A.M. Best Affirms Ratings of Platinum Underwriters Holdings and its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Platinum Underwriters Bermuda, Ltd.(Platinum Bermuda) and its strategic affiliate Platinum Underwriters Reinsurance, Inc. A.M. Best also has affirmed the ICR of “bbb” of Platinum Underwriters Holdings, Ltd. (Platinum) (Bermuda) [NYSE: PTP] and debt ratings of PlatinumandPlatinum Underwriters Finance, Inc. The outlook for all ratings is stable. (See below for a detailed list of the debt ratings.)

The ratings reflect the group’s excellent capitalization, consistently strong operating results and well-established business position as a global, multiline provider of reinsurance coverages. The ratings also reflect the group’s good financial flexibility, stable management team and sound enterprise risk management capabilities. Financial leverage for Platinum has been moderate with debt to total capitalization in the low double digits. The three-year rolling fixed charge coverage is commensurate with the assigned ratings.

Somewhat offsetting these strengths are the challenges that have occurred in the global reinsurance market including several significant catastrophes over the past several months. While first-quarter 2011 results for the reinsurance sector, including Platinum’s, were negatively impacted by the global catastrophes, Platinum’s financial results were in line with A.M. Best’s expectations. In addition, rate softening, particularly in casualty lines of business, which has been deteriorating for some time, has made it difficult to find new areas for profitable growth. However, Platinum has a strong focus on underwriting discipline and active cycle management, which is evidenced by the company’s substantial reduction in premium volume over the past five years. This should help insulate the company from the potential for future underwriting losses and place the company in a strong position to participate in future market opportunities.

The following debt ratings have been affirmed:

Platinum Underwriters Finance, Inc.—(guaranteed by Platinum Underwriters Holdings, Ltd.)

-- “bbb” on $250 million 7.50% senior unsecured notes, due 2017

The following indicative ratings available under the shelf registration have been affirmed:

Platinum Underwriters Holdings, Ltd.—

-- “bbb” on senior unsecured debt

-- “bbb-” on subordinated debt

-- “bb+” on preferred stock

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Understanding BCAR for Property/Casualty Insurers”; “Natural Catastrophe Stress Test Methodology”; “Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.Greg ReisnerSenior Financial Analyst
908-439-2200, ext. 5224
greg.reisner@ambest.com
orJohn AndreGroup Vice President
908-439-2200, ext. 5619
john.andre@ambest.com
orRachelle MorrowSenior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
orJim PeavyAssistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com

Source: A.M. Best Co.