Platinum’s profits dip; CEO warns on rates

Platinum Underwriters’ net profit dipped in the first quarter of 2014 compared with the same period last year in a set of otherwise consistent results. But its CEO has warned of further downward pressure on reinsurance rates.

The company made a net profit of $63.7 million for the quarter, a 26.3 percent decline on the same period the year before when it made $86.5 million. The result for the quarter included net premiums earned of $126.3 million, net favorable development of $47 million and net investment income of $17.7 million.

The company’s gross written premiums showed a small amount of growth at $138.3 million compared with $135.2 million in the same period last year. Its combined ratio was 54.1 percent compared with 45.4 percent in the same period last year and 63.5 percent in the fourth quarter of 2013.

Michael Price, Platinum's chief executive, said: “Our results reflect favorable prior period development, the absence of major catastrophe activity, strong investment results on a total return basis and active capital management. Our book value per common share grew to $65.35 as of March 31, 2014, an increase of 5.3% from December 31, 2013.”

He also warned that downward pressure on reinsurance rates remains a concern but said that he believes Platinum is well positioned to cope with this.

“Absent major events in the insurance or capital markets, we expect continued downward pressure on overall reinsurance rate adequacy. Our present balance sheet composition and broad market access leave us well positioned to take advantage of quality reinsurance underwriting, investment and capital management opportunities as they arise,” he said.