        | $         | 144,823   | 
|                                      |                                      |                                                             |   |         |          |   |        |               |        |   |               |           |           |              |  

F-39



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |          |          |   |   |          |            |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------- | -------- | -------- | -------- | -------- | - | ------- | ------------- | - | - | ------------- | ---------- | - | ------------ | -------- | -------- | - | - | -------- | ---------- | -
|Condensed Consolidating                              |                                                                                       |          |          |          |          |   |         |               |   |  
|Statement of Cash Flows                              |                                                                                       | Platinum |          |          | Platinum |   |         | Non-guarantor |   |   | Consolidating |            |   |             
|For the Year Ended December 31, 2005                 |                                                                                       | Holdings |          |          | Finance  |   |         | Subsidiaries  |   |   | Adjustments   |            |   | Consolidated |         
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Net cash provided by (used in) operating activities  |                                                                                       | $        | (4,999   | )        |          | $ | (16,340 | )             |   | $ | 619,013       |            |   | $            |         |          |   | $ | 597,674  |           
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Investing Activities:                                |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |          |          |   |   |          |           
|                                                     | Proceeds from sale of available-for-sale fixed maturity
    securities                |          |          |         |          |   |         | 3,026         |   |   |               | 888,773    |   |              |          |         |   |   |          | 891,799    |  
|                                                     | Proceeds from maturity or paydown of available-for-sale fixed
    maturity securities |          |          |         |          |   |         | 439           |   |   |               | 97,492     |   |              |          |         |   |   |          | 97,931     |  
|                                                     | Proceeds from sale of subsidiary shares                                               |          |          |         |          |   |         |              |   |   |               | 193,000    |   |              |          | (193,000 | ) |   |          |           |  
|                                                     | Purchase of subsidiary shares                                                         |          |          |         |          |   |         |              |   |   |               | (139,902   | ) |              |          | 139,902  |   |   |          |           |  
|                                                     | Acquisition of available-for-sale fixed maturity securities                           |          |          |         |          |   |         | (12,347       | ) |   |               | (1,699,158 | ) |              |          |         |   |   |          | (1,711,505 | )
|                                                     | Dividends from subsidiaries                                                           |          |          | 17,000   |          |   |         |              |   |   |               |           |   |              |          | (17,000  | ) |   |          |           |  
|                                                     | Decrease in short-term investments                                                    |          |          |         |          |   |         |              |   |   |               | (8,793     | ) |              |          |         |   |   |          | (8,793     | )
|                                                     | Contributions to subsidiaries                                                         |          |          | (477,500 | )        |   |         | (75,100       | ) |   |               |           |   |              |          | 552,600  |   |   |          |           |  
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Net cash provided by (used in) investing activities  |                                                                                       |          | (460,500 | )        |          |   | (83,982 | )             |   |   | (668,588      | )          |   |              | 482,502  |          |   |   | (730,568 | )         
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Financing Activities:                                |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |          |          |   |   |          |           
|                                                     | Dividends paid to shareholders                                                        |          |          | (14,775  | )        |   |         |              |   |   |               | (17,000    | ) |              |          | 17,000   |   |   |          | (14,775    | )
|                                                     | Proceeds from exercise of share options                                               |          |          | 15,026   |          |   |         |              |   |   |               |           |   |              |          |         |   |   |          | 15,026     |  
|                                                     | Proceeds from issuance of common shares                                               |          |          | 425,757  |          |   |         | 139,902       |   |   |               |           |   |              |          | (139,902 | ) |   |          | 425,757    |  
|                                                     | Proceeds from issuance of debt                                                        |          |          |         |          |   |         | 246,900       |   |   |               |           |   |              |          |         |   |   |          | 246,900    |  
|                                                     | Proceeds from issuance of preferred shares                                            |          |          | 167,509  |          |   |         |              |   |   |               |           |   |              |          |         |   |   |          | 167,509    |  
|                                                     | Capital contribution from parent                                                      |          |          |         |          |   |         |              |   |   |               | 552,600    |   |              |          | (552,600 | ) |   |          |           |  
|                                                     | Purchase of common shares                                                             |          |          |         |          |   |         | (193,000      | ) |   |               |           |   |              |          | 193,000  |   |   |          |           |  
|                                                     | Repurchase of debt obligations                                                        |          |          |         |          |   |         | (96,674       | ) |   |               |           |   |              |          |         |   |   |          | (96,674    | )
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Net cash used in financing activities                |                                                                                       |          | 593,517  |          |          |   | 97,128  |               |   |   | 535,600       |            |   |              | (482,502 | )        |   |   | 743,743  |           
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Net increase (decrease) in cash and cash equivalents |                                                                                       |          | 128,018  |          |          |   | (3,194  | )             |   |   | 486,025       |            |   |              |         |          |   |   | 610,849  |           
|Cash and cash equivalents at beginning of year       |                                                                                       |          | 1,944    |          |          |   | 8,204   |               |   |   | 199,749       |            |   |              |         |          |   |   | 209,897  |           
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         
|Cash and cash equivalents at end of year             |                                                                                       | $        | 129,962  |          |          | $ | 5,010   |               |   | $ | 685,774       |            |   | $            |         |          |   | $ | 820,746  |           
|                                                     |                                                                                       |          |          |          |          |   |         |               |   |   |               |            |   |              |         

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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |         |         |   |   |          |            |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------- | -------- | ------- | ------- | -------- | - | ------ | ------------- | - | - | ------------- | ---------- | - | ------------ | ------- | ------- | - | - | -------- | ---------- | -
|Condensed Consolidating                              |                                                                                       |          |         |         |          |   |        |               |   |  
|Statement of Cash Flows                              |                                                                                       | Platinum |         |         | Platinum |   |        | Non-guarantor |   |   | Consolidating |            |   |             
|For the Year Ended December 31, 2004                 |                                                                                       | Holdings |         |         | Finance  |   |        | Subsidiaries  |   |   | Adjustments   |            |   | Consolidated |        
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Net cash provided by (used in) operating activities  |                                                                                       | $        | (8,400  | )       |          | $ | (436   | )             |   | $ | 723,569       |            |   | $            |        |         |   | $ | 714,733  |           
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Investing Activities:                                |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |         |         |   |   |          |           
|                                                     | Proceeds from sale of available-for-sale fixed maturity
    securities                |          |         |        |          |   |        | 998           |   |   |               | 497,947    |   |              |         |        |   |   |          | 498,945    |  
|                                                     | Proceeds from maturity or paydown of available-for-sale fixed
    maturity securities |          |         |        |          |   |        | 697           |   |   |               | 135,775    |   |              |         |        |   |   |          | 136,472    |  
|                                                     | Acquisition of available-for-sale fixed maturity securities                           |          |         |        |          |   |        | (2,972        | ) |   |               | (1,227,923 | ) |              |         |        |   |   |          | (1,230,895 | )
|                                                     | Dividends from subsidiaries                                                           |          |         | 22,000  |          |   |        |              |   |   |               |           |   |              |         | (22,000 | ) |   |          |           |  
|                                                     | Contributions to subsidiaries                                                         |          |         | (250    | )        |   |        |              |   |   |               |           |   |              |         | 250     |   |   |          |           |  
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Net cash provided by (used in) investing activities  |                                                                                       |          | 21,750  |         |          |   | (1,277 | )             |   |   | (594,201      | )          |   |              | (21,750 | )       |   |   | (595,478 | )         
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Financing Activities:                                |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |         |         |   |   |          |           
|                                                     | Dividends paid to shareholders                                                        |          |         | (13,807 | )        |   |        |              |   |   |               | (22,000    | ) |              |         | 22,000  |   |   |          | (13,807    | )
|                                                     | Proceeds from exercise of share options                                               |          |         | 7,406   |          |   |        |              |   |   |               |           |   |              |         |        |   |   |          | 7,406      |  
|                                                     | Proceeds from issuance of common shares                                               |          |         | 1,567   |          |   |        |              |   |   |               |           |   |              |         |        |   |   |          | 1,567      |  
|                                                     | Purchase of common shares                                                             |          |         | (9,985  | )        |   |        |              |   |   |               |           |   |              |         |        |   |   |          | (9,985     | )
|                                                     | Capital contribution from parent                                                      |          |         |        |          |   |        |              |   |   |               | 250        |   |              |         | (250    | ) |   |          |           |  
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Net cash used in financing activities                |                                                                                       |          | (14,819 | )       |          |   |       |               |   |   | (21,750       | )          |   |              | 21,750  |         |   |   | (14,819  | )         
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Net increase (decrease) in cash and cash equivalents |                                                                                       |          | (1,469  | )       |          |   | (1,713 | )             |   |   | 107,618       |            |   |              |        |         |   |   | 104,436  |           
|Cash and cash equivalents at beginning of year       |                                                                                       |          | 3,413   |         |          |   | 9,917  |               |   |   | 92,131        |            |   |              |        |         |   |   | 105,461  |           
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        
|Cash and cash equivalents at end of year             |                                                                                       | $        | 1,944   |         |          | $ | 8,204  |               |   | $ | 199,749       |            |   | $            |        |         |   | $ | 209,897  |           
|                                                     |                                                                                       |          |         |         |          |   |        |               |   |   |               |            |   |              |        

F-41



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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |         |         |   |   |          |            |  
|--------------------------------------------------- | ------------------------------------------------------------------------------------- | -------- | ------- | ------- | -------- | - | ------- | ------------- | - | - | ------------- | ---------- | - | ------------ | ------- | ------- | - | - | -------- | ---------- | -
|Condensed Consolidating                             |                                                                                       |          |         |         |          |   |         |               |   |  
|Statement of Cash Flows                             |                                                                                       | Platinum |         |         | Platinum |   |         | Non-guarantor |   |   | Consolidating |            |   |             
|For the Year Ended December 31, 2003                |                                                                                       | Holdings |         |         | Finance  |   |         | Subsidiaries  |   |   | Adjustments   |            |   | Consolidated |        
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Net cash provided by (used in) operating activities |                                                                                       | $        | (21,103 | )       |          | $ | (7,571  | )             |   | $ | 411,981       |            |   | $            |        |         |   | $ | 383,307  |           
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Investing Activities:                               |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |         |         |   |   |          |           
|                                                    | Proceeds from sale of available-for-sale fixed maturity
    securities                |          |         |        |          |   |         |              |   |   |               | 393,245    |   |              |         |        |   |   |          | 393,245    |  
|                                                    | Proceeds from maturity or paydown of available-for-sale fixed
    maturity securities |          |         |        |          |   |         | 1,624         |   |   |               | 131,355    |   |              |         |        |   |   |          | 132,979    |  
|                                                    | Acquisition of available-for-sale fixed maturity securities                           |          |         |        |          |   |         | (4,152        | ) |   |               | (1,061,925 | ) |              |         |        |   |   |          | (1,066,077 | )
|                                                    | Other invested asset acquired                                                         |          |         |         |          |   |         |              |   |   |               | (6,910     | ) |              |         |        |   |   |          | (6,910     | )
|                                                    | Dividends from subsidiaries                                                           |          |         | 33,150  |          |   |         |              |   |   |               |           |   |              |         | (33,150 | ) |   |          |           |  
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Net cash provided by (used in) investing activities |                                                                                       |          | 33,150  |         |          |   | (2,528  | )             |   |   | (544,235      | )          |   |              | (33,150 | )       |   |   | (546,763 | )         
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Financing Activities:                               |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |         |         |   |   |          |           
|                                                    | Dividends paid to shareholders                                                        |          |         | (13,767 | )        |   |         |              |   |   |               | (33,150    | ) |              |         | 33,150  |   |   |          | (13,767    | )
|                                                    | Proceeds from exercise of share options                                               |          |         | 678     |          |   |         |              |   |   |               |           |   |              |         |        |   |   |          | 678        |  
|                                                    | Proceeds from issuance of common shares                                               |          |         | 520     |          |   |         |              |   |   |               |           |   |              |         |        |   |   |          | 520        |  
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Net cash used in financing activities               |                                                                                       |          | (12,569 | )       |          |   |        |               |   |   | (33,150       | )          |   |              | 33,150  |         |   |   | (12,569  | )         
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Net decrease in cash and cash equivalents           |                                                                                       |          | (522    | )       |          |   | (10,099 | )             |   |   | (165,404      | )          |   |              |        |         |   |   | (176,025 | )         
|Cash and cash equivalents at beginning of year      |                                                                                       |          | 3,935   |         |          |   | 20,016  |               |   |   | 257,535       |            |   |              |        |         |   |   | 281,486  |           
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        
|Cash and cash equivalents at end of year            |                                                                                       | $        | 3,413   |         |          | $ | 9,917   |               |   | $ | 92,131        |            |   | $            |        |         |   | $ | 105,461  |           
|                                                    |                                                                                       |          |         |         |          |   |         |               |   |   |               |            |   |              |        



|     |                 
|---- | ----------------
|(16) | Subsequent Event



F-42



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##### Table of Contents






PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


Index to Schedules to Consolidated Financial Statements


|                                                                                                          |  |      |     | 
|--------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                          |  | Page |    
|                                                                                                          |  |      |    
|Report of Independent Registered Public Accounting Firm                                                   |  |      | S-2 | 
|Schedule I Summary of Investments  Other Than
    Investments in Related Parties as of December 31, 2005 |  |      | S-3 | 
|Schedule II Condensed Financial Information of the
    Registrant                                         |  |      | S-4 | 
|Schedule III Supplementary Insurance Information for the
    years ended December 31, 2005, 2004 and 2003 |  |      | S-7 | 
|Schedule IV Reinsurance for the years ended
    December 31, 2005, 2004 and 2003                          |  |      | S-8 | 



S-1



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






10-K. 10-K.






| |             
| | ------------
| | /s/ KPMG LLP





S-2



---



##### Table of Contents



SCHEDULE I


PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES


Summary of Investments  Other Than Investments in
Related Parties


As of December 31, 2005


|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |         |           |           |        |         |           |           | 
|--------------------------- | -------------------------- | ---------------------------------------------------------------- | ------------------------------------------------ | ------------------------------- | ---------- | -------------- | --------- | ------------- | ------- | --------- | --------- | ------ | ------- | --------- | --------- | 
|                            |                            |                                                                  |                                                  |                                 |            | Amount at      |          
|                            |                            |                                                                  |                                                  |                                 |            | Which Shown in |          
|                            |                            | Cost*                                                            |                                                  |                                 | Fair Value |                |           | Balance Sheet |        
|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |        
|                            |                            | ($ in thousands)                                                 |                                                 
|Fixed maturity securities:  |                            |                                                                  |                                                  |                                 |            |                |           |               |         |           |           |       
|                            | Bonds:                     |                                                                  |                                                  |                                 |            |                |           |               |         |           |           |        |        
|                            |                            | United States Government and government agencies and authorities |                                                  | $                               | 232,531    |                |           | $             | 230,062 |           |           | $      | 230,062 |          
|                            |                            |                                                                  | State, municipalities and political subdivisions |                                 |            | 182,949        |           |               |         | 180,526   |           |        |         | 180,526   |          
|                            |                            |                                                                  | Foreign governments                              |                                 |            | 108,426        |           |               |         | 107,669   |           |        |         | 107,669   |          
|                            |                            |                                                                  | Foreign corporate                                |                                 |            | 227,576        |           |               |         | 222,987   |           |        |         | 222,987   |          
|                            |                            |                                                                  | Public utilities                                 |                                 |            | 128,432        |           |               |         | 126,211   |           |        |         | 126,211   |          
|                            |                            |                                                                  | All other corporate                              |                                 |            | 2,092,319      |           |               |         | 2,058,696 |           |        |         | 2,058,696 |          
|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |        
|                            |                            |                                                                  |                                                  | Total bonds                     |            |                | 2,972,233 |               |         |           | 2,926,151 |        |         |           | 2,926,151 | 
|                            | Redeemable preferred stock |                                                                  |                                                  | 63,060                          |            |                |           | 61,552        |         |           |           | 61,552 |        
|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |        
|                            |                            |                                                                  |                                                  | Total fixed maturity securities |            |                | 3,035,293 |               |         |           | 2,987,703 |        |         |           | 2,987,703 | 
|Preferred stock             |                            |                                                                  | 8,735                                            |                                 |            |                | 8,186     |               |         |           | 8,186     |       
|Other long term investments |                            |                                                                  | 5,000                                            |                                 |            |                | 5,000     |               |         |           | 5,000     |       
|Short-term investments      |                            |                                                                  | 8,793                                            |                                 |            |                | 8,793     |               |         |           | 8,793     |       
|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |        
|                            |                            |                                                                  |                                                  | Total investments               |            | $              | 3,057,821 |               |         | $         | 3,009,682 |        |         | $         | 3,009,682 | 
|                            |                            |                                                                  |                                                  |                                 |            |                |           |               |        






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Original cost of fixed maturity securities reduced by repayments
    and adjusted for amortization of premiums and discounts.

S-3



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##### Table of Contents



SCHEDULE II


PLATINUM UNDERWRITERS HOLDINGS, LTD.


(Parent Company)


CONDENSED BALANCE SHEETS


December 31, 2005 and 2004


|                                     |                                                                                                                                            |                         |                                            |           |           |           |           |         |           |           | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------- | ------------------------------------------ | --------- | --------- | --------- | --------- | ------- | --------- | --------- | 
|                                     |                                                                                                                                            | 2005                    |                                            |           | 2004      |          
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                     |                                                                                                                                            | ($ in thousands, except |                                           
|                                     |                                                                                                                                            | share data)             |                                           
|ASSETS                              
|Investment in affiliates             |                                                                                                                                            | $                       | 1,410,794                                  |           |           | $         | 1,135,434 |        
|Cash                                 |                                                                                                                                            |                         | 129,962                                    |           |           |           | 1,945     |        
|Other assets                         |                                                                                                                                            |                         | 2,962                                      |           |           |           | 1,648     |        
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                     |                                                                                                                                            | Total assets            |                                            | $         | 1,543,718 |           |           | $       | 1,139,027 |          
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                    
|LIABILITIES AND SHAREHOLDERS EQUITY
|                                    
|Liabilities                          |                                                                                                                                            |                         |                                            |           |           |           |           |        
|                                     | Contract adjustment payments                                                                                                               |                         | $                                          |          |           |           | $         | 2,335   |          
|                                     | Accrued expenses and other liabilities                                                                                                     |                         |                                            | 3,469     |           |           |           | 3,689   |          
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                     |                                                                                                                                            |                         | Total liabilities                          |           |           | 3,469     |           |         |           | 6,024     | 
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|Shareholders equity                 |                                                                                                                                            |                         |                                            |           |           |           |           |        
|                                     | Preferred shares, $.01 par value, 25,000,000 shares
    authorized, 5,750,000 and 0 shares issued and outstanding,
    respectively        |                         |                                            | 57        |           |           |           |        |          
|                                     | Common shares, $.01 par value, 200,000,000 shares
    authorized, 59,126,675 and 43,087,407 shares issued and
    outstanding respectively |                         |                                            | 590       |           |           |           | 430     |          
|                                     | Additional paid-in capital                                                                                                                 |                         |                                            | 1,527,316 |           |           |           | 911,851 |          
|                                     | Unearned share grant compensation                                                                                                          |                         |                                            | (2,467    | )         |           |           |        |          
|                                     | Accumulated other comprehensive income (loss)                                                                                              |                         |                                            | (40,718   | )         |           |           | 12,252  |          
|                                     | Retained earnings                                                                                                                          |                         |                                            | 55,471    |           |           |           | 208,470 |          
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                     |                                                                                                                                            |                         | Total shareholders equity                 |           |           | 1,540,249 |           |         |           | 1,133,003 | 
|                                     |                                                                                                                                            |                         |                                            |           |           |          
|                                     |                                                                                                                                            |                         | Total liabilities and shareholders equity |           | $         | 1,543,718 |           |         | $         | 1,139,027 | 
|                                     |                                                                                                                                            |                         |                                            |           |           |          

S-4



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##### Table of Contents



SCHEDULE II


PLATINUM UNDERWRITERS HOLDINGS, LTD.


(Parent Company)


CONDENSED STATEMENTS OF OPERATIONS


For the years ended December 31, 2005, 2004 and 2003


|                                                |                                                    |                                              |          |          |          |   |        |        |        |  |         |         |         | 
|----------------------------------------------- | -------------------------------------------------- | -------------------------------------------- | -------- | -------- | -------- | - | ------ | ------ | ------ |  | ------- | ------- | ------- | 
|                                                |                                                    | 2005                                         |          |          | 2004     |   |        | 2003   |       
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|                                                |                                                    | ($ in thousands)                             |         
|Revenues:                                       |                                                    |                                              |          |          |          |   |        |        |        |  |         |        
|                                                | Net investment income                              |                                              | $        | 1,724    |          |   | $      | 53     |        |  | $       | 46      |        
|                                                | Other income                                       |                                              |          | 7,036    |          |   |        | 2,944  |        |  |         |        |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|                                                |                                                    |                                              | 8,760    |          |          |   | 2,997  |        |        |  | 46      |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|Expenses:                                       |                                                    |                                              |          |          |          |   |        |        |        |  |         |        
|                                                | Interest expenses                                  |                                              |          | 71       |          |   |        | 207    |        |  |         | 344     |        
|                                                | Operating expenses                                 |                                              |          | 13,395   |          |   |        | 12,722 |        |  |         | 22,661  |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|                                                |                                                    | Total expenses                               |          |          | 13,466   |   |        |        | 12,929 |  |         |         | 23,005  | 
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|Net loss before equity in earnings of affiliate |                                                    |                                              | (4,706   | )        |          |   | (9,932 | )      |        |  | (22,959 | )      
|Equity in earnings (loss) of affiliates         |                                                    |                                              | (132,781 | )        |          |   | 94,715 |        |        |  | 167,782 |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|                                                |                                                    | Net income (loss) before preferred dividends |          |          | (137,487 | ) |        |        | 84,783 |  |         |         | 144,823 | 
|Preferred dividends                             |                                                    |                                              | 737      |          |          |   |       |        |        |  |        |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       
|                                                | Net income (loss) available to common shareholders |                                              | $        | (138,224 | )        |   | $      | 84,783 |        |  | $       | 144,823 |        
|                                                |                                                    |                                              |          |          |          |   |        |        |       

S-5



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##### Table of Contents



SCHEDULE II


PLATINUM UNDERWRITERS HOLDINGS, LTD.


(Parent Company)


CONDENSED STATEMENTS OF CASH FLOWS


For the years ended December 31, 2005, 2004 and 2003


($ in thousands)


|                      |                                                                             |                                         |                                                      |          |        |          |   |         |       |         |   |         |        |         |  
|--------------------- | --------------------------------------------------------------------------- | --------------------------------------- | ---------------------------------------------------- | -------- | ------ | -------- | - | ------- | ----- | ------- | - | ------- | ------ | ------- | -
|                      |                                                                             | 2005                                    |                                                      |          | 2004   |          |   | 2003    |      
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|Operating Activities: |                                                                             |                                         |                                                      |          |        |          |   |         |       |         |   |        
|                      | Net loss before equity in earnings of affiliates                            |                                         | $                                                    | (4,706   | )      |          | $ | (9,932  | )     |         | $ | (22,959 | )     
|                      | Adjustments to reconcile net income to net cash provided in
    operations: |                                         |                                                      |          |        |          |   |         |       |         |   |         |       
|                      |                                                                             | Share based compensation                |                                                      |          | 2,313  |          |   |         | 1,777 |         |   |         | 5,510  |        
|                      |                                                                             | Depreciation and amortization           |                                                      |          | 129    |          |   |         | 125   |         |   |         |       |        
|                      |                                                                             | Changes in other assets and liabilities |                                                      |          | (2,735 | )        |   |         | (369  | )       |   |         | (3,654 | )      
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                      |                                                                             |                                         | Net cash used in operating activities                |          |        | (4,999   | ) |         |       | (8,399  | ) |         |        | (21,103 | )
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                     
|Investing Activities: |                                                                             |                                         |                                                      |          |        |          |   |         |       |         |   |        
|                      | Dividends and distributions from subsidiaries                               |                                         |                                                      | 17,000   |        |          |   | 22,000  |       |         |   | 33,150  |       
|                      | Contributions to subsidiaries                                               |                                         |                                                      | (477,500 | )      |          |   | (250    | )     |         |   |        |       
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                      |                                                                             |                                         | Net cash provided by (used in) investing activities  |          |        | (460,500 | ) |         |       | 21,750  |   |         |        | 33,150  |  
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|Financing Activities: |                                                                             |                                         |                                                      |          |        |          |   |         |       |         |   |        
|                      | Dividends paid to shareholders                                              |                                         |                                                      | (14,775  | )      |          |   | (13,807 | )     |         |   | (13,767 | )     
|                      | Proceeds from exercise of share options                                     |                                         |                                                      | 15,026   |        |          |   | 7,406   |       |         |   | 678     |       
|                      | Net proceeds from issuance of common shares                                 |                                         |                                                      | 425,757  |        |          |   | 1,566   |       |         |   | 520     |       
|                      | Net proceeds from issuance of preferred shares                              |                                         |                                                      | 167,509  |        |          |   |         |       |         |   |        |       
|                      | Purchase of common shares                                                   |                                         |                                                      |         |        |          |   | (9,985  | )     |         |   |        |       
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                      |                                                                             |                                         | Net cash (used in) provided by financing activities  |          |        | 593,517  |   |         |       | (14,820 | ) |         |        | (12,569 | )
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                      |                                                                             |                                         | Net increase (decrease) in cash and cash equivalents |          |        | 128,018  |   |         |       | (1,469  | ) |         |        | (522    | )
|                      | Cash and cash equivalents at beginning of year                              |                                         |                                                      | 1,944    |        |          |   | 3,413   |       |         |   | 3,935   |       
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      
|                      | Cash and cash equivalents at end of year                                    |                                         | $                                                    | 129,962  |        |          | $ | 1,944   |       |         | $ | 3,413   |       
|                      |                                                                             |                                         |                                                      |          |        |          |   |         |      

S-6



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##### Table of Contents



SCHEDULE III


PLATINUM UNDERWRITERS HOLDINGS, LTD.


SUPPLEMENTARY INSURANCE INFORMATION


|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             |  |   |         |         |  |  |   |        |  |   |         |           | 
|----------------------------- | ------------------- | ---------------- | - | ---------- | ---------- |  | - | --------- | --------- | ------------ | ---------- | ------- | ------- | ---------- | ---------- | --- | ---------- | ------------ | ---------- | ----------- | --------- | ------ | ----------- | - | ------- | --------- | - | ------- | ----------- |  | - | ------- | ------- |  |  | - | ------ |  | - | ------- | --------- | 
|                              |                     |                  |   | Net Unpaid |            |  |   |           |           |              |            |         |         |            | Losses and |     |            | Amortization |            |             |           |        |            
|                              |                     | Deferred         |   |            | Losses and |  |   |           |           | Other Policy |            |         |         |            |            |     | Loss       |              |            | of Deferred |           |        |             |   |        
|                              |                     | Policy           |   |            | Loss       |  |   | Net       |           |              | Claims and |         |         |            |            | Net |            |              | Adjustment |             |           | Policy |             |   | Other   |           |   |        
|                              |                     | Acquisition      |   |            | Adjustment |  |   | Unearned  |           |              | Benefits   |         |         | Net Earned |            |     | Investment |              |            | Expenses    |           |        | Acquisition |   |         | Operating |   |         | Net Written | 
|Period                        |                     | Costs            |   |            | Expenses   |  |   | Premiums  |           |              | Payable    |         |         | Premium    |            |     | Income     |              |            | Incurred    |           |        | Costs       |   |         | Expenses  |   |         | Premiums    | 
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|                              |                     | ($ in thousands) |  
|Year ended December 31, 2005: |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             |  |   |         |         |  |  |   |        |  |   |        
|                              | Property and Marine |                  | $ | 14,357     |            |  | $ | 816,328   |           |              | $          | 66,741  |         |            |            |     |            |              | $          | 569,173     |           |        |             |   |         |           | $ | 756,742 |             |  | $ | 70,005  |         |  |  |   |        |  | $ | 575,055 |          
|                              | Casualty            |                  |   | 73,622     |            |  |   | 1,107,316 |           |              |            | 292,513 |         |            |            |     |            |              |            | 789,629     |           |        |             |   |         |           |   | 511,609 |             |  |   | 140,758 |         |  |  |   |        |  |   | 809,031 |          
|                              | Finite Risk         |                  |   | 42,821     |            |  |   | 345,011   |           |              |            | 134,865 |         |            |            |     |            |              |            | 355,921     |           |        |             |   |         |           |   | 237,074 |             |  |   | 88,797  |         |  |  |   |        |  |   | 333,636 |          
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|                              |                     | Total            |   |            | 130,800    |  |   |           | 2,268,655 |              |            |         | 494,119 |            |            |     |           |              |            |             | 1,714,723 |        |             |   | 129,445 |           |   |         | 1,505,425   |  |   |         | 299,560 |  |  |   | 14,158 |  |   |         | 1,717,722 | 
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|Year ended December 31, 2004: |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             |  |   |         |         |  |  |   |        |  |   |        
|                              | Property and Marine |                  |   | 15,747     |            |  |   | 410,347   |           |              |            | 64,985  |         |            |            |     |            |              |            | 485,135     |           |        |             |   |         |           |   | 349,557 |             |  |   | 58,792  |         |  |  |   |        |  |   | 504,439 |          
|                              | Casualty            |                  |   | 72,454     |            |  |   | 715,314   |           |              |            | 278,634 |         |            |            |     |            |              |            | 611,893     |           |        |             |   |         |           |   | 418,355 |             |  |   | 118,734 |         |  |  |   |        |  |   | 677,399 |          
|                              | Finite Risk         |                  |   | 47,837     |            |  |   | 253,566   |           |              |            | 155,917 |         |            |            |     |            |              |            | 350,907     |           |        |             |   |         |           |   | 251,892 |             |  |   | 46,781  |         |  |  |   |        |  |   | 464,175 |          
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|                              |                     | Total            |   |            | 136,038    |  |   |           | 1,379,227 |              |            |         | 499,536 |            |            |     |           |              |            |             | 1,447,935 |        |             |   | 84,532  |           |   |         | 1,019,804   |  |   |         | 224,307 |  |  |   | 13,196 |  |   |         | 1,646,013 | 
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|Year ended December 31, 2003: |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             |  |   |         |         |  |  |   |        |  |   |        
|                              | Property and Marine |                  |   | 9,076      |            |  |   | 231,719   |           |              |            | 44,667  |         |            |            |     |            |              |            | 355,556     |           |        |             |   |         |           |   | 169,944 |             |  |   | 48,756  |         |  |  |   |        |  |   | 352,908 |          
|                              | Casualty            |                  |   | 61,181     |            |  |   | 320,585   |           |              |            | 224,611 |         |            |            |     |            |              |            | 391,170     |           |        |             |   |         |           |   | 266,836 |             |  |   | 87,620  |         |  |  |   |        |  |   | 474,000 |          
|                              | Finite Risk         |                  |   | 9,050      |            |  |   | 179,614   |           |              |            | 30,578  |         |            |            |     |            |              |            | 320,801     |           |        |             |   |         |           |   | 147,391 |             |  |   | 90,864  |         |  |  |   |        |  |   | 345,234 |          
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 
|                              |                     | Total            |   | $          | 79,307     |  |   | $         | 731,918   |              |            | $       | 299,856 |            |            |     |           |              |            | $           | 1,067,527 |        |             | $ | 57,645  |           |   | $       | 584,171     |  |   | $       | 227,240 |  |  | $ | 92,595 |  |   | $       | 1,172,142 | 
|                              |                     |                  |   |            |            |  |   |           |           |              |            |         |         |            |            |     |            |              |            |             |           |        |             |   |         |           |   |         |             | 

S-7



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##### Table of Contents



SCHEDULE IV


PLATINUM UNDERWRITERS HOLDINGS, LTD.


REINSURANCE


|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                |  |   |         |           |  |  |        |        | 
|---------------------------------------- | ----------------------------- | ------------------- | ----- |  | -------------- | ------------ |  | --------- | ------ | ------ | ------------- | - | ------- | -------------- |  | - | ------- | --------- |  |  | ------ | ------ | 
|                                         |                               |                     |       |  |                | Assumed From |  |           |        |        | Percentage of |  
|                                         |                               | Direct              |       |  | Ceded to Other |              |  | Other     |        |        |               |   | Amount  |               
|Description                              |                               | Amount              |       |  | Companies      |              |  | Companies |        |        | Net Amount    |   |         | Assumed to Net | 
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         |                               | ($ in thousands)    |      
|Property and liability premiums written: |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                |  |   |         |           |  | 
|                                         | Year ended December 31, 2005: |                     |       |  |                |              |  |           |        |        |               |   |         |                |  |   |         |           |  |  |       
|                                         |                               | Property and Marine |       |  |               |              |  | $         | 21,521 |        |               | $ | 596,576 |                |  | $ | 575,055 |           |  |  | 103.7% |       
|                                         |                               | Casualty            |       |  |               |              |  |           | 133    |        |               |   | 809,164 |                |  |   | 809,031 |           |  |  | 100.0% |       
|                                         |                               | Finite Risk         |       |  |               |              |  |           | 25,779 |        |               |   | 359,415 |                |  |   | 333,636 |           |  |  | 107.7% |       
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         |                               |                     | Total |  |                |             |  |           |        | 47,433 |               |   |         | 1,765,155      |  |   |         | 1,717,722 |  |  |        | 102.8% | 
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         | Year ended December 31, 2004: |                     |       |  |                |              |  |           |        |        |               |   |         |                |  |   |         |           |  |  |       
|                                         |                               | Property and Marine |       |  |               |              |  |           | 13,029 |        |               |   | 517,468 |                |  |   | 504,439 |           |  |  | 102.6% |       
|                                         |                               | Casualty            |       |  |               |              |  |           | 748    |        |               |   | 678,147 |                |  |   | 677,399 |           |  |  | 100.1% |       
|                                         |                               | Finite Risk         |       |  |               |              |  |           |       |        |               |   | 464,175 |                |  |   | 464,175 |           |  |  | 100.0% |       
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         |                               |                     | Total |  |                |             |  |           |        | 13,777 |               |   |         | 1,659,790      |  |   |         | 1,646,013 |  |  |        | 100.8% | 
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         | Year ended December 31, 2003: |                     |       |  |                |              |  |           |        |        |               |   |         |                |  |   |         |           |  |  |       
|                                         |                               | Property and Marine |       |  |               |              |  |           | 25,156 |        |               |   | 378,064 |                |  |   | 352,908 |           |  |  | 107.1% |       
|                                         |                               | Casualty            |       |  |               |              |  |           | 1,175  |        |               |   | 475,175 |                |  |   | 474,000 |           |  |  | 100.2% |       
|                                         |                               | Finite Risk         |       |  |               |              |  |           |       |        |               |   | 345,234 |                |  |   | 345,234 |           |  |  | 100.0% |       
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 
|                                         |                               |                     | Total |  |                |             |  |           | $      | 26,331 |               |   | $       | 1,198,473      |  |   | $       | 1,172,142 |  |  |        | 102.2% | 
|                                         |                               |                     |       |  |                |              |  |           |        |        |               |   |         |                | 

S-8