##### Table of Contents



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, 2006
 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.
  Bermuda
(State or other jurisdiction of 
incorporation or organization)
    
    98-0416483
(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 registeredCommon Shares, par value $0.01 per share
    
    New York Stock Exchange6.00% Series A Mandatory ConvertiblePreferred Shares par value $0.01 per share,liquidation preference $30.15 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 þ o
 o þ
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  þ o o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    2Item 1A.
    
    Risk Factors
    
    
    31Item 1B.
    
    Unresolved Staff Comments
    
    
    41Item 2.
    
    Properties
    
    
    41Item 3.
    
    Legal Proceedings
    
    
    42Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    42PART IIItem 5.
    
    Market For Registrants Common Equity, Related Shareholder Matters and
Issuer Purchases of Equity Securities
    
    
    42Item 6.
    
    Selected Financial Data
    
    
    44Item 7.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    46Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    76Item 8.
    
    Financial Statements and Supplementary Data
    
    
    78Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
    
    
    78Item 9A.
    
    Controls and Procedures
    
    
    78Item 9B.
    
    Other Information
    
    
    82PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    82Item 11.
    
    Executive Compensation
    
    
    82Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Shareholder Matters
    
    
    82Item 13.
    
    Certain Relationships and Related Transactions, and Director
Independence
    
    
    83Item 14.
    
    Principal Accountant Fees and Services
    
    
    83PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    83Signatures
    
    
    
    
    91Platinum Underwriters Holdings, Ltd. and Subsidiaries Consolidated Financial Statements
    
    
    F-1Index to Schedules to Consolidated Financial Statements
    
    
    S-1ExhibitsEX-10.61: TERMINATION ADDENDUMEX-10.62: CASUALTY AND SPECIALTY QUOTA SHARE RETROCESSION AGREEMENTEX-21.1: SUBSIDIARIESEX-23.1: INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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PART I
  Note On Forward-Looking Statements
    (1)
    
    significant weather-related or other natural or man-made disasters over which we have
no control;(2)
    
    the adequacy of our liability for unpaid losses and loss adjustment expenses,
including, but not limited to, losses from Hurricanes Katrina, Rita and Wilma and the
possibility that ultimate losses and loss adjustment expenses from these hurricanes may
prove to be materially different from estimates made to date;(3)
    
    the effectiveness of our loss limitation methods and pricing models;
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(4)
    
    our ability to maintain our A.M. Best Company, Inc. rating;(5)
    
    conducting operations in a competitive environment;(6)
    
    the cyclicality of the property and casualty reinsurance business;(7)
    
    tax, regulatory or legal restrictions or limitations applicable to us or the property
and casualty reinsurance business generally;(8)
    
    our ability to maintain our business relationships with reinsurance brokers;(9)
    
    the availability of retrocessional reinsurance on acceptable terms;(10)
    
    market volatility and interest rate and currency exchange rate fluctuation;(11)
    
    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; and(12)
    
    changes in our plans, strategies, objectives, expectations or intentions, which may
happen at any time at our discretion.
  
 Item 1. Business
 Industry Overview
 General
  Types of Reinsurance
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Property and Casualty Reinsurance
    Life and Annuity Reinsurance
  Excess-of-Loss and Proportional Reinsurance
    - 3 -




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Treaty and Facultative Reinsurance
    Finite Reinsurance
  Broker and Direct Reinsurance
   Retrocession
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Our Business
 General
   - 5 -




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Our Strategy
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
    
    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.
    
    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, 2006, we had a total
capitalization of $2,108,061,000. 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.
  Operating Segments
  Years Ended December 31,2006
    
    2005
    
    2004Property and MarineExcess-of-loss
    
    $
    318,260
    
    
    
    27
    %
    
    
    412,781
    
    
    
    24
    %
    
    $
    366,184
    
    
    
    22
    %Proportional
    
    
    106,669
    
    
    
    9
    %
    
    
    162,274
    
    
    
    9
    %
    
    
    138,255
    
    
    
    8
    %Subtotal Property
and Marine
    
    
    424,929
    
    
    
    36
    %
    
    
    575,055
    
    
    
    33
    %
    
    
    504,439
    
    
    
    30
    %CasualtyExcess-of-loss
    
    
    663,338
    
    
    
    56
    %
    
    
    676,276
    
    
    
    39
    %
    
    
    593,752
    
    
    
    37
    %Proportional
    
    
    94,337
    
    
    
    8
    %
    
    
    132,755
    
    
    
    8
    %
    
    
    83,647
    
    
    
    5
    %Subtotal Casualty
    
    
    757,675
    
    
    
    64
    %
    
    
    809,031
    
    
    
    47
    %
    
    
    677,399
    
    
    
    42
    %Finite RiskExcess-of-loss
    
    
    50,220
    
    
    
    4
    %
    
    
    63,628
    
    
    
    4
    %
    
    
    155,090
    
    
    
    9
    %Proportional
    
    
    (56,211
    )
    
    
    (4
    %)
    
    
    270,008
    
    
    
    16
    %
    
    
    309,085
    
    
    
    19
    %Subtotal Finite Risk
    
    
    (5,991
    )
    
    
    0
    %
    
    
    333,636
    
    
    
    20
    %
    
    
    464,175
    
    
    
    28
    %
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Years Ended December 31,2006
    
    2005
    
    2004Combined SegmentsExcess-of-loss
    
    
    1,031,818
    
    
    
    87
    %
    
    
    1,152,685
    
    
    
    67
    %
    
    
    1,115,026
    
    
    
    68
    %Proportional
    
    
    144,795
    
    
    
    13
    %
    
    
    565,037
    
    
    
    33
    %
    
    
    530,987
    
    
    
    32
    %Total
    
    $
    1,176,613
    
    
    
    100
    %
    
    
    1,717,722
    
    
    
    100
    %
    
    $
    1,646,013
    
    
    
    100
    %
  Years Ended December 31,2006
    
    2005
    
    2004Property and MarineUnited States
    
    $
    275,870
    
    
    
    23
    %
    
    
    401,270
    
    
    
    23
    %
    
    $
    320,506
    
    
    
    19
    %International
    
    
    149,059
    
    
    
    13
    %
    
    
    173,785
    
    
    
    10
    %
    
    
    183,933
    
    
    
    11
    %Subtotal Property
and Marine
    
    
    424,929
    
    
    
    36
    %
    
    
    575,055
    
    
    
    33
    %
    
    
    504,439
    
    
    
    30
    %CasualtyUnited States
    
    
    686,278
    
    
    
    58
    %
    
    
    718,103
    
    
    
    42
    %
    
    
    601,878
    
    
    
    37
    %International
    
    
    71,397
    
    
    
    6
    %
    
    
    90,928
    
    
    
    5
    %
    
    
    75,521
    
    
    
    5
    %Subtotal Casualty
    
    
    757,675
    
    
    
    64
    %
    
    
    809,031
    
    
    
    47
    %
    
    
    677,399
    
    
    
    42
    %Finite RiskUnited States
    
    
    (12,626
    )
    
    
    (1
    %)
    
    
    329,843
    
    
    
    19
    %
    
    
    428,024
    
    
    
    26
    %International
    
    
    6,635
    
    
    
    1
    %
    
    
    3,793
    
    
    
    1
    %
    
    
    36,151
    
    
    
    2
    %Subtotal Finite Risk
    
    
    (5,991
    )
    
    
    0
    %
    
    
    333,636
    
    
    
    20
    %
    
    
    464,175
    
    
    
    28
    %Combined SegmentsUnited States
    
    
    949,522
    
    
    
    80
    %
    
    
    1,449,216
    
    
    
    84
    %
    
    
    1,350,408
    
    
    
    82
    %International
    
    
    227,091
    
    
    
    20
    %
    
    
    268,506
    
    
    
    16
    %
    
    
    295,605
    
    
    
    18
    %Total
    
    $
    1,176,613
    
    
    
    100
    %
    
    
    1,717,722
    
    
    
    100
    %
    
    $
    1,646,013
    
    
    
    100
    %
 Property and Marine
  
    
    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.
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
    
    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
   
    
    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 various third party liability
coverages to both small and large insureds in both commercial and personal lines
predominantly on an excess-of-loss basis. This business includes 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 accountants, lawyers, medical professionals, architects and
engineers. 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.
    
    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 claims from
more than one employer.
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
    
    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 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.
    
    Accident and Health.We provide accident and health reinsurance, most often covering
employer self-insured or fully insured health plans, on a quota share and excess-of-loss
basis. We also write reinsurance of student health insurance, sports disability, Medicare
and Medicare supplement and other forms of accident and health insurance.
 Finite Risk
  
    
    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 premiums and losses
with the
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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 or catastrophic
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 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
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Underwriting and Risk Management
      - 12 -




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Risk Diversification
    Retrocessional Reinsurance
   - 13 -




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Claims Administration
    Unpaid Losses and Loss Adjustment Expenses
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2006
    
    
    2005
    
    
    2004Net unpaid losses and LAE as of the beginning
of the year
    
    $
    2,268,655
    
    
    
    1,379,227
    
    
    $
    731,918Net incurred related to:Current year
    
    
    811,250
    
    
    
    1,577,944
    
    
    
    1,101,820Prior years
    
    
    (50,648
    )
    
    
    (72,519
    )
    
    
    (82,016
    )Total net incurred losses and LAE
    
    
    760,602
    
    
    
    1,505,425
    
    
    
    1,019,804Net paid losses and LAE:Current year
    
    
    96,112
    
    
    
    210,306
    
    
    
    174,870Prior years
    
    
    624,477
    
    
    
    390,598
    
    
    
    205,889Total net paid losses and LAE
    
    
    720,589
    
    
    
    600,904
    
    
    
    380,759Effects of foreign currency exchange rate
changes
    
    
    17,559
    
    
    
    (15,093
    )
    
    
    8,264Net unpaid losses and LAE as of the end of
the year
    
    
    2,326,227
    
    
    
    2,268,655
    
    
    
    1,379,227Reinsurance recoverable
    
    
    42,255
    
    
    
    55,335
    
    
    
    1,728Gross unpaid losses and LAE at end of the year
    
    $
    2,368,482
    
    
    
    2,323,990
    
    
    $
    1,380,955
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2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006Net unpaid losses and LAE at end
of year
    
    $
    281,659
    
    
    
    731,918
    
    
    
    1,379,227
    
    
    
    2,268,655
    
    
    $
    2,326,227Net unpaid losses and LAE
re-estimated as of:One year later
    
    
    224,693
    
    
    
    649,902
    
    
    
    1,306,708
    
    
    
    2,215,635Two years later
    
    
    194,422
    
    
    
    604,891
    
    
    
    1,277,627Three years later
    
    
    176,884
    
    
    
    603,293Four years later
    
    
    175,683Net cumulative redundancy
    
    
    105,976
    
    
    
    128,625
    
    
    
    101,600
    
    
    
    53,020Adjustment for foreign currency
exchange
    
    
    13,736
    
    
    
    5,620
    
    
    
    (9,782
    )
    
    
    3,984Cumulative redundancy excluding
foreign currency exchange
    
    
    119,712
    
    
    
    134,245
    
    
    
    91,818
    
    
    
    57,004Net cumulative paid losses and LAE
as of:One year later
    
    
    41,709
    
    
    
    205,889
    
    
    
    388,700
    
    
    
    624,006Two years later
    
    
    62,604
    
    
    
    265,376
    
    
    
    536,351Three years later
    
    
    73,908
    
    
    
    320,399Four years later
    
    
    90,982Gross liability-end of year
    
    
    281,659
    
    
    
    736,934
    
    
    
    1,380,955
    
    
    
    2,323,990
    
    
    
    2,368,482Reinsurance recoverable
    
    
    
    
    
    
    5,016
    
    
    
    1,728
    
    
    
    55,335
    
    
    
    42,255Net liability-end of year
    
    
    281,659
    
    
    
    731,918
    
    
    
    1,379,227
    
    
    
    2,268,655
    
    
    
    2,326,227Gross liability-re-estimated
    
    
    175,683
    
    
    
    608,404
    
    
    
    1,279,319
    
    
    
    2,269,819Gross cumulative redundancy
    
    $
    105,976
    
    
    
    128,530
    
    
    
    101,636
    
    
    
    54,171
 Investments
  General Investment Guidelines
  - 17 -




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Classification and Valuation
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U.S. Government
    
    $
    153,794Corporate bonds
    
    
    1,527,211Mortgage-backed and asset-backed securities
    
    
    1,328,967Municipal bonds
    
    
    197,598Foreign governments and states
    
    
    127,075Subtotal  fixed maturity securities
    
    
    3,334,645Preferred stocks
    
    
    10,772Short-term investments
    
    
    27,123Total
    
    $
    3,372,540
  Quality
   Fair Value
    
    
    % of TotalAaa
    
    $
    2,068,357
    
    
    
    61.8
    %Aa
    
    
    512,978
    
    
    
    15.3
    %A
    
    
    670,974
    
    
    
    20.1
    %Baa
    
    
    93,108
    
    
    
    2.8
    %Total
    
    $
    3,345,417
    
    
    
    100.0
    %
 Duration and maturity
  - 19 -




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AmortizedCost
    
    

    Fair ValueDue in one year or less
    
    $
    400,723
    
    
    $
    397,408Due from one to five years
    
    
    1,065,670
    
    
    
    1,051,975Due from five to ten years
    
    
    258,003
    
    
    
    249,685Due in ten or more years
    
    
    202,988
    
    
    
    198,319Mortgage and asset backed securities
    
    
    1,349,586
    
    
    
    1,328,967Total
    
    $
    3,276,970
    
    
    $
    3,226,354
 Competition
   Ratings and Collateral
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Employees
    - 21 -




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##### Table of Contents



Regulation
 General
  Bermuda Regulation
     Principal Representative.
 - 22 -




---



##### Table of Contents



Independent Approved Auditor.
 Loss Reserve Specialist.
 Approved Actuary.
 Statutory Financial Statements.
 Annual Statutory Financial Return.
 - 23 -




---



##### 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. - 24 -
    Table of Contents    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.
   - 25 -




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##### Table of Contents



U.S. Regulation
  U.S. Insurance Holding Company Regulation of Platinum Holdings, Platinum Regency and Platinum
Finance.
 - 26 -
    Table of Contents     U.S. Insurance Regulation of Platinum US.
   (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
 - 27 -




---



##### Table of Contents



investment income (excluding realized capital gains) in the three calendar years prior
to the preceding year which have not been distributed.
    U.K. Regulation
  Supervision.
 Solvency Requirements. - 28 -
    Table of Contents    Restrictions on Dividend Payments.
 Supervision of Management.
 Change of Control.
  Intervention and Enforcement.
  - 29 -




---



##### Table of Contents



Prudential Regulation.
    Ireland Regulation
  Available Information
 www.platinumre.com
 - 30 -




---



##### Table of Contents












Item 1A. Risk Factors




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




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




- 31 -




---



##### Table of Contents











3. 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.






- 32 -



---



##### Table of Contents



4. A downgrade in our financial strength ratings could adversely affect our ability to write
new business.
     - 33 -




---



##### Table of Contents



5. Increased competition could adversely affect our profitability.
     6. The property and casualty reinsurance business is historically cyclical, and we expect to
experience periods with excess underwriting capacity and unfavorable pricing.
  - 34 -
    Table of Contents    7. The imposition of U.S. corporate income tax on Platinum Holdings and its non-U.S.
subsidiaries could adversely affect our results of operations.
  8. 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.
   9. Retrocessional reinsurance may become unavailable on acceptable terms.
  - 35 -




---



##### Table of Contents



10. Our invested assets are subject to market volatility and interest rate and currency
exchange rate fluctuation.
   11. We could be adversely affected by the loss of one or more key executives or by an
inability to retain or replace qualified senior management.
  12. The current investigations into finite risk reinsurance products could have a material
adverse effect on our financial condition or results of operations.
    - 36 -




---



##### Table of Contents



13. It may be difficult to enforce service of process and judgments against us and our
officers and directors.
  14. There are limitations on the ownership, transfer and voting rights of our common shares.
    - 37 -




---



##### Table of Contents



15. Platinum Holdings is a holding company and, consequently, its cash flow is dependent on
dividends, interest and other permissible payments from its subsidiaries.
  - 38 -




---



##### Table of Contents



16. Losses from operations may deplete our capital base and create a need to obtain additional
capital that may not be readily available in the capital markets or only be available on
unfavorable terms.
  17. 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.
  - 39 -
    Table of Contents    18. A recently published IRS Revenue Ruling could be applied to recharacterize the insurance
arrangements between Platinum US and Platinum Bermuda.
  19. We may become subject to taxes in Bermuda after 2016.
  20. Bermuda could be subject to sanctions by a number of multinational organizations which
could adversely affect Bermuda companies.
  - 40 -




---



##### Table of Contents



21. The regulatory system under which we operate and potential changes thereto could
significantly and adversely affect our business.
    
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  - 41 -




---



##### Table of Contents



Item 3. Legal Proceedings
    
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market For Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
  Price Range ofCommon SharesYear
    
    High
    
    Low2006:First Quarter
    
    $
    32.30
    
    
    $
    28.00Second Quarter
    
    
    30.00
    
    
    
    26.14Third Quarter
    
    
    31.11
    
    
    
    27.34Fourth Quarter
    
    $
    31.41
    
    
    $
    29.51
 - 42 -




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##### Table of Contents



Price Range ofCommon SharesYear
    
    High
    
    Low2005:First Quarter
    
    $
    32.03
    
    
    $
    29.02Second Quarter
    
    
    32.15
    
    
    
    26.43Third Quarter
    
    
    35.21
    
    
    
    27.45Fourth Quarter
    
    $
    31.70
    
    
    $
    27.10
       Performance Graph
  - 43 -




---



##### Table of Contents



Total
Return to Shareholders
 
 Indexed Returns *Years Ending December 31,2002
    
    2003
    
    2004
    
    2004
    
    2006Platinum
    
    
    105.61
    
    
    
    121.69
    
    
    
    127.49
    
    
    
    128.69
    
    
    
    129.55S&P 500 Index
    
    
    97.98
    
    
    
    126.08
    
    
    
    139.80
    
    
    
    146.67
    
    
    
    169.84S&P 500 Property &
Casualty Index
    
    
    96.57
    
    
    
    122.07
    
    
    
    134.79
    
    
    
    155.16
    
    
    
    175.14
 
 *
    
    Index value at November 1, 2002  100.00  
 Item 6. Selected Financial Data
  - 44 -




---



##### Table of Contents



Five-Year Summary of Selected Financial Data
 St. Paul RePlatinum Underwriters Holdings, Ltd.
    
    (Predecessor)As of andfor the
    
    Period fromperiod from
    
    January 1,April 19, 2002
    
    2002through
    
    throughYears ended December 31,
    
    December 31,
    
    November 1,2006
    
    2005
    
    2004
    
    2003
    
    2002
    
    2002Statement of Operations
Data:Net premiums written
    
    $
    1,176.6
    
    
    
    1,717.7
    
    
    
    1,646.0
    
    
    
    1,172.1
    
    
    $
    298.1
    
    
    $
    1,007.0Net premiums earned
    
    
    1,336.7
    
    
    
    1,714.7
    
    
    
    1,447.9
    
    
    
    1,067.5
    
    
    
    107.1
    
    
    
    1,102.0Net investment income
    
    
    188.0
    
    
    
    129.4
    
    
    
    84.5
    
    
    
    57.6
    
    
    
    5.2Net losses and LAE
    
    
    760.6
    
    
    
    1,505.4
    
    
    
    1,019.8
    
    
    
    584.2
    
    
    
    60.4
    
    
    
    791.0Underwriting expenses
    
    
    357.2
    
    
    
    458.8
    
    
    
    381.0
    
    
    
    320.7
    
    
    
    37.6
    
    
    $
    319.0Net income (loss)
    
    
    329.7
    
    
    
    (137.5
    )
    
    
    84.8
    
    
    
    144.8
    
    
    
    6.4Basic earnings (loss) per
common share
    
    
    5.38
    
    
    
    (3.01
    )
    
    
    1.96
    
    
    
    3.37
    
    
    
    0.15Diluted earnings (loss)
per common share
    
    
    4.96
    
    
    
    (3.01
    )
    
    
    1.81
    
    
    
    3.09
    
    
    
    0.15Dividends declared per
common share
    
    $
    0.32
    
    
    
    0.32
    
    
    
    0.32
    
    
    
    0.32
    
    
    $
    
 - 45 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd.As of andfor theperiod fromApril 19, 2002throughYears ended December 31,
    
    December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Balance Sheet Data:Total investments and cash
    
    $
    4,228.9
    
    
    
    3,830.4
    
    
    
    2,456.9
    
    
    
    1,790.5
    
    
    $
    1,346.7Premiums receivable
    
    
    377.2
    
    
    
    567.4
    
    
    
    580.0
    
    
    
    487.4
    
    
    
    5.6Total assets
    
    
    5,093.6
    
    
    
    5,154.4
    
    
    
    3,422.0
    
    
    
    2,485.6
    
    
    
    1,644.9Unpaid losses and LAE
    
    
    2,368.5
    
    
    
    2,324.0
    
    
    
    1,381.0
    
    
    
    736.9
    
    
    
    281.7Unearned premiums
    
    
    349.8
    
    
    
    502.0
    
    
    
    502.4
    
    
    
    306.0
    
    
    
    191.0Debt obligations
    
    
    292.8
    
    
    
    292.8
    
    
    
    137.5
    
    
    
    137.5
    
    
    
    137.5Shareholders equity
    
    
    1,858.1
    
    
    
    1,540.2
    
    
    
    1,133.0
    
    
    
    1,067.2
    
    
    
    921.2Book value per common
share
    
    $
    28.33
    
    
    
    23.22
    
    
    
    26.30
    
    
    
    24.79
    
    
    $
    21.42
 
 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 our consolidated
financial statements and the related notes included on pages F-1 through F-46 of this Form 10-K and
Note on Forward-Looking Statements on page 1. Our 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 Estimates
  - 46 -




---



##### Table of Contents



Premiums Written and Earned
     - 47 -




---



##### Table of Contents



Unpaid Losses and LAE
    - 48 -




---



##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalDecember 31, 2006Gross case reserves
    
    $
    336,503
    
    
    
    269,447
    
    
    
    113,897
    
    
    $
    719,847Gross IBNR
    
    
    235,932
    
    
    
    1,198,432
    
    
    
    214,271
    
    
    
    1,648,635Total gross
unpaid losses
and LAE
    
    $
    572,435
    
    
    
    1,467,879
    
    
    
    328,168
    
    
    $
    2,368,482December 31, 2005Gross case reserves
    
    $
    292,722
    
    
    
    152,872
    
    
    
    66,151
    
    
    $
    511,745Gross IBNR
    
    
    570,783
    
    
    
    954,444
    
    
    
    287,018
    
    
    
    1,812,245Total gross
unpaid losses
and LAE
    
    $
    863,505
    
    
    
    1,107,316
    
    
    
    353,169
    
    
    $
    2,323,990
    - 49 -




---



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- 50 -




---



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Valuation of Investments
  - 51 -




---



##### Table of Contents



Risk Transfer
   Reinsurance Industry Conditions and Trends
   - 52 -




---



##### Table of Contents



Results of Operations
 Year Ended December 31, 2006 as Compared with the Year Ended December 31, 2005
  2006
    
    2005
    
    IncreaseNet income (loss)
    
    $
    329,657
    
    
    
    (137,487
    )
    
    $
    467,144
  Gross losses and LAE
    
    $
    654,090Retrocessional reinsurance
    
    
    (73,800
    )Net losses and LAE
    
    
    580,290Additional net premiums earned
    
    
    (46,666
    )Profit commissions
    
    
    (3,654
    )Net adverse impact on income before income taxes
    
    $
    529,970
   Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    1,275,200
    
    
    
    1,765,155
    
    
    $
    (489,955
    )Ceded premiums written
    
    
    98,587
    
    
    
    47,433
    
    
    
    51,154Net premiums written
    
    
    1,176,613
    
    
    
    1,717,722
    
    
    
    (541,109
    )
 - 53 -




---



##### Table of Contents



Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums earned
    
    
    1,434,282
    
    
    
    1,757,138
    
    
    
    (322,856
    )Ceded premiums earned
    
    
    97,581
    
    
    
    42,415
    
    
    
    55,166Net premiums earned
    
    $
    1,336,701
    
    
    
    1,714,723
    
    
    $
    (378,022
    )
     2006
    
    2005
    
    DecreaseNet losses and LAE
    
    $
    760,602
    
    
    
    1,505,425
    
    
    $
    (744,823
    )Net loss and LAE ratios
    
    
    56.9
    %
    
    
    87.8
    %
    
    (30.9) points
 - 54 -




---



##### Table of Contents



2006
    
    2005
    
    DecreaseNet acquisition expenses
    
    $
    285,923
    
    
    
    403,135
    
    
    $
    (117,212
    )Net acquisition expense ratios
    
    
    21.4
    %
    
    
    23.5
    %
    
    (2.1) points
    - 55 -




---



##### Table of Contents



Increase2006
    
    2005
    
    (decrease)Income taxes (benefit)
    
    $
    30,167
    
    
    
    (24,967
    )
    
    $
    55,134Effective tax rates
    
    
    8.4
    %
    
    
    15.4
    %
    
    (7.0) points
  - 56 -




---



##### Table of Contents



Year Ended December 31, 2005 as Compared with the Year Ended December 31, 2004
  2005
    
    2004
    
    DecreaseNet income (loss)
    
    $
    (137,487
    )
    
    
    84,783
    
    
    $
    (222,270
    )
  2005
    
    
    2004Gross losses and LAE
    
    $
    654,090
    
    
    $
    230,475Retrocessional reinsurance
    
    
    (73,800
    )
    
    
    Net losses and LAE
    
    
    580,290
    
    
    
    230,475Additional net premiums earned
    
    
    (46,666
    )
    
    
    (29,265
    )Profit commissions
    
    
    (3,654
    )
    
    
    (10,243
    )Net adverse impact on underwriting results
    
    $
    529,970
    
    
    $
    190,967
    2005
    
    
    2004
    
    

IncreaseGross premiums written
    
    $
    1,765,155
    
    
    
    1,659,790
    
    
    $
    105,365Ceded premiums written
    
    
    47,433
    
    
    
    13,777
    
    
    
    33,656Net premiums written
    
    
    1,717,722
    
    
    
    1,646,013
    
    
    
    71,709
 - 57 -




---



##### Table of Contents



2005
    
    
    2004
    
    

IncreaseGross premiums earned
    
    
    1,757,138
    
    
    
    1,465,058
    
    
    
    292,080Ceded premiums earned
    
    
    42,415
    
    
    
    17,123
    
    
    
    25,292Net premiums earned
    
    $
    1,714,723
    
    
    
    1,447,935
    
    
    $
    266,788
     2005
    
    2004
    
    IncreaseNet losses and LAE
    
    $
    1,505,425
    
    
    
    1,019,804
    
    
    $
    485,621Net loss and LAE ratios
    
    
    87.8
    %
    
    
    70.4
    %
    
    17.4 points
 - 58 -




---



##### Table of Contents



2005
    
    2004
    
    IncreaseNet acquisition expenses
    
    $
    403,135
    
    
    
    327,821
    
    
    $
    75,314Net acquisition expense ratios
    
    
    23.5
    %
    
    
    22.6
    %
    
    0.9 points
     - 59 -




---



##### Table of Contents



2005
    
    2004
    
    DecreaseIncome tax expense (benefit)
    
    $
    (24,967
    )
    
    
    30,349
    
    
    $
    (55,316
    )Effective tax rates
    
    
    15.4
    %
    
    
    26.4
    %
    
    (11.0) points
  Segment Information
  - 60 -




---



##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalYear ended December 31, 2006:Net premiums written
    
    $
    424,929
    
    
    
    757,675
    
    
    
    (5,991
    )
    
    $
    1,176,613Net premiums earned
    
    
    448,959
    
    
    
    764,341
    
    
    
    123,401
    
    
    
    1,336,701Net losses and LAE
    
    
    145,900
    
    
    
    522,815
    
    
    
    91,887
    
    
    
    760,602Net acquisition expenses
    
    
    70,905
    
    
    
    188,717
    
    
    
    26,301
    
    
    
    285,923Other underwriting expenses
    
    
    39,887
    
    
    
    27,022
    
    
    
    4,387
    
    
    
    71,296Segment underwriting income
    
    $
    192,267
    
    
    
    25,787
    
    
    
    826
    
    
    
    218,880Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187,987Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,090Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    738Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,872
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,194
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,805
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    359,824Ratios:Net loss and LAE
    
    
    32.5
    %
    
    
    68.4
    %
    
    
    74.5
    %
    
    
    56.9
    %Net acquisition expense
    
    
    15.8
    %
    
    
    24.7
    %
    
    
    21.3
    %
    
    
    21.4
    %Other underwriting expense
    
    
    8.9
    %
    
    
    3.5
    %
    
    
    3.6
    %
    
    
    5.3
    %Combined
    
    
    57.2
    %
    
    
    96.6
    %
    
    
    99.4
    %
    
    
    83.6
    %Year ended December 31, 2005:Net premiums written
    
    $
    575,055
    
    
    
    809,031
    
    
    
    333,636
    
    
    $
    1,717,722Net premiums earned
    
    
    569,173
    
    
    
    789,629
    
    
    
    355,921
    
    
    
    1,714,723Net losses and LAE
    
    
    756,742
    
    
    
    511,609
    
    
    
    237,074
    
    
    
    1,505,425Net acquisition expenses
    
    
    93,983
    
    
    
    194,397
    
    
    
    114,755
    
    
    
    403,135Other underwriting expenses
    
    
    26,074
    
    
    
    24,690
    
    
    
    4,905
    
    
    
    55,669Segment underwriting
income (loss)
    
    $
    (307,626
    )
    
    
    58,933
    
    
    
    (813
    )
    
    
    (249,506
    )Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129,445Net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,046
    )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
    )
 - 61 -




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##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalRatios:Net loss and LAE
    
    
    133.0
    %
    
    
    64.8
    %
    
    
    66.6
    %
    
    
    87.8
    %Net 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, 2004Net premiums written
    
    $
    504,439
    
    
    
    677,399
    
    
    
    464,175
    
    
    $
    1,646,013Net premiums earned
    
    
    485,135
    
    
    
    611,893
    
    
    
    350,907
    
    
    
    1,447,935Net losses and LAE
    
    
    349,557
    
    
    
    418,355
    
    
    
    251,892
    
    
    
    1,019,804Net acquisition expenses
    
    
    76,360
    
    
    
    151,649
    
    
    
    99,812
    
    
    
    327,821Other underwriting expenses
    
    
    27,827
    
    
    
    19,086
    
    
    
    6,224
    
    
    
    53,137Segment underwriting income
    
    $
    31,391
    
    
    
    22,803
    
    
    
    (7,021
    )
    
    
    47,173Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,532Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,955Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,211Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,196
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,268
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    115,132Ratios:Net loss and LAE
    
    
    72.1
    %
    
    
    68.4
    %
    
    
    71.8
    %
    
    
    70.4
    %Net 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
    %
 Property and Marine
  Year Ended December 31, 2006 as Compared with the Year Ended December 31, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    514,316
    
    
    
    596,576
    
    
    $
    (82,260
    )Ceded premiums written
    
    
    89,387
    
    
    
    21,521
    
    
    
    67,866Net premiums written
    
    
    424,929
    
    
    
    575,055
    
    
    
    (150,126
    )
 - 62 -




---



##### Table of Contents



Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums earned
    
    
    535,988
    
    
    
    586,500
    
    
    
    (50,512
    )Ceded premiums earned
    
    
    87,029
    
    
    
    17,327
    
    
    
    69,702Net premiums earned
    
    $
    448,959
    
    
    
    569,173
    
    
    $
    (120,214
    )
   2006
    
    2005
    
    DecreaseNet losses and LAE
    
    $
    145,900
    
    
    
    756,742
    
    
    $
    (610,842
    )Net loss and LAE ratios
    
    
    32.5
    %
    
    
    133.0
    %
    
    (100.5) points
   2006
    
    2005
    
    DecreaseNet acquisition expenses
    
    $
    70,905
    
    
    
    93,983
    
    
    $
    (23,078
    )Net acquisition expense ratios
    
    
    15.8
    %
    
    
    16.5
    %
    
    (0.7) point
 - 63 -




---



##### Table of Contents



Year Ended December 31, 2005 as Compared with the Year Ended December 31, 2004
  2005
    
    
    2004
    
    
    IncreaseGross premiums written
    
    $
    596,576
    
    
    
    517,468
    
    
    $
    79,108Ceded premiums written
    
    
    21,521
    
    
    
    13,029
    
    
    
    8,492Net premiums written
    
    
    575,055
    
    
    
    504,439
    
    
    
    70,616Gross premiums earned
    
    
    586,500
    
    
    
    501,040
    
    
    
    85,460Ceded premiums earned
    
    
    17,327
    
    
    
    15,905
    
    
    
    1,422Net premiums earned
    
    $
    569,173
    
    
    
    485,135
    
    
    $
    84,038
  - 64 -




---



##### Table of Contents



2005
    
    2004
    
    IncreaseNet losses and LAE
    
    $
    756,742
    
    
    
    349,557
    
    
    $
    407,185Net loss and LAE ratios
    
    
    133.0
    %
    
    
    72.1
    %
    
    60.9 points
   2005
    
    2004
    
    IncreaseNet acquisition expenses
    
    $
    93,983
    
    
    
    76,360
    
    
    $
    17,623Net acquisition expense ratios
    
    
    16.5
    %
    
    
    15.7
    %
    
    0.8 point
   Casualty
  - 65 -




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##### Table of Contents



Year Ended December 31, 2006 as Compared with the Year Ended December 31, 2005
  2006
    
    
    2005
    
    
    DecreaseGross premiums written
    
    $
    757,749
    
    
    
    809,164
    
    
    $
    (51,415
    )Ceded premiums written
    
    
    74
    
    
    
    133
    
    
    
    (59
    )Net premiums written
    
    
    757,675
    
    
    
    809,031
    
    
    
    (51,356
    )Gross premiums earned
    
    
    764,414
    
    
    
    790,290
    
    
    
    (25,876
    )Ceded premiums earned
    
    
    73
    
    
    
    661
    
    
    
    (588
    )Net premiums earned
    
    $
    764,341
    
    
    
    789,629
    
    
    $
    (25,288
    )
   2006
    
    2005
    
    IncreaseNet losses and LAE
    
    $
    522,815
    
    
    
    511,609
    
    
    $
    11,206Net loss and LAE ratios
    
    
    68.4
    %
    
    
    64.8
    %
    
    3.6 points
   Increase2006
    
    2005
    
    (decrease)Net acquisition expenses
    
    $
    188,717
    
    
    
    194,397
    
    
    $
    (5,680
    )Net acquisition expense ratios
    
    
    24.7
    %
    
    
    24.6
    %
    
    0.1 point
 - 66 -




---



##### Table of Contents



Year Ended December 31, 2005 as Compared with the Year Ended December 31, 2004
  Increase2005
    
    
    2004
    
    
    (decrease)Gross premiums written
    
    $
    809,164
    
    
    
    678,147
    
    
    $
    131,017Ceded premiums written
    
    
    133
    
    
    
    748
    
    
    
    (615
    )Net premiums written
    
    
    809,031
    
    
    
    677,399
    
    
    
    131,632Gross premiums earned
    
    
    790,290
    
    
    
    613,111
    
    
    
    177,179Ceded premiums earned
    
    
    661
    
    
    
    1,218
    
    
    
    (557
    )Net premiums earned
    
    $
    789,629
    
    
    
    611,893
    
    
    $
    177,736
   Increase2005
    
    2004
    
    (decrease)Net losses and LAE
    
    $
    511,609
    
    
    
    418,355
    
    
    $
    93,254Net loss and LAE ratios
    
    
    64.8
    %
    
    
    68.4
    %
    
    (3.6) points
  - 67 -




---



##### Table of Contents



Increase2005
    
    2004
    
    (decrease)Net acquisition expenses
    
    $
    194,397
    
    
    
    151,649
    
    
    $
    42,748Net acquisition expense ratios
    
    
    24.6
    %
    
    
    24.8
    %
    
    (0.2) point
   Finite Risk
  Year Ended December 31, 2006 as Compared with the Year Ended December 31, 2005
  2006
    
    
    2005
    
    
    DecreaseGross premiums written
    
    $
    3,135
    
    
    
    359,415
    
    
    $
    (356,280
    )Ceded premiums written
    
    
    9,126
    
    
    
    25,779
    
    
    
    (16,653
    )Net premiums written
    
    
    (5,991
    )
    
    
    333,636
    
    
    
    (339,627
    )
 - 68 -




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##### Table of Contents



2006
    
    
    2005
    
    
    DecreaseGross premiums earned
    
    
    133,880
    
    
    
    380,348
    
    
    
    (246,468
    )Ceded premiums earned
    
    
    10,479
    
    
    
    24,427
    
    
    
    (13,948
    )Net premiums earned
    
    $
    123,401
    
    
    
    355,921
    
    
    $
    (232,520
    )
   2006
    
    
    2005
    
    
    DecreaseNet losses and LAE
    
    $
    91,887
    
    
    
    237,074
    
    
    $
    (145,187
    )Net acquisition expenses
    
    
    26,301
    
    
    
    114,755
    
    
    
    (88,454
    )Net losses, LAE and
acquisition expenses
    
    $
    118,188
    
    
    
    351,829
    
    
    $
    (233,641
    )Net loss, LAE and
acquisition expense ratios
    
    
    95.8
    %
    
    
    98.8
    %
    
    (3.0) points
   Year Ended December 31, 2005 as Compared with the Year Ended December 31, 2004
  - 69 -




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##### Table of Contents



Increase2005
    
    
    2004
    
    
    (decrease)Gross premiums written
    
    $
    359,415
    
    
    
    464,175
    
    
    $
    (104,760
    )Ceded premiums written
    
    
    25,779
    
    
    
    
    
    
    
    25,779Net premiums written
    
    
    333,636
    
    
    
    464,175
    
    
    
    (130,539
    )Gross premiums earned
    
    
    380,348
    
    
    
    350,907
    
    
    
    29,441Ceded premiums earned
    
    
    24,427
    
    
    
    
    
    
    
    24,427Net premiums earned
    
    $
    355,921
    
    
    
    350,907
    
    
    $
    5,014
   Increase2005
    
    
    2004
    
    
    (decrease)Net losses and LAE
    
    $
    237,074
    
    
    
    251,892
    
    
    $
    (14,818
    )Net acquisition expenses
    
    
    114,755
    
    
    
    99,812
    
    
    
    14,943Net losses, LAE and
acquisition expenses
    
    $
    351,829
    
    
    
    351,704
    
    
    $
    125Net loss, LAE and acquisition
expense ratios
    
    
    98.8
    %
    
    
    100.2
    %
    
    (1.4) points
   - 70 -




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##### Table of Contents



Financial Condition, Liquidity and Capital Resources
 Financial Condition
  2006
    
    
    2005
    
    
    IncreaseCash and cash equivalents
    
    $
    851,652
    
    
    
    820,746
    
    
    $
    30,906Fixed maturity securities
    
    
    3,334,645
    
    
    
    2,987,703
    
    
    
    346,942Preferred stocks
    
    
    10,772
    
    
    
    8,186
    
    
    
    2,586Short-term investments
    
    
    27,123
    
    
    
    8,793
    
    
    
    18,330Total
    
    $
    4,224,192
    
    
    
    3,825,428
    
    
    $
    398,764
     - 71 -




---



##### Table of Contents



Sources of Liquidity
      - 72 -




---



##### Table of Contents



Liquidity Requirements
    - 73 -




---



##### Table of Contents



- 74 -




---



##### Table of Contents



Economic Conditions
  Capital Expenditures
  Off-Balance Sheet Arrangements
  Contractual Obligations
  1 - 3
    
    
    3 - 5Contractual Obligations
    
    Total
    
    
    Less than 1 year
    
    
    years
    
    
    Years
    
    
    More than 5 yearsSeries B Remarketed Notes due November
16, 2007 (1)
    
    $
    42,840
    
    
    
    42,840
    
    
    
    
    
    
    
    
    
    
    $
    Series B Notes due
June 1, 2017 (1)
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000Scheduled interest payments
    
    
    199,604
    
    
    
    21,479
    
    
    
    37,500
    
    
    
    37,500
    
    
    
    103,125Subtotal  Debt Obligations
    
    
    492,444
    
    
    
    64,319
    
    
    
    37,500
    
    
    
    37,500
    
    
    
    353,125Operating Leases (2)
    
    
    14,748
    
    
    
    2,707
    
    
    
    7,194
    
    
    
    3,880
    
    
    
    967Gross unpaid losses and LAE (3)
    
    $
    2,368,482
    
    
    
    646,063
    
    
    
    779,970
    
    
    
    427,186
    
    
    $
    515,263
 
 (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, 2006.
There are reinsurance contracts that have terms extending into 2007 under which
additional obligations will be incurred. - 75 -




---



##### Table of Contents



Current Outlook
        - 76 -




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
 Market and Credit Risk
   - 77 -




---



##### Table of Contents



Interest Rate Risk
  Interest Rate Shift in Basis Points- 100 bp
    
    - 50 bp
    
    Current
    
    + 50 bp
    
    + 100 bpTotal market value
    
    $
    3,423,278
    
    
    
    3,379,953
    
    
    
    3,334,645
    
    
    
    3,287,573
    
    
    $
    3,239,193Percent change in market value
    
    
    2.7
    %
    
    
    1.4
    %
    
    
    
    
    
    
    (1.4
    %)
    
    
    (2.9
    %)Resulting unrealized
appreciation / (depreciation)
    
    $
    35,463
    
    
    
    (7,862
    )
    
    
    (53,170
    )
    
    
    (100,242
    )
    
    $
    (148,622
    )
 Foreign Currency Exchange Rate Risk
  Sources of Fair Value
  - 78 -




---



##### Table of Contents



CarryingAmount
    
    Fair ValueFinancial assets:Fixed maturity securities
    
    $
    3,334,645
    
    
    $
    3,334,645Preferred stocks
    
    
    10,772
    
    
    
    10,772Other invested asset
    
    
    4,745
    
    
    
    4,745Short-term investments
    
    
    27,123
    
    
    
    27,123Financial liabilities:Debt obligations
    
    $
    292,840
    
    
    $
    303,589
  
 Item 8. Financial Statements and Supplementary Data
 F-1 through F-47
hereto.
 
 Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
  - 79 -




---



##### Table of Contents



Managements Annual Report on Internal Control Over Financial Reporting
    Changes in Internal Control over Financial Reporting
  New York Stock Exchange Certification
  - 80 -




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      - 81 -




---



##### Table of Contents



- 82 -




---



##### Table of Contents



Item 9B. Other Information
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  Code of Ethics
 www.platinumre.com
 
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
  Equity Based Compensation Information
  - 83 -




---



##### Table of Contents



(a)
    
    
    (b)
    
    
    (c)Number of
    
    
    Weighted-
    
    
    Number of SecuritiesSecurities to be
    
    
    Average
    
    
    Remaining AvailableIssued upon
    
    
    Exercise Price
    
    
    for Future IssuanceExercise of
    
    
    of Outstanding
    
    
    under EquityOutstanding
    
    
    Options,
    
    
    Compensation PlansOptions, Warrants
    
    
    Warrants and
    
    
    (excluding securitiesPlan Category
    
    and Rights
    
    
    Rights
    
    
    reflected in column (a))Equity compensation
plans approved by
security holders
(1)
    
    
    3,786,915
    
    
    $
    24.20
    
    
    
    5,564,492Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,786,915
    
    
    $
    24.20
    
    
    
    5,564,492
 
 (1)
    
    These plans consist of the 2002 Share Incentive Plan, which was approved by our
shareholders at the 2004 Annual General Meeting of Shareholders, the 2006 Share Incentive
Plan, which was approved by our shareholders at the 2006 Annual General Meeting of
Shareholders and replaced the 2002 Share Incentive Plan, and the Share Incentive Plan for
Nonemployee Directors which was approved by our sole shareholder prior to our initial
public offering in 2002. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountant Fees and Services
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Financial Statements
 F-1 through F-47
hereto.
 Schedules Supporting Financial Statements
  - 84 -




---



##### Table of Contents



Exhibits
 ExhibitNumber
    
    Description2.1
    
    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. (27)3(ii).2
    
    Certificate of Designation of 6% Series A Mandatory Convertible Preferred Shares of
Platinum Holdings dated December 1, 2005. (22)4.1
    
    Form of Certificate of the Common Shares of Platinum Holdings. (2)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
    
    Second Supplemental Indenture dated August 16, 2005 between Platinum Holdings, Platinum
Finance and JP Morgan Chase. (18)4.5
    
    Indenture dated May 26, 2005 between Platinum Holdings, Platinum Finance and JP Morgan
Chase. (15)4.6
    
    First Supplemental Indenture dated May 26, 2005 between Platinum Holdings, Platinum
Finance and JP Morgan Chase. (15)4.7
    
    Second Supplemental Indenture dated as of November 2, 2005 among Platinum Finance,
Platinum Holdings and JP Morgan Chase. (20)4.8
    
    Purchase Contract Agreement dated November 1, 2002 between Platinum Holdings and JP Morgan
Chase. (2)4.9
    
    Form of Senior Note of Platinum Finance. (2)4.10
    
    Form of Guarantee of Platinum Holdings. (2)4.11
    
    Exchange and Registration Rights Agreement dated May 26, 2005 among Platinum Holdings,
Platinum Finance and Goldman, Sachs & Co. (15)4.12
    
    Exchange and Registration Rights Agreement dated August 16, 2005 between Platinum
Holdings, Platinum Finance, and Goldman, Sachs & Co. and Merrill Lynch. (18)4.13
    
    Transfer Restrictions, Registration Rights and Standstill Agreement dated November 1, 2002
between Platinum Holdings and Renaissance Re. (2)4.14
    
    Amendment No. 1 dated December 5, 2005 to the Transfer Restrictions, Registration Rights
and Standstill Agreement dated November 1, 2002 between Platinum Holdings and
RenaissanceRe. (22)10.1*
    
    Share Unit Plan for Non-Employee Directors. (24)10.2*
    
    Form of Nonemployee Director Share Unit Award Agreement. (23)
 - 85 -




---



##### Table of Contents



ExhibitNumber
    
    Description10.3*
    
    2002 Share Incentive Plan (2004 Update). (5)10.4*
    
    2002 Share Incentive Plan (UK Sub-Plan) (included in Exhibit 10.3). (5)10.5*
    
    2006 Share Incentive Plan. (30)10.6 *
    
    Amended and Restated Annual Incentive Plan. (26)10.7*
    
    Section 162(m) Performance Incentive Plan. (5)10.8*
    
    Executive Retirement Savings Plan. (5)10.9*
    
    Executive Bonus Deferral Plan. (5)10.10*
    
    Amended and Restated Executive Incentive Plan. (26)10.11*
    
    Form of EIP Share Unit Award Agreement. (23)10.12*
    
    Capital Accumulation Plan. (2)10.13*
    
    Form of Nonqualified Share Option Agreement (Employee). (9)10.14*
    
    Form of Nonqualified Share Option Agreement (New Nonemployee Director). (9)10.15*
    
    Form of Nonqualified Share Option Agreement (Annual Nonemployee Director). (9)10.16*
    
    Form of Time-Based Share Unit Award Agreement. (9)10.17*
    
    Form of Special Share Unit Award Agreement. (9)10.18*
    
    Form of Restricted Share Award Agreement. (9)10.19*
    
    Employment Agreement dated November 1, 2005 between Platinum Holdings and Michael E.
Lombardozzi. (21)10.20*
    
    Amended Letter Agreement dated October 27, 2005 between Platinum Holdings and Steven H.
Newman. (19)10.21*
    
    Amended Consulting Agreement dated October 27, 2005 between Platinum US, Steven H. Newman
and SHN Enterprises, Inc. (19)10.22*
    
    Amendment dated April 27, 2005 to the Letter Agreement between Platinum US and SHN dated
March 1, 2002. (11)10.23*
    
    Employment Agreement dated August 4, 2004 between Michael D. Price and Platinum Holdings.
(6)10.24*
    
    Amendment dated February 21, 2007 to the Employment Agreement dated August 4, 2004 between
Michael D. Price and Platinum Holdings. (26)10.25*
    
    Employment Agreement dated June 24, 2004 between Joseph F. Fisher and Platinum Holdings.
(6)10.26*
    
    Amended and Restated Letter Agreement dated February 26, 2006 between Platinum Holdings
and Gregory E.A. Morrison. (23)
 - 86 -




---



##### Table of Contents



ExhibitNumber
    
    Description10.27*
    
    Employment Agreement dated February 26, 2006 between Platinum Bermuda and Robert S.
Porter. (23)10.28*
    
    Letter Agreement dated July 25, 2006 between H. Elizabeth Mitchell and Platinum US.
(24)10.29
    
    Capital Support Agreement dated November 26, 2002 between Platinum Holdings and Platinum
US. (2)10.30
    
    Option Agreement dated November 1, 2002 between St. Paul and Platinum Holdings.
(2)10.31
    
    Amendment dated January 10, 2005 to the Option Agreement dated November 1, 2002 among St.
Paul Reinsurance Company Limited, Platinum Holdings and St. Paul. (8)10.32
    
    Amendment dated January 10, 2005 to the Option Agreement dated November 1, 2002 between
St. Paul and Platinum Holdings. (8)10.33
    
    Investment Management Agreement dated May 12, 2005 between Platinum US and Hyperion
Capital Management, Inc. (12)10.34
    
    Investment Management Agreement dated May 12, 2005 between Platinum Bermuda and Hyperion
Capital Management, Inc. (12)10.35
    
    Investment Management Agreement dated May 12, 2005 between Platinum Holdings, Platinum
Bermuda, Platinum Regency and BlackRock Financial Management, Inc. (12)10.36
    
    Investment Management Agreement dated May 12, 2005 between Platinum UK and BlackRock
Financial Management, Inc. (12)10.37
    
    Investment Management Agreement dated May 12, 2005 between Platinum US, Platinum Finance
and BlackRock Financial Management, Inc. (12)10.38
    
    Investment Agreement dated September 20, 2002 among Platinum Holdings, St. Paul, and
RenaissanceRe. (2)10.39
    
    First Amendment dated November 1, 2002 to the Investment Agreement dated September 20,
2002 among Platinum Holdings, St. Paul, and RenaissanceRe. (2)10.40
    
    Option Agreement dated November 1, 2002 between Platinum Holdings and RenaissanceRe.
(2)10.41
    
    Amended and Restated Option Agreement dated November 18, 2004 between Platinum Holdings
and RenaissanceRe. (7)10.42
    
    Services and Capacity Reservation Agreement dated November 1, 2002 between Platinum
Holdings and RenaissanceRe. (2)10.43
    
    Quota Share Retrocession Agreement dated November 26, 2002 between Platinum Bermuda and
Platinum UK. (2)10.44
    
    Quota Share Retrocession Agreement dated March 27, 2003 between Platinum Bermuda and
Platinum UK. (5)10.45
    
    Addendum No. 1 effective April 1, 2003 to the Quota Share Retrocession Agreement dated
March 27, 2003, between Platinum Bermuda and Platinum UK. (5)
 - 87 -




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##### Table of Contents



ExhibitNumber
    
    Description10.46
    
    Addendum No. 2 effective March 27, 2003 to the Quota Share Retrocession Agreement dated
March 27, 2003, between Platinum Bermuda and Platinum UK. (5)10.47
    
    Addendum No. 3 effective April 1, 2005 to the Quota Share Reinsurance Agreement dated
March 27, 2003 between Platinum Bermuda and Platinum UK. (10)10.48
    
    Security Agreement dated November 26, 2002 between Platinum Bermuda and Platinum UK.
(2)10.49
    
    Addendum No. 1 effective January 1, 2004 to the Security Agreement dated November 26,
2002, between Platinum Bermuda and Platinum UK. (5)10.50
    
    Control Agreement dated November 26, 2002 among Platinum Bermuda, Platinum UK and State
Street Bank. (2)10.51
    
    Discretionary Investment Advisory Agreement dated November 26, 2002 between Platinum
Bermuda and Platinum UK. (2)10.52
    
    Trust Agreement effective January 1, 2003 among Platinum Bermuda, Platinum US and State
Street Bank. (3)10.53
    
    Quota Share Retrocession Agreement dated May 13, 2003 between Platinum Bermuda and
Platinum US. (3)10.54
    
    Addendum No. 1 dated December 31, 2003 to the Quota Share Retrocession Agreement dated May
13, 2003, between Platinum Bermuda and Platinum US. (4)10.55
    
    Addendum No. 2 effective as of April 1, 2005 to the Quota Share Retrocession Agreement
between Platinum Bermuda and Platinum US. (13)10.56
    
    Quota Share Retrocession Agreement dated May 6, 2004 between Platinum Bermuda and Platinum
US. (6)10.57
    
    Amended and Restated Quota Share Retrocession Agreement dated January 1, 2006 between
Platinum Bermuda and Platinum US. (27)10.58
    
    Excess of Loss Retrocession Agreement by and between Platinum Bermuda and Platinum US
dated as of April 1, 2006. (28)10.59
    
    Quota Share Retrocession Agreement by and between Platinum Underwriters Bermuda, Ltd. and
Platinum Re (UK) Limited dated as of January 1, 2006. (28)10.60
    
    Excess of Loss Retrocession Agreement effective as of April 1, 2005 between Platinum US
and Platinum UK. (13)10.61
    
    Termination Addendum effective December 31, 2006 to Amended and Restated Quota Share
Retrocession Agreement dated April 11, 2006 between Platinum Bermuda and Platinum US.10.62
    
    Casualty and Specialty Quota Share Retrocession Agreement between Platinum Bermuda and
Platinum US dated as of January 1, 2007.
 - 88 -




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##### Table of Contents



ExhibitNumber
    
    Description10.63
    
    Amended and Restated Credit Agreement, dated as of September 13, 2006, by and among the
Company, certain subsidiaries of the Company, Wachovia Bank, National Association,
Citibank, N.A., HSBC Bank USA, National Association, Bayerische Hypo-Und Vereinsbank AG
and Comerica Bank as the Lenders, and Wachovia Bank, National Association, as
Administrative Agent. (25)10.64
    
    List of Contents of exhibits and Schedules to the Amended and Restated Credit Agreement.
(25)10.65
    
    Referral Agreement between Platinum Bermuda and Renaissance Underwriting Managers Ltd.
(3)10.66
    
    Referral Agreement between Platinum US and Renaissance Underwriting Managers Ltd.
(4)10.67
    
    Guaranty dated December 31, 2003 between Platinum Holdings and Platinum US. (4)10.68
    
    Amendment No. 1 dated January 1, 2005 to Guaranty dated December 31, 2003 between Platinum
Holdings and Platinum US. (16)10.69
    
    Guarantee dated December 31, 2003 between Platinum Holdings and Platinum UK. (4)10.70
    
    Purchase Agreement dated May 20, 2005 among Platinum Holdings, Platinum Finance and
Goldman, Sachs & Co. (14)10.71
    
    Remarketing Agreement dated August 8, 2005 among Platinum Holdings, Platinum Finance,
Goldman, Sachs & Co. and Merrill Lynch. (16)10.72
    
    Pledge Agreement dated November 1, 2002 among Platinum Holdings, State Street Bank and
Trust Company and JP Morgan Chase. (2)21.1
    
    Subsidiaries of Platinum Holdings.23.1
    
    Independent Registered Public Accounting Firms Consent.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. - 89 -




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##### Table of Contents



(2)
    
    Incorporated by reference from Platinum Holdings Annual Report on Form 10-K for the year
ended December 31, 2002, filed with the SEC on March 31, 2003.(3)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003, filed with the SEC on August 14, 2003.(4)
    
    Incorporated by reference from Platinum Holdings Annual Report on Form 10-K for the year
ended December 31, 2003, filed with the SEC on March 15, 2004.(5)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004, filed with the SEC on May 10, 2004.(6)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004, filed with the SEC on August 6, 2004.(7)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on November 18, 2004.(8)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on January 11, 2005.(9)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on February 23, 2005.(10)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on April 14, 2005.(11)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on April 28, 2005.(12)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on May 13, 2005.(13)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on May 18, 2005.(14)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on May 24, 2005.(15)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on May 27, 2005.(16)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005, filed with the SEC on August 5, 2005.(17)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on August 9, 2005.(18)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on August 17, 2005.(19)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on October 28, 2005.(20)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on November 3, 2005.(21)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on November 21, 2005. - 90 -




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##### Table of Contents



(22)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on December 6, 2005.(23)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on February 27, 2006.(24)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on July 26, 2006.(25)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on September 18, 2006.(26)
    
    Incorporated by reference from Platinum Holdings Current Report on Form 8-K, filed with
the SEC on February 22, 2007.(27)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, filed with the SEC on April 28, 2006.(28)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006, filed with the SEC on July 31, 2006.(29)
    
    Incorporated by reference from Platinum Holdings Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006, filed with the SEC on October 30, 2006.(30)
    
    Incorporated by reference from the Registration Statement on Form S-8 (Registration No.
333-133521) of Platinum Holdings, filed with the SEC on April 25, 2006. - 91 -




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##### Table of Contents



SIGNATURES
   PLATINUM UNDERWRITERS HOLDINGS, LTD./s/ Michael D. PriceMichael D. PricePresident and Chief Executive Officer  Signature
    
    Title
    
    Date/s/
Michael D.
Price
    
    President, Chief Executive
Officer and Director
    
    February 21, 2007Michael D.
Price
    
    (Principal Executive Officer)/s/ Joseph F. Fisher
    
    Executive Vice President and
Chief Financial Officer
    
    February 21, 2007Joseph F. Fisher
    
    (Principal Financial Officer)/s/ James A. Krantz
    
    Senior Vice President and
Chief Accounting Officer
    
    February 21, 2007James A. Krantz
    
    (Principal Accounting Officer)/s/ Steven H. Newman
    
    Chairman of the Board of Directors
    
    February 21, 2007Steven H. Newman/s/ H. Furlong Baldwin
    
    Director
    
    February 21, 2007H. Furlong Baldwin/s/ Jonathan F. Bank
    
    Director
    
    February 21, 2007Jonathan F. Bank/s/ Dan R. Carmichael
    
    Director
    
    February 21, 2007Dan R. Carmichael/s/ Robert V. Deutsch
    
    Director
    
    February 21, 2007Robert V. Deutsch/s/ Peter T. Pruitt
    
    Director
    
    February 21, 2007Peter T. Pruitt
 - 92 -




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##### Table of Contents



PLATINUM UNDERWRITERS HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
 Table of Contents Page
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    F-3Consolidated Statements of Operations and Comprehensive Income (Loss)
for the years ended December 31, 2006, 2005 and 2004
    
    F-4Consolidated Statements of Shareholders Equity for the years ended
December 31, 2006, 2005 and 2004
    
    F-5Consolidated Statements of Cash Flows for the years ended December
31, 2006, 2005 and 2004
    
    F-6Notes to Consolidated Financial Statements
    
    F-7
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 F-2




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
 2006
    
    
    2005ASSETSInvestments:Fixed maturity available-for-sale securities at fair value
(amortized cost  $3,276,970 and $2,936,152, respectively)
    
    $
    3,226,354
    
    
    $
    2,888,922Fixed maturity trading securities at fair value
(amortized cost  $110,845 and $99,141, respectively)
    
    
    108,291
    
    
    
    98,781Preferred stocks (cost  $11,246 and $8,735, respectively)
    
    
    10,772
    
    
    
    8,186Other invested asset
    
    
    4,745
    
    
    
    5,000Short-term investments
    
    
    27,123
    
    
    
    8,793Total investments
    
    
    3,377,285
    
    
    
    3,009,682Cash and cash equivalents
    
    
    851,652
    
    
    
    820,746Accrued investment income
    
    
    32,682
    
    
    
    29,230Reinsurance premiums receivable
    
    
    377,183
    
    
    
    567,449Reinsurance recoverable on ceded losses and loss adjustment expenses
    
    
    57,956
    
    
    
    68,210Prepaid reinsurance premiums
    
    
    9,680
    
    
    
    7,899Funds held by ceding companies
    
    
    238,499
    
    
    
    291,629Deferred acquisition costs
    
    
    82,610
    
    
    
    130,800Income tax recoverable
    
    
    7,515
    
    
    
    24,522Deferred tax assets
    
    
    38,577
    
    
    
    31,934Due from investment broker
    
    
    5,631
    
    
    
    157,930Other assets
    
    
    14,297
    
    
    
    14,344Total assets
    
    $
    5,093,567
    
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesUnpaid losses and loss adjustment expenses
    
    $
    2,368,482
    
    
    $
    2,323,990Unearned premiums
    
    
    349,792
    
    
    
    502,018Reinsurance deposit liabilities
    
    
    4,009
    
    
    
    6,048Debt obligations
    
    
    292,840
    
    
    
    292,840Ceded premiums payable
    
    
    17,597
    
    
    
    22,544Commissions payable
    
    
    140,835
    
    
    
    186,654Deferred tax liabilities
    
    
    4,234
    
    
    
    118Due to investment broker
    
    
    
    
    
    
    259,834Other liabilities
    
    
    57,717
    
    
    
    20,080Total liabilities
    
    
    3,235,506
    
    
    
    3,614,126Shareholders EquityPreferred shares, $.01 par value, 25,000,000 shares authorized,
5,750,000 shares issued and outstanding
    
    
    57
    
    
    
    57Common shares, $.01 par value, 200,000,000 shares authorized,
59,671,959 and 59,126,675 shares issued and outstanding,
respectively
    
    
    597
    
    
    
    590Additional paid-in capital
    
    
    1,545,979
    
    
    
    1,527,316Unearned share grant compensation
    
    
    
    
    
    
    (2,467
    )Accumulated other comprehensive loss
    
    
    (44,289
    )
    
    
    (40,718
    )Retained earnings
    
    
    355,717
    
    
    
    55,471Total shareholders equity
    
    
    1,858,061
    
    
    
    1,540,249Total liabilities and shareholders equity
    
    $
    5,093,567
    
    
    $
    5,154,375
  F-3




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
  2006
    
    
    2005
    
    
    2004Revenue:Net premiums earned
    
    $
    1,336,701
    
    
    
    1,714,723
    
    
    $
    1,447,935Net investment income
    
    
    187,987
    
    
    
    129,445
    
    
    
    84,532Net realized gains (losses) on investments
    
    
    1,090
    
    
    
    (3,046
    )
    
    
    1,955Other income (expense)
    
    
    (2,872
    )
    
    
    (586
    )
    
    
    3,211Total revenue
    
    
    1,522,906
    
    
    
    1,840,536
    
    
    
    1,537,633Expenses:Net losses and loss adjustment expenses
    
    
    760,602
    
    
    
    1,505,425
    
    
    
    1,019,804Net acquisition expenses
    
    
    285,923
    
    
    
    403,135
    
    
    
    327,821Operating expenses
    
    
    95,490
    
    
    
    69,827
    
    
    
    66,333Net foreign currency exchange losses (gains)
    
    
    (738
    )
    
    
    2,111
    
    
    
    (725
    )Interest expense
    
    
    21,805
    
    
    
    20,006
    
    
    
    9,268Loss on repurchase of debt
    
    
    
    
    
    
    2,486
    
    
    
    Total expenses
    
    
    1,163,082
    
    
    
    2,002,990
    
    
    
    1,422,501Income (loss) before income tax expense (benefit)
    
    
    359,824
    
    
    
    (162,454
    )
    
    
    115,132Income tax expense (benefit)
    
    
    30,167
    
    
    
    (24,967
    )
    
    
    30,349Net income (loss)
    
    
    329,657
    
    
    
    (137,487
    )
    
    
    84,783Preferred dividends
    
    
    10,382
    
    
    
    737
    
    
    
    Net income (loss) attributable to common shareholders
    
    $
    319,275
    
    
    
    (138,224
    )
    
    $
    84,783Earnings (loss) per common share:Basic earnings (loss) per common share
    
    $
    5.38
    
    
    
    (3.01
    )
    
    $
    1.96Diluted earnings (loss) per common share
    
    $
    4.96
    
    
    
    (3.01
    )
    
    $
    1.81Comprehensive income (loss):Net income (loss)
    
    $
    329,657
    
    
    
    (137,487
    )
    
    $
    84,783Other comprehensive income (loss):Net change in unrealized gains and losses on
available-for-sale securities, net of deferred tax
    
    
    (3,887
    )
    
    
    (52,454
    )
    
    
    (6,910
    )Cumulative translation adjustments, net of deferred tax
    
    
    316
    
    
    
    (516
    )
    
    
    388Comprehensive income (loss)
    
    $
    326,086
    
    
    
    (190,457
    )
    
    $
    78,261Shareholder dividends:Preferred dividends declared
    
    
    9,818
    
    
    
    
    
    
    
    Preferred dividends declared per share
    
    
    1.71
    
    
    
    
    
    
    
    Common shareholder dividends declared
    
    $
    19,029
    
    
    
    14,775
    
    
    $
    13,807Dividends declared per common share
    
    $
    0.32
    
    
    
    0.32
    
    
    $
    0.32
  F-4




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
  2006
    
    
    2005
    
    
    2004Preferred shares:Balances at beginning of year
    
    $
    57
    
    
    
    
    
    
    $
    Issuance of preferred shares
    
    
    
    
    
    
    57
    
    
    
    Balances at end of year
    
    
    57
    
    
    
    57
    
    
    
    Common shares:Balances at beginning of year
    
    
    590
    
    
    
    430
    
    
    
    430Exercise of share options
    
    
    6
    
    
    
    7
    
    
    
    2Issuance of restricted shares and shares for share units
    
    
    
    
    
    
    1
    
    
    
    Issuance of common shares
    
    
    1
    
    
    
    152
    
    
    
    1Purchase of common shares
    
    
    
    
    
    
    
    
    
    
    (3
    )Balances at end of year
    
    
    597
    
    
    
    590
    
    
    
    430Additional paid-in-capital:Balances at beginning of year
    
    
    1,527,316
    
    
    
    911,851
    
    
    
    910,505Transfer of unearned common share grant compensation
    
    
    (2,467
    )
    
    
    
    
    
    
    Exercise of share options
    
    
    12,969
    
    
    
    15,020
    
    
    
    7,405Issuance of restricted shares and shares for share units
    
    
    
    
    
    
    3,274
    
    
    
    Share based compensation
    
    
    7,995
    
    
    
    3,516
    
    
    
    2,358Issuance of common shares
    
    
    
    
    
    
    425,604
    
    
    
    1,565Issuance of preferred shares
    
    
    
    
    
    
    167,451
    
    
    
    Purchase of common shares
    
    
    
    
    
    
    
    
    
    
    (9,982
    )Tax benefit of share options
    
    
    166
    
    
    
    600
    
    
    
    Balances at end of year
    
    
    1,545,979
    
    
    
    1,527,316
    
    
    
    911,851Unearned share grant compensation:Balances at beginning of year
    
    
    (2,467
    )
    
    
    
    
    
    
    Transfer of unearned common share grant compensation
    
    
    2,467
    
    
    
    
    
    
    
    Shares issued
    
    
    
    
    
    
    (3,275
    )
    
    
    Amortization
    
    
    
    
    
    
    808
    
    
    
    Balances at end of year
    
    
    
    
    
    
    (2,467
    )
    
    
    Accumulated other comprehensive income (loss):Balances at beginning of year
    
    
    (40,718
    )
    
    
    12,252
    
    
    
    18,774Net change in unrealized gains and losses on
available-for-sale securities, net of deferred tax
    
    
    (3,887
    )
    
    
    (52,454
    )
    
    
    (6,910
    )Net change in cumulative translation adjustments, net
of deferred tax
    
    
    316
    
    
    
    (516
    )
    
    
    388Balances at end of year
    
    
    (44,289
    )
    
    
    (40,718
    )
    
    
    12,252Retained earnings:Balances at beginning of year
    
    
    55,471
    
    
    
    208,470
    
    
    
    137,494Net income (loss)
    
    
    329,657
    
    
    
    (137,487
    )
    
    
    84,783Preferred share dividends
    
    
    (10,382
    )
    
    
    (737
    )
    
    
    Common share dividends
    
    
    (19,029
    )
    
    
    (14,775
    )
    
    
    (13,807
    )Balances at end of year
    
    
    355,717
    
    
    
    55,471
    
    
    
    208,470Total shareholders equity
    
    $
    1,858,061
    
    
    
    1,540,249
    
    
    $
    1,133,003
  F-5




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
 2006
    
    
    2005
    
    
    2004Operating Activities:Net income (loss)
    
    $
    329,657
    
    
    
    (137,487
    )
    
    $
    84,783Adjustments to reconcile net income to cash used in
operations:Depreciation and amortization
    
    
    16,213
    
    
    
    14,993
    
    
    
    20,642Net realized (gains) losses on investments
    
    
    (1,090
    )
    
    
    3,046
    
    
    
    (1,955
    )Loss on repurchase of debt
    
    
    
    
    
    
    2,486
    
    
    
    Net foreign currency exchange (gains) losses
    
    
    (738
    )
    
    
    2,111
    
    
    
    (725
    )Share based compensation
    
    
    7,995
    
    
    
    4,424
    
    
    
    2,358Deferred income tax expense (benefit)
    
    
    (2,613
    )
    
    
    (24,590
    )
    
    
    2,216Trading securities activities
    
    
    1,776
    
    
    
    (21,235
    )
    
    
    16,510Changes in assets and liabilities:Increase in accrued investment income
    
    
    (3,452
    )
    
    
    (5,567
    )
    
    
    (6,171
    )(Increase) decrease in reinsurance premiums receivable
    
    
    195,094
    
    
    
    12,599
    
    
    
    (92,607
    )(Increase) decrease in funds held by ceding companies
    
    
    53,130
    
    
    
    (93,581
    )
    
    
    (132,988
    )(Increase) decrease in deferred acquisition costs
    
    
    48,190
    
    
    
    5,238
    
    
    
    (56,731
    )Increase (decrease) in net unpaid losses and loss
adjustment expenses
    
    
    37,188
    
    
    
    887,563
    
    
    
    641,062Increase (decrease) in net unearned premiums
    
    
    (154,007
    )
    
    
    (5,417
    )
    
    
    199,680Increase (decrease) in reinsurance deposit liabilities
    
    
    (2,039
    )
    
    
    (14,141
    )
    
    
    14,490Increase (decrease) in ceded premiums payable
    
    
    (4,947
    )
    
    
    20,160
    
    
    
    (3,821
    )Increase (decrease) in commissions payable
    
    
    (45,819
    )
    
    
    4,729
    
    
    
    5,615Increase (decrease) in funds withheld
    
    
    
    
    
    
    (11,999
    )
    
    
    11,999(Increase) decrease in income tax recoverable
    
    
    17,174
    
    
    
    (22,595
    )
    
    
    8,035Changes in other assets and liabilities
    
    
    35,496
    
    
    
    (23,598
    )
    
    
    1,944Other net
    
    
    (407
    )
    
    
    535
    
    
    
    397Net cash provided by operating activities
    
    
    526,801
    
    
    
    597,674
    
    
    
    714,733Investing Activities:Proceeds from sale of available-for-sale securities
    
    
    348,142
    
    
    
    891,799
    
    
    
    498,945Proceeds from maturity or paydown of available-for-sale
securities
    
    
    270,939
    
    
    
    97,931
    
    
    
    136,472Acquisition of available-for-sale securities
    
    
    (1,083,282
    )
    
    
    (1,711,505
    )
    
    
    (1,230,895
    )Increase in short-term investments
    
    
    (15,822
    )
    
    
    (8,793
    )
    
    
    Net cash used in investing activities
    
    
    (480,023
    )
    
    
    (730,568
    )
    
    
    (595,478
    )Financing Activities:Dividends paid to preferred shareholders
    
    
    (9,818
    )
    
    
    
    
    
    
    Dividends paid to common shareholders
    
    
    (19,029
    )
    
    
    (14,775
    )
    
    
    (13,807
    )Proceeds from exercise of share options
    
    
    12,975
    
    
    
    15,027
    
    
    
    7,406Net proceeds from issuance of common shares
    
    
    
    
    
    
    425,756
    
    
    
    1,567Net 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
    
    
    (15,872
    )
    
    
    743,743
    
    
    
    (14,819
    )Net increase in cash and cash equivalents
    
    
    30,906
    
    
    
    610,849
    
    
    
    104,436Cash and cash equivalents at beginning of year
    
    
    820,746
    
    
    
    209,897
    
    
    
    105,461Cash and cash equivalents at end of year
    
    $
    851,652
    
    
    
    820,746
    
    
    $
    209,897Supplemental disclosures of cash flow information:Income taxes paid
    
    $
    15,602
    
    
    
    33,569
    
    
    $
    8,549Interest paid
    
    $
    21,479
    
    
    
    17,662
    
    
    $
    7,442
  F-6




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
  1. Basis of Presentation and Summary of Significant Accounting Policies
 Basis of Presentation and Consolidation
   Summary of Significant Accounting Policies
 Investments
    F-7




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
     Cash and Cash Equivalents
  Premium Revenues
    F-8




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   Funds Held by Ceding Companies
  Deferred Acquisition Costs
  Debt Obligations and Deferred Debt Issuance Costs
  Unpaid Losses and LAE
   F-9




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Reinsurance Ceded
   Reinsurance Deposit Liabilities
  Earnings Per Common Share
   Income Taxes
   F-10




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
     Share-Based Compensation
    F-11




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  AsReported
    
    Pro FormaYear Ended December 31, 2005:Share-based compensation expense
    
    $
    3,799
    
    
    $
    8,149Net loss
    
    
    (138,224
    )
    
    
    (142,574
    )Basic loss per share
    
    
    (3.01
    )
    
    
    (3.11
    )Diluted loss per share
    
    
    (3.01
    )
    
    
    (3.11
    )Year Ended December 31, 2004:Share-based compensation expense
    
    
    2,358
    
    
    
    7,026Net income
    
    
    84,783
    
    
    
    80,115Basic earnings per share
    
    
    1.96
    
    
    
    1.86Diluted earnings per share
    
    $
    1.81
    
    
    $
    1.72
  Foreign Currency Exchange Gains and Losses
  Use of Estimates
  Recently Issued Accounting Standards
  F-12




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
    2. Investments
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2006:U.S. Government
    
    $
    155,766
    
    
    
    64
    
    
    
    2,036
    
    
    $
    153,794Corporate bonds
    
    
    1,529,400
    
    
    
    609
    
    
    
    24,853
    
    
    
    1,505,156Mortgage-backed and asset-backed securities
    
    
    1,349,586
    
    
    
    1,098
    
    
    
    21,717
    
    
    
    1,328,967Municipal bonds
    
    
    200,445
    
    
    
    4
    
    
    
    2,851
    
    
    
    197,598Foreign governments and states
    
    
    41,773
    
    
    
    
    
    
    
    934
    
    
    
    40,839Total available-for-sale fixed
maturity securities
    
    
    3,276,970
    
    
    
    1,775
    
    
    
    52,391
    
    
    
    3,226,354Preferred stocks
    
    
    11,246
    
    
    
    
    
    
    
    474
    
    
    
    10,772Total available-for-sale securities
    
    $
    3,288,216
    
    
    
    1,775
    
    
    
    52,865
    
    
    $
    3,237,126
 F-13




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2005:U.S. Government
    
    $
    140,218
    
    
    
    11
    
    
    
    644
    
    
    $
    139,585Corporate bonds
    
    
    1,379,702
    
    
    
    991
    
    
    
    26,389
    
    
    
    1,354,304Mortgage-backed and asset-backed securities
    
    
    1,159,250
    
    
    
    598
    
    
    
    17,917
    
    
    
    1,141,931Municipal bonds
    
    
    215,237
    
    
    
    125
    
    
    
    3,001
    
    
    
    212,361Foreign governments and states
    
    
    41,745
    
    
    
    
    
    
    
    1,004
    
    
    
    40,741Total available-for-sale fixed
maturity securities
    
    
    2,936,152
    
    
    
    1,725
    
    
    
    48,955
    
    
    
    2,888,922Preferred stocks
    
    
    8,735
    
    
    
    
    
    
    
    549
    
    
    
    8,186Total available-for-sale securities
    
    $
    2,944,887
    
    
    
    1,725
    
    
    
    49,504
    
    
    $
    2,897,108
  AmortizedCost
    
    
    Fair ValueDue in one year or less
    
    $
    400,723
    
    
    $
    397,408Due from one to five years
    
    
    1,065,670
    
    
    
    1,051,975Due from five to ten years
    
    
    258,003
    
    
    
    249,685Due in ten or more years
    
    
    202,988
    
    
    
    198,319Mortgage and asset backed securities
    
    
    1,349,586
    
    
    
    1,328,967Total
    
    $
    3,276,970
    
    
    $
    3,226,354
  2006
    
    
    2005
    
    
    2004Fixed maturity securities
    
    $
    148,708
    
    
    
    114,234
    
    
    $
    82,038Cash and cash equivalents
    
    
    35,684
    
    
    
    11,063
    
    
    
    2,261Funds held
    
    
    7,998
    
    
    
    8,172
    
    
    
    2,651192,390
    
    
    
    133,469
    
    
    
    86,950Less investment expenses
    
    
    4,403
    
    
    
    4,024
    
    
    
    2,418Net investment income
    
    $
    187,987
    
    
    
    129,445
    
    
    $
    84,532
  F-14




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  2006
    
    
    2005
    
    
    2004Available-for-sale
securities and other invested asset:Gross realized gains
    
    $
    1,591
    
    
    
    4,333
    
    
    $
    5,554Gross realized losses
    
    
    316
    
    
    
    7,503
    
    
    
    3,144Subtotal
    
    
    1,275
    
    
    
    (3,170
    )
    
    
    2,410Trading securities:Gross realized gains
    
    
    1
    
    
    
    272
    
    
    
    151Gross realized losses
    
    
    186
    
    
    
    148
    
    
    
    606Subtotal
    
    
    (185
    )
    
    
    124
    
    
    
    (455
    )Net realized gains (losses)
    
    $
    1,090
    
    
    
    (3,046
    )
    
    $
    1,955
   2006
    
    
    2005
    
    
    2004Available for sale securities
    
    $
    (3,311
    )
    
    
    (61,018
    )
    
    $
    (9,459
    )Less deferred tax
    
    
    (576
    )
    
    
    8,564
    
    
    
    2,549Net change in unrealized gains
and losses
    
    $
    (3,887
    )
    
    
    (52,454
    )
    
    $
    (6,910
    )
    F-15




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  UnrealizedFair Value
    
    
    LossLess than twelve months:U.S. Government
    
    $
    46,214
    
    
    $
    741Corporate bonds
    
    
    399,866
    
    
    
    1,854Mortgage-backed and asset-backed securities
    
    
    302,707
    
    
    
    1,630Municipal bonds
    
    
    15,871
    
    
    
    73Foreign governments and states
    
    
    5,976
    
    
    
    96Preferred stocks
    
    
    2,406
    
    
    
    105Total
    
    $
    773,040
    
    
    $
    4,499Twelve months or more:U.S. Government
    
    $
    85,450
    
    
    $
    1,295Corporate bonds
    
    
    1,028,912
    
    
    
    22,999Mortgage-backed and asset-backed securities
    
    
    767,217
    
    
    
    20,087Municipal bonds
    
    
    174,468
    
    
    
    2,778Foreign governments and states
    
    
    34,863
    
    
    
    838Preferred stocks
    
    
    8,365
    
    
    
    369Total
    
    $
    2,099,275
    
    
    $
    48,366Total unrealized losses:U.S. Government
    
    $
    131,664
    
    
    $
    2,036Corporate bonds
    
    
    1,428,778
    
    
    
    24,853Mortgage-backed and asset-backed securities
    
    
    1,069,924
    
    
    
    21,717Municipal bonds
    
    
    190,339
    
    
    
    2,851Foreign governments and states
    
    
    40,839
    
    
    
    934Preferred stocks
    
    
    10,771
    
    
    
    474Total
    
    $
    2,872,315
    
    
    $
    52,865
   F-16




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
      December 31, 2006
    
    December 31, 2005Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    ValueFinancial assets:Fixed maturity securities
    
    $
    3,334,645
    
    
    
    3,334,645
    
    
    
    2,987,703
    
    
    $
    2,987,703Preferred stocks
    
    
    10,772
    
    
    
    10,772
    
    
    
    8,186
    
    
    
    8,186Short-term investments
    
    
    27,123
    
    
    
    27,123
    
    
    
    8,793
    
    
    
    8,793Other invested asset
    
    
    4,745
    
    
    
    4,745
    
    
    
    5,000
    
    
    
    5,000Financial liabilities:Debt obligations
    
    $
    292,840
    
    
    
    303,589
    
    
    
    292,840
    
    
    $
    296,708
  3. Unpaid Losses and LAE
  F-17




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   2005
    
    
    2004Gross losses and LAE
    
    $
    654,090
    
    
    $
    230,475Retrocessional reinsurance
    
    
    (73,800
    )
    
    
    Net losses and LAE
    
    
    580,290
    
    
    
    230,475Additional 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
   2006
    
    
    2005
    
    
    2004Net unpaid losses and LAE as of the beginning
of year
    
    $
    2,268,655
    
    
    
    1,379,227
    
    
    $
    731,918Net incurred related to:Current year
    
    
    811,250
    
    
    
    1,577,944
    
    
    
    1,101,820Prior years
    
    
    (50,648
    )
    
    
    (72,519
    )
    
    
    (82,016
    )Total incurred net losses and LAE
    
    
    760,602
    
    
    
    1,505,425
    
    
    
    1,019,804Net paid losses and LAE:Current year
    
    
    96,112
    
    
    
    210,306
    
    
    
    174,870Prior year
    
    
    624,477
    
    
    
    390,598
    
    
    
    205,889Total net paid losses and LAE
    
    
    720,589
    
    
    
    600,904
    
    
    
    380,759Effects of foreign currency exchange rate
changes
    
    
    17,559
    
    
    
    (15,093
    )
    
    
    8,264Net unpaid losses and LAE as of the end of year
    
    
    2,326,227
    
    
    
    2,268,655
    
    
    
    1,379,227Reinsurance recoverable
    
    
    42,255
    
    
    
    55,335
    
    
    
    1,728Gross unpaid losses and LAE at end of year
    
    $
    2,368,482
    
    
    
    2,323,990
    
    
    $
    1,380,955
  F-18




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
      4. Retrocessional Reinsurance
  F-19




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
     Assumed
    
    Ceded
    
    NetAs of and for the year ended December 31, 2006:Premiums written
    
    $
    1,275,200
    
    
    
    98,587
    
    
    $
    1,176,613Premiums earned
    
    
    1,434,282
    
    
    
    97,581
    
    
    
    1,336,701Losses and LAE
    
    
    778,836
    
    
    
    18,234
    
    
    
    760,602Unpaid losses and LAE
    
    
    2,368,482
    
    
    
    42,255
    
    
    
    2,326,227As of and for the year ended December 31, 2005:Premiums written
    
    
    1,765,155
    
    
    
    47,433
    
    
    
    1,717,722Premiums earned
    
    
    1,757,139
    
    
    
    42,416
    
    
    
    1,714,723Losses and LAE
    
    
    1,594,737
    
    
    
    89,312
    
    
    
    1,505,425Unpaid losses and LAE
    
    
    2,323,990
    
    
    
    55,335
    
    
    
    2,268,655As of and for the year ended December 31, 2004:Premiums written
    
    
    1,659,790
    
    
    
    13,777
    
    
    
    1,646,013Premiums earned
    
    
    1,465,058
    
    
    
    17,123
    
    
    
    1,447,935Losses and LAE
    
    
    1,018,106
    
    
    
    (1,698
    )
    
    
    1,019,804Unpaid losses and LAE
    
    $
    1,380,955
    
    
    
    1,728
    
    
    $
    1,379,227
  F-20




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
    2006
    
    2005
    
    2004Retroceded by Platinum US to Platinum
Bermuda:Premiums earned
    
    $
    666,331
    
    
    
    697,992
    
    
    $
    515,869Incurred losses and LAE
    
    
    457,447
    
    
    
    893,237
    
    
    
    562,193Retroceded by Platinum UK to Platinum
Bermuda:Premiums earned
    
    
    79,173
    
    
    
    86,163
    
    
    
    89,394Incurred losses and LAE
    
    
    28,113
    
    
    
    54,657
    
    
    
    57,830Retroceded by Platinum Bermuda to
Platinum UK:Premiums earned
    
    
    4,583
    
    
    
    8,250
    
    
    
    Incurred losses and LAE
    
    
    19,678
    
    
    
    55,000
    
    
    
    Retroceded by Platinum UK to Platinum US:Premiums earned
    
    
    250
    
    
    
    1,800
    
    
    
    Incurred losses and LAE
    
    
    
    
    
    
    
    
    
    
    Retroceded by Platinum Bermuda to
Platinum USPremiums earned
    
    
    977
    
    
    
    
    
    
    
    Incurred losses and LAE
    
    $
    
    
    
    
    
    
    
    $
    
  5. Debt, Equity Security Units and Credit Facility
 Debt
  F-21




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   Equity Security Units
    2006
    
    
    2005Series B Notes, 7.5%, due June 1, 2017
    
    $
    250,000
    
    
    $
    250,000Series B Remarketed Notes, 6.371%, due November 16, 2007
    
    
    42,840
    
    
    
    42,840Total debt obligations
    
    $
    292,840
    
    
    $
    292,840
 F-22




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Credit Facility
   6. Income Taxes
    F-23




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
    2006
    
    
    2005
    
    
    2004United States
    
    $
    75,374
    
    
    
    (66,181
    )
    
    $
    73,020Bermuda
    
    
    263,327
    
    
    
    (73,165
    )
    
    
    19,423Other
    
    
    21,123
    
    
    
    (23,108
    )
    
    
    22,689Income before income tax expense
(benefit)
    
    $
    359,824
    
    
    
    (162,454
    )
    
    $
    115,132
  2006
    
    
    2005
    
    
    2004Current tax expense (benefit)
    
    $
    32,780
    
    
    
    (377
    )
    
    $
    28,133Deferred tax expense (benefit)
    
    
    (2,613
    )
    
    
    (24,590
    )
    
    
    2,216Total
    
    $
    30,167
    
    
    
    (24,967
    )
    
    $
    30,349
  2006
    
    
    2005
    
    
    2004Expected income tax expense (benefit) at 35%
    
    $
    125,938
    
    
    
    (56,859
    )
    
    $
    40,296Effect of income or loss subject to tax at
rates other than 35%
    
    
    (93,347
    )
    
    
    26,474
    
    
    
    (8,222
    )Tax exempt investment income
    
    
    (2,062
    )
    
    
    (2,932
    )
    
    
    (1,084
    )U.S. withholding taxes deemed taxable
transfer to foreign affiliate
    
    
    (450
    )
    
    
    6,500
    
    
    
    Other, net
    
    
    88
    
    
    
    1,850
    
    
    
    (641
    )Income tax expense (benefit)
    
    $
    30,167
    
    
    
    (24,967
    )
    
    $
    30,349
  F-24




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  2006
    
    
    2005Deferred tax assets:Unpaid losses and LAE
    
    $
    34,433
    
    
    $
    45,516Timing differences in recognition of expenses
    
    
    1,448
    
    
    
    Unearned premiums
    
    
    7,499
    
    
    
    12,555Net unrealized losses on investments
    
    
    5,985
    
    
    
    6,565Other deferred tax assets
    
    
    6,586
    
    
    
    41Total deferred tax assets
    
    $
    55,951
    
    
    $
    64,677Deferred tax liabilities:Deferred acquisition costs
    
    
    11,051
    
    
    
    31,716Timing differences in recognition of expenses
    
    
    
    
    
    
    261Unrealized net foreign currency exchange losses
    
    
    10,557
    
    
    
    884Total deferred tax liabilities
    
    
    21,608
    
    
    
    32,861Total net deferred tax assets (liabilities)
    
    $
    34,343
    
    
    $
    31,816
  2006
    
    
    2005Platinum US deferred tax assets
    
    $
    49,627
    
    
    $
    64,871Platinum US deferred tax liabilities
    
    
    11,051
    
    
    
    32,937Net Platinum US deferred tax assets
    
    
    38,576
    
    
    
    31,934Platinum UK deferred tax assets
    
    
    6,585
    
    
    
    1,073Platinum UK deferred tax liabilities
    
    
    10,818
    
    
    
    1,191Net Platinum UK deferred tax liabilities
    
    
    4,233
    
    
    
    118Total net deferred tax assets (liabilities)
    
    $
    34,343
    
    
    $
    31,816
   7. Shareholders Equity and Regulation
  F-25




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
       F-26




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
    Accumulated Other Comprehensive Income (Loss)
  2006
    
    
    2005
    
    
    2004Before tax amounts:Foreign currency translation adjustment
    
    $
    452
    
    
    
    (737
    )
    
    $
    555Net change in unrealized holding gains and losses
arising during the period
    
    
    (1,786
    )
    
    
    (62,441
    )
    
    
    (6,866
    )Less: reclassification adjustment for net gains
(losses) realized in net income
    
    
    1,522
    
    
    
    (1,423
    )
    
    
    2,594Other comprehensive income (loss) before tax
    
    
    (2,856
    )
    
    
    (61,755
    )
    
    
    (8,905
    )
 F-27




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  2006
    
    
    2005
    
    
    2004Deferred income tax (expense) benefit on:Foreign currency translation adjustment
    
    
    (136
    )
    
    
    221
    
    
    
    (167
    )Net change in unrealized holding gains and losses
arising during the period
    
    
    (654
    )
    
    
    8,536
    
    
    
    2,337Less: reclassification adjustment for net gains
(losses) realized in net income
    
    
    (75
    )
    
    
    (28
    )
    
    
    (213
    )Deferred tax on other comprehensive income
(loss)
    
    
    (715
    )
    
    
    8,785
    
    
    
    2,383Net of tax amounts:Net foreign currency translation adjustment
    
    
    316
    
    
    
    (516
    )
    
    
    388Net change in unrealized holding gains and losses
arising during the period
    
    
    (2,440
    )
    
    
    (53,905
    )
    
    
    (4,529
    )Less: reclassification adjustment for net (gains)
losses realized in net income
    
    
    1,447
    
    
    
    (1,451
    )
    
    
    2,381Other comprehensive income (loss), net of tax
    
    $
    (3,571
    )
    
    
    (52,970
    )
    
    $
    (6,522
    )
 Statutory Basis Equity, Income and Regulation
   2006
    
    
    2005
    
    
    2004Statutory capital and surplusBermuda
    
    $
    1,178,261
    
    
    
    930,072
    
    
    $
    535,054United States
    
    
    530,822
    
    
    
    447,207
    
    
    
    403,121United Kingdom
    
    
    174,474
    
    
    
    156,927
    
    
    
    186,270Total statutory capital and surplus
    
    
    1,883,557
    
    
    
    1,534,206
    
    
    
    1,124,445Statutory net income (loss)Bermuda
    
    
    281,247
    
    
    
    (68,459
    )
    
    
    29,356United States
    
    
    117,980
    
    
    
    (21,884
    )
    
    
    20,575United Kingdom
    
    
    (7,927
    )
    
    
    (4,685
    )
    
    
    1,872Total statutory net income (loss)
    
    $
    391,300
    
    
    
    (95,028
    )
    
    $
    51,803
  F-28




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   8. Earnings (Loss) Per Common Share
  EarningsWeighted
    
    
    (Loss)Net
    
    
    Average
    
    
    PerIncome
    
    
    Shares
    
    
    Common(Loss)
    
    
    Outstanding
    
    
    ShareYear Ended December 31, 2006:Basic earnings per common share:Net income attributable to common
shareholders
    
    $
    319,275
    
    
    
    59,371
    
    
    $
    5.38Effect of dilutive securities:Common share options, restricted
common shares and restricted share
units
    
    
    
    
    
    
    1,377Conversion of preferred shares
    
    
    
    
    
    
    5,750Preferred shares dividends
    
    
    10,382
    
    
    
    Adjusted net income for diluted earnings per
common share
    
    $
    329,657
    
    
    
    66,498
    
    
    $
    4.96Year Ended December 31, 2005:Basic and diluted loss per common share:Loss attributable to common shareholders
    
    $
    (138,224
    )
    
    
    45,915
    
    
    $
    (3.01
    )
 F-29




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  EarningsWeighted
    
    
    (Loss)Net
    
    
    Average
    
    
    PerIncome
    
    
    Shares
    
    
    Common(Loss)
    
    
    Outstanding
    
    
    ShareYear Ended December 31, 2004:Basic earnings per common share:Net income
    
    $
    84,783
    
    
    
    43,158
    
    
    $
    1.96Effect of dilutive securities:Common share options, restricted common
shares and restricted share units
    
    
    
    
    
    
    2,094Interest expense related to ESUs
    
    
    6,097
    
    
    
    Common share conversion of ESUs
    
    
    
    
    
    
    5,009Adjusted net income for diluted earnings per
common share
    
    $
    90,880
    
    
    
    50,261
    
    
    $
    1.81
 9. Share Incentive Compensation and Employee Benefit Plans
 Share Incentive Compensation
   F-30




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  As of and for the years endedDecember 31, 2006
    
    December 31, 2005
    
    December 31, 2004Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseOptions
    
    Price
    
    Options
    
    Price
    
    Options
    
    PriceOutstanding  beginning of the year
    
    
    3,918
    
    
    $
    23.93
    
    
    
    4,428
    
    
    $
    23.40
    
    
    
    4,614
    
    
    $
    22.92Granted
    
    
    249
    
    
    
    30.47
    
    
    
    333
    
    
    
    29.78
    
    
    
    227
    
    
    
    31.43Exercised
    
    
    530
    
    
    
    24.49
    
    
    
    663
    
    
    
    22.65
    
    
    
    329
    
    
    
    22.50Forfeited
    
    
    171
    
    
    
    26.24
    
    
    
    180
    
    
    
    25.20
    
    
    
    84
    
    
    
    22.50Outstanding  end of the year
    
    
    3,466
    
    
    $
    24.20
    
    
    
    3,918
    
    
    $
    23.93
    
    
    
    4,428
    
    
    $
    23.40Options exercisable at year-end
    
    
    2,930
    
    
    
    
    
    
    
    2,896
    
    
    
    
    
    
    
    3,636Weighted average exercise price of
options exercisable at year-end
    
    
    
    
    
    $
    23.11
    
    
    
    
    
    
    $
    23.04
    
    
    
    
    
    
    $
    22.99
  2006
    
    2005
    
    2004Dividend yield
    
    
    1.0
    %
    
    
    1.0
    %
    
    
    1.4
    %Risk free interest rate
    
    
    4.6
    %
    
    
    3.0
    %
    
    
    3.0
    %Expected volatility
    
    
    22.0
    %
    
    
    30.0
    %
    
    
    30.0
    %Expected option life
    
    5.4 years
    
    7 years
    
    7 yearsWeighted average grant fair value
    
    $
    8.08
    
    
    $
    9.92
    
    
    $
    9.76
   F-31




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   As of and for the years endedDecember 31, 2006
    
    December 31, 2005Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageShare
    
    Grant Date
    
    Share
    
    Grant DateUnits
    
    Fair Value
    
    Units
    
    Fair ValueOutstanding  beginning of
the year
    
    
    112
    
    
    $
    30.93
    
    
    
    
    
    
    
    Granted
    
    
    82
    
    
    
    30.31
    
    
    
    122
    
    
    $
    30.91Converted
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    30.75Forfeited
    
    
    13
    
    
    
    30.73
    
    
    
    7
    
    
    
    30.75Outstanding  end of the year
    
    
    181
    
    
    $
    30.66
    
    
    
    112
    
    
    $
    30.93
     Share-based compensation expense
    
    $
    7,995Tax benefit
    
    
    (995
    )Share-based compensation expense, net of tax
    
    $
    7,000
 F-32




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Defined Contribution Plan
  10. Related Party Transactions and Agreements
     F-33




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
   11. Operating Segment Information
   F-34




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalYear ended December 31, 2006:Net premiums written
    
    $
    424,929
    
    
    
    757,675
    
    
    
    (5,991
    )
    
    $
    1,176,613Net premiums earned
    
    
    448,959
    
    
    
    764,341
    
    
    
    123,401
    
    
    
    1,336,701Net losses and LAE
    
    
    145,900
    
    
    
    522,815
    
    
    
    91,887
    
    
    
    760,602Net acquisition expenses
    
    
    70,905
    
    
    
    188,717
    
    
    
    26,301
    
    
    
    285,923Other underwriting expenses
    
    
    39,887
    
    
    
    27,022
    
    
    
    4,387
    
    
    
    71,296Segment underwriting income
    
    $
    192,267
    
    
    
    25,787
    
    
    
    826
    
    
    
    218,880Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187,987Net realized gains on
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,090Net foreign currency exchange
gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    738Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,872
    )Corporate expenses not
allocated
to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,194
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,805
    )Income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    359,824Ratios:Net loss and LAE
    
    
    32.5
    %
    
    
    68.4
    %
    
    
    74.5
    %
    
    
    56.9
    %Net acquisition expense
    
    
    15.8
    %
    
    
    24.7
    %
    
    
    21.3
    %
    
    
    21.4
    %Other underwriting expense
    
    
    8.9
    %
    
    
    3.5
    %
    
    
    3.6
    %
    
    
    5.3
    %Combined
    
    
    57.2
    %
    
    
    96.6
    %
    
    
    99.4
    %
    
    
    83.6
    %Year ended December 31, 2005:Net premiums written
    
    $
    575,055
    
    
    
    809,031
    
    
    
    333,636
    
    
    $
    1,717,722Net premiums earned
    
    
    569,173
    
    
    
    789,629
    
    
    
    355,921
    
    
    
    1,714,723Net losses and LAE
    
    
    756,742
    
    
    
    511,609
    
    
    
    237,074
    
    
    
    1,505,425Net acquisition expenses
    
    
    93,983
    
    
    
    194,397
    
    
    
    114,755
    
    
    
    403,135Other underwriting expenses
    
    
    26,074
    
    
    
    24,690
    
    
    
    4,905
    
    
    
    55,669Segment underwriting
income (loss)
    
    $
    (307,626
    )
    
    
    58,933
    
    
    
    (813
    )
    
    
    (249,506
    )Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129,445Net realized losses on
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,046
    )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
    )
 F-35




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalRatios:Net loss and LAE
    
    
    133.0
    %
    
    
    64.8
    %
    
    
    66.6
    %
    
    
    87.8
    %Net 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, 2004Net premiums written
    
    $
    504,439
    
    
    
    677,399
    
    
    
    464,175
    
    
    $
    1,646,013Net premiums earned
    
    
    485,135
    
    
    
    611,893
    
    
    
    350,907
    
    
    
    1,447,935Net losses and LAE
    
    
    349,557
    
    
    
    418,355
    
    
    
    251,892
    
    
    
    1,019,804Net acquisition expenses
    
    
    76,360
    
    
    
    151,649
    
    
    
    99,812
    
    
    
    327,821Other underwriting expenses
    
    
    27,827
    
    
    
    19,086
    
    
    
    6,224
    
    
    
    53,137Segment underwriting income
    
    $
    31,391
    
    
    
    22,803
    
    
    
    (7,021
    )
    
    
    47,173Net investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,532Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,955Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,211Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,196
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,268
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    115,132Ratios:Net loss and LAE
    
    
    72.1
    %
    
    
    68.4
    %
    
    
    71.8
    %
    
    
    70.4
    %Net 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
    %
   2006
    
    
    2005
    
    
    2004United States
    
    $
    949,522
    
    
    
    1,449,216
    
    
    $
    1,350,408International
    
    
    227,091
    
    
    
    268,506
    
    
    
    295,605Total
    
    $
    1,176,613
    
    
    
    1,717,722
    
    
    $
    1,646,013
 F-36




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  12. Commitments and Contingencies
 Litigation
  Lease Commitments
  Years Ending December 31,2007
    
    $
    2,7072008
    
    
    2,6132009
    
    
    2,5792010
    
    
    2,0022011
    
    
    1,945Thereafter
    
    
    2,902Total
    
    $
    14,748
  Contingencies
  13. Quarterly Financial Data (Unaudited)
  F-37




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Three months endedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2006
    
    2006
    
    2006
    
    2006Net premiums earned
    
    $
    344,301
    
    
    
    337,065
    
    
    
    339,609
    
    
    $
    315,726Net investment income
    
    
    43,515
    
    
    
    45,348
    
    
    
    48,302
    
    
    
    50,822Net losses and LAE
    
    
    206,774
    
    
    
    187,464
    
    
    
    191,428
    
    
    
    174,936Net acquisition expenses
    
    
    69,239
    
    
    
    76,052
    
    
    
    74,994
    
    
    
    65,638Operating expenses
    
    
    22,988
    
    
    
    23,392
    
    
    
    25,348
    
    
    
    23,762Net income attributable
to common shareholders
    
    
    74,460
    
    
    
    79,146
    
    
    
    82,321
    
    
    
    83,348Earnings per common share:Basic
    
    
    1.26
    
    
    
    1.34
    
    
    
    1.38
    
    
    
    1.40Diluted
    
    $
    1.16
    
    
    
    1.24
    
    
    
    1.28
    
    
    $
    1.28Average common shares
outstanding:Basic
    
    
    59,097
    
    
    
    59,224
    
    
    
    59,537
    
    
    
    59,621Diluted
    
    
    66,597
    
    
    
    65,725
    
    
    
    66,520
    
    
    
    67,091
 Three months endedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2005
    
    2005
    
    2005
    
    2005Net premiums earned
    
    $
    411,040
    
    
    
    431,470
    
    
    
    429,388
    
    
    $
    442,825Net investment income
    
    
    26,905
    
    
    
    28,904
    
    
    
    36,441
    
    
    
    37,195Net losses and LAE
    
    
    237,698
    
    
    
    240,852
    
    
    
    564,618
    
    
    
    462,257Net acquisition expenses
    
    
    93,249
    
    
    
    103,928
    
    
    
    98,858
    
    
    
    107,100Operating expenses
    
    
    20,008
    
    
    
    23,480
    
    
    
    8,080
    
    
    
    18,259Net income (loss) attributable
to common shareholders
    
    
    73,088
    
    
    
    67,985
    
    
    
    (176,024
    )
    
    
    (103,273
    )Earnings (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
    
    
    
    53,339Diluted
    
    
    50,032
    
    
    
    50,009
    
    
    
    43,785
    
    
    
    53,339
 14. Condensed Consolidating Financial Information
  F-38




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
     F-39




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Condensed Consolidating Balance Sheet
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingDecember 31, 2006
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    11,342
    
    
    
    3,365,943
    
    
    
    
    
    
    $
    3,377,285Investment in subsidiaries
    
    
    1,749,762
    
    
    
    475,194
    
    
    
    402,098
    
    
    
    (2,627,054
    )
    
    
    Cash and cash equivalents
    
    
    106,039
    
    
    
    39,294
    
    
    
    706,319
    
    
    
    
    
    
    
    851,652Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    765,928
    
    
    
    
    
    
    
    765,928Income tax recoverable
    
    
    
    
    
    
    (1,418
    )
    
    
    8,933
    
    
    
    
    
    
    
    7,515Other assets
    
    
    9,296
    
    
    
    3,792
    
    
    
    78,099
    
    
    
    
    
    
    
    91,187Total assets
    
    $
    1,865,097
    
    
    
    528,204
    
    
    
    5,327,320
    
    
    
    (2,627,054
    )
    
    $
    5,093,567LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesReinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    2,880,715
    
    
    
    
    
    
    $
    2,880,715Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    7,036
    
    
    
    2,024
    
    
    
    52,891
    
    
    
    
    
    
    
    61,951Total liabilities
    
    
    7,036
    
    
    
    294,864
    
    
    
    2,933,606
    
    
    
    
    
    
    
    3,235,506Shareholders EquityPreferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    597
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    597Additional paid-in capital
    
    
    1,545,979
    
    
    
    192,203
    
    
    
    2,051,468
    
    
    
    (2,243,671
    )
    
    
    1,545,979Accumulated other comprehensive loss
    
    
    (44,289
    )
    
    
    (9,071
    )
    
    
    (55,012
    )
    
    
    64,083
    
    
    
    (44,289
    )Retained earnings
    
    
    355,717
    
    
    
    50,208
    
    
    
    391,008
    
    
    
    (441,216
    )
    
    
    355,717Total shareholders equity
    
    
    1,858,061
    
    
    
    233,340
    
    
    
    2,393,714
    
    
    
    (2,627,054
    )
    
    
    1,858,061Total liabilities and shareholders equity
    
    $
    1,865,097
    
    
    
    528,204
    
    
    
    5,327,320
    
    
    
    (2,627,054
    )
    
    $
    5,093,567
 F-40




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Condensed Consolidating Balance Sheet
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingDecember 31, 2005
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    12,448
    
    
    
    2,997,234
    
    
    
    
    
    
    $
    3,009,682Investment in subsidiaries
    
    
    1,410,794
    
    
    
    448,839
    
    
    
    436,368
    
    
    
    (2,296,001
    )
    
    
    Cash and cash equivalents
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    1,065,987
    
    
    
    
    
    
    
    1,065,987Income tax recoverable
    
    
    
    
    
    
    5,874
    
    
    
    18,648
    
    
    
    
    
    
    
    24,522Other assets
    
    
    2,963
    
    
    
    4,086
    
    
    
    226,389
    
    
    
    
    
    
    
    233,438Total assets
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    5,430,400
    
    
    
    (2,296,001
    )
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesReinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    3,041,254
    
    
    
    
    
    
    $
    3,041,254Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    3,470
    
    
    
    2,243
    
    
    
    274,319
    
    
    
    
    
    
    
    280,032Total liabilities
    
    
    3,470
    
    
    
    295,083
    
    
    
    3,315,573
    
    
    
    
    
    
    
    3,614,126Shareholders EquityPreferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    590
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    590Unearned share grant compensation
    
    
    (2,467
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,467
    )Additional paid-in capital
    
    
    1,527,316
    
    
    
    192,036
    
    
    
    2,050,834
    
    
    
    (2,242,870
    )
    
    
    1,527,316Accumulated other comprehensive loss
    
    
    (40,718
    )
    
    
    (10,199
    )
    
    
    (52,840
    )
    
    
    63,039
    
    
    
    (40,718
    )Retained earnings
    
    
    55,471
    
    
    
    (663
    )
    
    
    110,583
    
    
    
    (109,920
    )
    
    
    55,471Total shareholders equity
    
    
    1,540,249
    
    
    
    181,174
    
    
    
    2,114,827
    
    
    
    (2,296,001
    )
    
    
    1,540,249Total liabilities and shareholders equity
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    5,430,400
    
    
    
    (2,296,001
    )
    
    $
    5,154,375
 F-41




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Consolidating Statement of Operations
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2006
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    1,336,701
    
    
    
    
    
    
    $
    1,336,701Net investment income
    
    
    5,912
    
    
    
    1,033
    
    
    
    181,042
    
    
    
    
    
    
    
    187,987Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    1,090
    
    
    
    
    
    
    
    1,090Other income (expense)
    
    
    3,577
    
    
    
    
    
    
    
    (6,449
    )
    
    
    
    
    
    
    (2,872
    )Total revenue
    
    
    9,489
    
    
    
    1,033
    
    
    
    1,512,384
    
    
    
    
    
    
    
    1,522,906Expenses:Net losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    760,602
    
    
    
    
    
    
    
    760,602Net acquisition expenses
    
    
    
    
    
    
    
    
    
    
    285,923
    
    
    
    
    
    
    
    285,923Operating expenses
    
    
    23,803
    
    
    
    544
    
    
    
    71,143
    
    
    
    
    
    
    
    95,490Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    (738
    )
    
    
    
    
    
    
    (738
    )Interest expense
    
    
    
    
    
    
    21,803
    
    
    
    2
    
    
    
    
    
    
    
    21,805Total expenses
    
    
    23,803
    
    
    
    22,347
    
    
    
    1,116,932
    
    
    
    
    
    
    
    1,163,082Income (loss) before income tax
expense (benefit)
    
    
    (14,314
    )
    
    
    (21,314
    )
    
    
    395,452
    
    
    
    
    
    
    
    359,824Income tax expense (benefit)
    
    
    
    
    
    
    (7,444
    )
    
    
    37,611
    
    
    
    
    
    
    
    30,167Net income (loss) before equity in
earnings of subsidiaries
    
    
    (14,314
    )
    
    
    (13,870
    )
    
    
    357,841
    
    
    
    
    
    
    
    329,657Equity in earnings of subsidiaries
    
    
    343,971
    
    
    
    64,741
    
    
    
    61,473
    
    
    
    (470,185
    )
    
    
    Net income (loss)
    
    
    329,657
    
    
    
    50,871
    
    
    
    419,314
    
    
    
    (470,185
    )
    
    
    329,657Preferred dividends
    
    
    10,382
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,382Net income attributable to common
shareholders
    
    $
    319,275
    
    
    
    50,871
    
    
    
    419,314
    
    
    
    (470,185
    )
    
    $
    319,275
 F-42




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Consolidating Statement of Operations
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2005
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    1,714,723
    
    
    
    
    
    
    $
    1,714,723Net investment income
    
    
    1,724
    
    
    
    937
    
    
    
    126,867
    
    
    
    (83
    )
    
    
    129,445Net realized losses on investments
    
    
    
    
    
    
    (15
    )
    
    
    (3,031
    )
    
    
    
    
    
    
    (3,046
    )Other income (expense)
    
    
    7,036
    
    
    
    
    
    
    
    (7,622
    )
    
    
    
    
    
    
    (586
    )Total revenue
    
    
    8,760
    
    
    
    922
    
    
    
    1,830,937
    
    
    
    (83
    )
    
    
    1,840,536Expenses:Net losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    1,505,425
    
    
    
    
    
    
    
    1,505,425Net acquisition expenses
    
    
    
    
    
    
    
    
    
    
    407,680
    
    
    
    (4,545
    )
    
    
    403,135Operating expenses
    
    
    13,393
    
    
    
    635
    
    
    
    51,337
    
    
    
    4,462
    
    
    
    69,827Net foreign currency exchange losses
    
    
    2
    
    
    
    
    
    
    
    2,109
    
    
    
    
    
    
    
    2,111Interest expense
    
    
    71
    
    
    
    19,935
    
    
    
    
    
    
    
    
    
    
    
    20,006Loss on repurchase of debt
    
    
    
    
    
    
    2,486
    
    
    
    
    
    
    
    
    
    
    
    2,486Total expenses
    
    
    13,466
    
    
    
    23,056
    
    
    
    1,966,551
    
    
    
    (83
    )
    
    
    2,002,990Loss before income tax benefit
    
    
    (4,706
    )
    
    
    (22,134
    )
    
    
    (135,614
    )
    
    
    
    
    
    
    (162,454
    )Income tax 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 loss of subsidiaries
    
    
    (132,781
    )
    
    
    (27,557
    )
    
    
    (62,160
    )
    
    
    222,498
    
    
    
    Net loss
    
    
    (137,487
    )
    
    
    (41,945
    )
    
    
    (180,553
    )
    
    
    222,498
    
    
    
    (137,487
    )Preferred dividends
    
    
    737
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    737Net loss attributable to common
shareholders
    
    $
    (138,224
    )
    
    
    (41,945
    )
    
    
    (180,553
    )
    
    
    222,498
    
    
    $
    (138,224
    )
 F-43




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Consolidating Statement of Operations
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2004
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    1,447,935
    
    
    
    
    
    
    $
    1,447,935Net investment income
    
    
    53
    
    
    
    164
    
    
    
    84,315
    
    
    
    
    
    
    
    84,532Net realized gains on investments
    
    
    
    
    
    
    6
    
    
    
    1,949
    
    
    
    
    
    
    
    1,955Other income
    
    
    2,944
    
    
    
    
    
    
    
    48
    
    
    
    219
    
    
    
    3,211Total revenue
    
    
    2,997
    
    
    
    170
    
    
    
    1,534,247
    
    
    
    219
    
    
    
    1,537,633Expenses:Net losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    1,019,804
    
    
    
    
    
    
    
    1,019,804Net acquisition expenses
    
    
    
    
    
    
    
    
    
    
    331,754
    
    
    
    (3,933
    )
    
    
    327,821Operating expenses
    
    
    12,725
    
    
    
    288
    
    
    
    49,387
    
    
    
    3,933
    
    
    
    66,333Net foreign currency exchange gains
    
    
    (3
    )
    
    
    
    
    
    
    (722
    )
    
    
    
    
    
    
    (725
    )Interest expense
    
    
    207
    
    
    
    9,061
    
    
    
    
    
    
    
    
    
    
    
    9,268Total expenses
    
    
    12,929
    
    
    
    9,349
    
    
    
    1,400,223
    
    
    
    
    
    
    
    1,422,501Income (loss) before income tax
expense (benefit)
    
    
    (9,932
    )
    
    
    (9,179
    )
    
    
    134,024
    
    
    
    219
    
    
    
    115,132Income tax expense (benefit)
    
    
    
    
    
    
    (3,213
    )
    
    
    33,562
    
    
    
    
    
    
    
    30,349Net income (loss) before equity in
earnings of subsidiaries
    
    
    (9,932
    )
    
    
    (5,966
    )
    
    
    100,462
    
    
    
    219
    
    
    
    84,783Equity in earnings of subsidiaries
    
    
    94,715
    
    
    
    55,006
    
    
    
    60,799
    
    
    
    (210,520
    )
    
    
    Net income
    
    $
    84,783
    
    
    
    49,040
    
    
    
    161,261
    
    
    
    (210,301
    )
    
    $
    84,783
 F-44




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Condensed Consolidating Statement of Cash Flows
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2006
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (9,650
    )
    
    
    (6,483
    )
    
    
    542,934
    
    
    
    
    
    
    $
    526,801Investing Activities:Proceeds from sale of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    1,564
    
    
    
    346,578
    
    
    
    
    
    
    
    348,142Proceeds from maturity or paydown of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    
    
    
    
    270,939
    
    
    
    
    
    
    
    270,939Acquisition of available-for-sale fixed
maturity securities
    
    
    
    
    
    
    (498
    )
    
    
    (1,082,784
    )
    
    
    
    
    
    
    (1,083,282
    )Dividends from subsidiaries
    
    
    1,600
    
    
    
    40,000
    
    
    
    
    
    
    
    (41,600
    )
    
    
    Increase in short-term investments
    
    
    
    
    
    
    
    
    
    
    (15,822
    )
    
    
    
    
    
    
    (15,822
    )Contributions to subsidiaries
    
    
    
    
    
    
    (300
    )
    
    
    
    
    
    
    300
    
    
    
    Net cash provided by (used in) investing
activities
    
    
    1,600
    
    
    
    40,766
    
    
    
    (481,089
    )
    
    
    (41,300
    )
    
    
    (480,023
    )Financing Activities:Dividends paid to common shareholders
    
    
    (19,029
    )
    
    
    
    
    
    
    (41,600
    )
    
    
    41,600
    
    
    
    (19,029
    )Dividends paid to preferred shareholders
    
    
    (9,818
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,818
    )Proceeds from exercise of share options
    
    
    12,975
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,975Capital contribution from parent
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    (300
    )
    
    
    Net cash used in financing activities
    
    
    (15,872
    )
    
    
    
    
    
    
    (41,300
    )
    
    
    41,300
    
    
    
    (15,872
    )Net increase (decrease) in cash and cash
equivalents
    
    
    (23,922
    )
    
    
    34,283
    
    
    
    20,545
    
    
    
    
    
    
    
    30,906Cash and cash equivalents at beginning of
year
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Cash and cash equivalents at end of year
    
    $
    106,040
    
    
    
    39,293
    
    
    
    706,319
    
    
    
    
    
    
    $
    851,652
 F-45




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Condensed Consolidating Statement of Cash Flows
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2005
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (4,999
    )
    
    
    (16,340
    )
    
    
    619,013
    
    
    
    
    
    
    $
    597,674Investing Activities:Proceeds from sale of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    3,026
    
    
    
    888,773
    
    
    
    
    
    
    
    891,799Proceeds from maturity or paydown of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    439
    
    
    
    97,492
    
    
    
    
    
    
    
    97,931Proceeds 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 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,026Proceeds from issuance of common shares
    
    
    425,757
    
    
    
    139,902
    
    
    
    
    
    
    
    (139,902
    )
    
    
    425,757Proceeds from issuance of debt
    
    
    
    
    
    
    246,900
    
    
    
    
    
    
    
    
    
    
    
    246,900Proceeds from issuance of preferred
shares
    
    
    167,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,509Capital 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 provided by financing activities
    
    
    593,517
    
    
    
    97,128
    
    
    
    535,600
    
    
    
    (482,502
    )
    
    
    743,743Net increase (decrease) in cash and cash
equivalents
    
    
    128,018
    
    
    
    (3,194
    )
    
    
    486,025
    
    
    
    
    
    
    
    610,849Cash and cash equivalents at beginning
of year
    
    
    1,944
    
    
    
    8,204
    
    
    
    199,749
    
    
    
    
    
    
    
    209,897Cash and cash equivalents at end of year
    
    $
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    $
    820,746
 F-46




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
  Non-Condensed Consolidating Statement of Cash Flows
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingFor the year ended December 31, 2004
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (8,400
    )
    
    
    (436
    )
    
    
    723,569
    
    
    
    
    
    
    $
    714,733Investing Activities:Proceeds from sale of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    998
    
    
    
    497,947
    
    
    
    
    
    
    
    498,945Proceeds from maturity or paydown of
available-for-sale fixed maturity
securities
    
    
    
    
    
    
    697
    
    
    
    135,775
    
    
    
    
    
    
    
    136,472Acquisition 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,406Proceeds from issuance of common shares
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,567Purchase 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
    
    
    
    
    
    
    
    104,436Cash and cash equivalents at beginning
of year
    
    
    3,413
    
    
    
    9,917
    
    
    
    92,131
    
    
    
    
    
    
    
    105,461Cash and cash equivalents at end of year
    
    $
    1,944
    
    
    
    8,204
    
    
    
    199,749
    
    
    
    
    
    
    $
    209,897
 F-47




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
  PageReport of Independent Registered Public Accounting Firm
    
    
    S-2Schedule I
    
    Summary of Investments  Other Than Investments in Related
Parties as of December 31, 2006
    
    
    S-3Schedule II
    
    Condensed Financial Information of the Registrant
    
    
    S-4Schedule III
    
    Supplementary Insurance Information for the years ended
December 31, 2006, 2005 and 2004
    
    
    S-7Schedule IV
    
    Reinsurance for the years ended December 31, 2006, 2005 and
2004
    
    
    S-8
  S-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    
 S-2




---



##### Table of Contents



SCHEDULE I
 Platinum Underwriters Holdings, Ltd. and Subsidiaries
 Amount atwhichshown inBalanceCost*
    
    
    Fair Value
    
    
    SheetFixed maturity securities:Bonds:United States Government and government
agencies and authorities
    
    $
    231,900
    
    
    
    227,599
    
    
    $
    227,599State, municipalities and political subdivisions
    
    
    162,600
    
    
    
    160,165
    
    
    
    160,165Foreign governments
    
    
    130,245
    
    
    
    127,075
    
    
    
    127,075Foreign corporate
    
    
    201,764
    
    
    
    197,799
    
    
    
    197,799Public utilities
    
    
    128,696
    
    
    
    126,175
    
    
    
    126,175All other corporate
    
    
    2,493,052
    
    
    
    2,456,566
    
    
    
    2,456,566Total bonds
    
    
    3,348,257
    
    
    
    3,295,379
    
    
    
    3,295,379Redeemable preferred stock
    
    
    39,558
    
    
    
    39,266
    
    
    
    39,266Total fixed maturity securities
    
    
    3,387,815
    
    
    
    3,334,645
    
    
    
    3,334,645Preferred stock
    
    
    11,246
    
    
    
    10,772
    
    
    
    10,772Other long term investments
    
    
    5,000
    
    
    
    4,745
    
    
    
    4,745Short-term investments
    
    
    27,123
    
    
    
    27,123
    
    
    
    27,123Total investments
    
    $
    3,431,184
    
    
    
    3,377,285
    
    
    $
    3,377,285
 
 *
    
    Original cost of fixed maturity securities reduced by repayments and adjusted for amortization of
premiums and discounts. S-3




---



##### Table of Contents



SCHEDULE II
 Platinum Underwriters Holdings, Ltd.
 2006
    
    
    2005ASSETSInvestment in affiliates
    
    $
    1,749,762
    
    
    $
    1,410,794Cash
    
    
    106,039
    
    
    
    129,962Other assets
    
    
    9,296
    
    
    
    2,963Total assets
    
    $
    1,865,097
    
    
    $
    1,543,719LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesAccrued expenses and other liabilities
    
    $
    7,036
    
    
    $
    3,470Total liabilities
    
    
    7,036
    
    
    
    3,470Shareholders equityPreferred shares, $.01 par value, 25,000,000
shares authorized, 5,750,000 shares issued and
outstanding
    
    
    57
    
    
    
    57Common shares, $.01 par value, 200,000,000 shares
authorized, 59,671,959 and 59,126,675 shares
issued and outstanding, respectively
    
    
    597
    
    
    
    590Additional paid-in capital
    
    
    1,545,979
    
    
    
    1,527,316Unearned share grant compensation
    
    
    
    
    
    
    (2,467
    )Accumulated other comprehensive income (loss)
    
    
    (44,289
    )
    
    
    (40,718
    )Retained earnings
    
    
    355,717
    
    
    
    55,471Total shareholders equity
    
    
    1,858,061
    
    
    
    1,540,249Total liabilities and shareholders equity
    
    $
    1,865,097
    
    
    $
    1,543,719
 S-4




---



##### Table of Contents



SCHEDULE II, continued
 Platinum Underwriters Holdings, Ltd.
 2006
    
    
    2005
    
    
    2004Revenues:Net investment income
    
    $
    5,912
    
    
    
    1,724
    
    
    $
    53Other income
    
    
    3,577
    
    
    
    7,036
    
    
    
    2,9449,489
    
    
    
    8,760
    
    
    
    2,997Expenses:Interest expenses
    
    
    
    
    
    
    71
    
    
    
    207Operating expenses
    
    
    23,803
    
    
    
    13,395
    
    
    
    12,722Total expenses
    
    
    23,803
    
    
    
    13,466
    
    
    
    12,929Net loss before equity in earnings of affiliate
    
    
    (14,314
    )
    
    
    (4,706
    )
    
    
    (9,932
    )Equity in earnings (loss) of affiliates
    
    
    343,971
    
    
    
    (132,781
    )
    
    
    94,715Net income (loss) before preferred dividends
    
    
    329,657
    
    
    
    (137,487
    )
    
    
    84,783Preferred dividends
    
    
    10,382
    
    
    
    737
    
    
    
    Net income (loss) attributable to common
shareholders
    
    $
    319,275
    
    
    
    (138,224
    )
    
    $
    84,783
 S-5




---



##### Table of Contents



SCHEDULE II, continued
 Platinum Underwriters Holdings, Ltd.
 2006
    
    
    2005
    
    
    2004Operating Activities:Net loss before equity in earnings of affiliates
    
    $
    (14,314
    )
    
    
    (4,706
    )
    
    $
    (9,932
    )Adjustments to reconcile net income to net cash
provided in operations:Share based compensation
    
    
    3,552
    
    
    
    2,313
    
    
    
    1,777Depreciation and amortization
    
    
    129
    
    
    
    129
    
    
    
    125Other, net
    
    
    983
    
    
    
    (2,735
    )
    
    
    (369
    )Net cash used in operating activities
    
    
    (9,650
    )
    
    
    (4,999
    )
    
    
    (8,399
    )Investing Activities:Dividends and distributions from subsidiaries
    
    
    1,600
    
    
    
    17,000
    
    
    
    22,000Contributions to subsidiaries
    
    
    
    
    
    
    (477,500
    )
    
    
    (250
    )Net cash provided by (used in)
investing activities
    
    
    1,600
    
    
    
    (460,500
    )
    
    
    21,750Financing Activities:Dividends paid to preferred shareholders
    
    
    (9,818
    )
    
    
    
    
    
    
    Dividends paid to common shareholders
    
    
    (19,029
    )
    
    
    (14,775
    )
    
    
    (13,807
    )Proceeds from exercise of share options
    
    
    12,974
    
    
    
    15,026
    
    
    
    7,406Net proceeds from issuance of common shares
    
    
    
    
    
    
    425,757
    
    
    
    1,566Net proceeds from issuance of preferred shares
    
    
    
    
    
    
    167,509
    
    
    
    Purchase of common shares
    
    
    
    
    
    
    
    
    
    
    (9,985
    )Net cash (used in) provided by
financing activities
    
    
    (15,873
    )
    
    
    593,517
    
    
    
    (14,820
    )Net increase (decrease) in cash and
cash equivalents
    
    
    (23,923
    )
    
    
    128,018
    
    
    
    (1,469
    )Cash and cash equivalents at beginning of year
    
    
    129,962
    
    
    
    1,944
    
    
    
    3,413Cash and cash equivalents at end of year
    
    $
    106,039
    
    
    
    129,962
    
    
    $
    1,944
 S-6




---



##### Table of Contents



SCHEDULE III
 Platinum Underwriters Holdings, Ltd.
 Net unpaid
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    Net losses
    
    AmortizationDeferred
    
    losses
    
    
    
    
    
    policy
    
    
    
    
    
    
    
    
    
    and loss
    
    of deferredpolicy
    
    and loss
    
    Net
    
    claims and
    
    Net
    
    Net
    
    adjustment
    
    policy
    
    Other
    
    Netacquisition
    
    adjustment
    
    unearned
    
    benefits
    
    earned
    
    investment
    
    expenses
    
    acquisition
    
    operating
    
    writtenPeriod
    
    costs
    
    expenses
    
    premiums
    
    payable
    
    premium
    
    income
    
    incurred
    
    costs
    
    expenses
    
    premiumsYear ended
December 31, 2006:Property and Marine
    
    $
    9,969
    
    
    
    537,794
    
    
    
    46,022
    
    
    
    
    
    
    
    448,959
    
    
    
    
    
    
    
    145,900
    
    
    
    47,183
    
    
    
    
    
    
    $
    424,929Casualty
    
    
    72,641
    
    
    
    1,467,879
    
    
    
    289,966
    
    
    
    
    
    
    
    764,341
    
    
    
    
    
    
    
    522,815
    
    
    
    114,880
    
    
    
    
    
    
    
    757,675Finite Risk
    
    
    
    
    
    
    320,554
    
    
    
    4,124
    
    
    
    
    
    
    
    123,401
    
    
    
    
    
    
    
    91,887
    
    
    
    58,695
    
    
    
    
    
    
    
    (5,991
    )Total
    
    
    82,610
    
    
    
    2,326,227
    
    
    
    340,112
    
    
    
    
    
    
    
    1,336,701
    
    
    
    187,987
    
    
    
    760,602
    
    
    
    220,758
    
    
    
    24,194
    
    
    
    1,176,613Year ended
December 31, 2005:Property and Marine
    
    
    14,357
    
    
    
    816,328
    
    
    
    66,741
    
    
    
    
    
    
    
    569,173
    
    
    
    
    
    
    
    756,742
    
    
    
    70,005
    
    
    
    
    
    
    
    575,055Casualty
    
    
    73,622
    
    
    
    1,107,316
    
    
    
    292,513
    
    
    
    
    
    
    
    789,629
    
    
    
    
    
    
    
    511,609
    
    
    
    140,758
    
    
    
    
    
    
    
    809,031Finite Risk
    
    
    42,821
    
    
    
    345,011
    
    
    
    134,865
    
    
    
    
    
    
    
    355,921
    
    
    
    
    
    
    
    237,074
    
    
    
    88,797
    
    
    
    
    
    
    
    333,636Total
    
    
    130,800
    
    
    
    2,268,655
    
    
    
    494,119
    
    
    
    
    
    
    
    1,714,723
    
    
    
    129,455
    
    
    
    1,505,425
    
    
    
    299,560
    
    
    
    14,158
    
    
    
    1,717,722Year ended
December 31, 2004:Property and Marine
    
    
    15,747
    
    
    
    410,347
    
    
    
    64,985
    
    
    
    
    
    
    
    485,135
    
    
    
    
    
    
    
    349,557
    
    
    
    58,792
    
    
    
    
    
    
    
    504,439Casualty
    
    
    72,454
    
    
    
    715,314
    
    
    
    278,634
    
    
    
    
    
    
    
    611,893
    
    
    
    
    
    
    
    418,355
    
    
    
    118,734
    
    
    
    
    
    
    
    677,399Finite Risk
    
    
    47,837
    
    
    
    253,566
    
    
    
    155,917
    
    
    
    
    
    
    
    350,907
    
    
    
    
    
    
    
    251,892
    
    
    
    46,781
    
    
    
    
    
    
    
    464,175Total
    
    $
    136,038
    
    
    
    1,379,227
    
    
    
    499,536
    
    
    
    
    
    
    
    1,447,935
    
    
    
    84,532
    
    
    
    1,019,804
    
    
    
    224,307
    
    
    
    13,196
    
    
    $
    1,646,013
 S-7




---



##### Table of Contents



SCHEDULE IV
 Platinum Underwriters Holdings, Ltd.
 Assumed from
    
    
    
    
    
    
    Percentage ofDirect
    
    
    Ceded to other
    
    
    other
    
    
    
    
    
    
    amountDescription
    
    Amount
    
    
    companies
    
    
    companies
    
    
    Net Amount
    
    
    assumed to netProperty and liability
premiums written:Year ended December 31, 2006:Property and Marine
    
    
    
    
    
    $
    89,387
    
    
    
    514,316
    
    
    $
    424,929
    
    
    
    121.0
    %Casualty
    
    
    
    
    
    
    74
    
    
    
    757,749
    
    
    
    757,675
    
    
    
    100.0
    %Finite Risk
    
    
    
    
    
    
    9,126
    
    
    
    3,135
    
    
    
    (5,991
    )
    
    
    (52.3
    %)Total
    
    
    
    
    
    
    98,587
    
    
    
    1,275,200
    
    
    
    1,176,613
    
    
    
    108.4
    %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
    %
 S-8