Profile: Platinum Underwriters Holdings Ltd (PTP)
9 Dec 2013
Platinum Underwriters Holdings, Ltd. (Platinum Holdings) is a holding company. The Company operates in three segments: Property and Marine, Casualty and Finite Risk. Through its reinsurance subsidiaries the Company provides property and marine, casualty and finite risk reinsurance coverages to a diverse clientele of insurers and select reinsurers on a worldwide basis. Platinum Regency Holdings (Platinum Regency) is an intermediate holding company and a wholly owned subsidiary of Platinum Holdings. Platinum Finance is an intermediate holding company and a wholly owned subsidiary of Platinum Regency. The Company operates through two licensed reinsurance subsidiaries: Platinum Underwriters Bermuda, Ltd. (Platinum Bermuda), a Bermuda reinsurance company, and Platinum Underwriters Reinsurance, Inc. (Platinum US), a United States reinsurance company. Platinum Bermuda is a wholly owned subsidiary of Platinum Holdings and Platinum US is a wholly owned subsidiary of Platinum Finance. Platinum Administrative Services, Inc. and Platinum UK Services Company Limited are service company subsidiaries that provide administrative support services to the Company.
Property and Marine
Property reinsurance protects a ceding company against financial loss arising out of damage to property or loss of its use caused by an insured peril. Property catastrophe reinsurance protects a ceding company against losses arising out of multiple claims for a single event while property per-risk reinsurance protects a ceding company against loss arising out of a single claim for a single event. Property and Marine operating segment includes principally property (including crop) and marine coverages that cover risks located in the United States and select international markets. This business includes property catastrophe excess-of-loss reinsurance contracts, property per-risk excess-of-loss reinsurance contracts and property proportional reinsurance contracts. The Company writes a limited amount of property facultative reinsurance. Marine reinsurance treaties include excess-of-loss, as well as proportional treaties.
The Company provides reinsurance coverage for damage to property and crops. Its catastrophe excess-of-loss reinsurance contracts provide defined limits of liability, permitting the Company to quantify its aggregate maximum loss exposure for various catastrophic events. The Company provides reinsurance coverage for marine, offshore energy and aerospace insurance programs. Coverages reinsured include hull damage, protection and indemnity, cargo damage, satellite damage, aviation hull, aviation liability, and general marine liability.
Casualty reinsurance protects a ceding company against financial loss arising out of the obligation to others for loss or damage to persons or property. Its Casualty operating segment principally includes reinsurance contracts that cover general and product liability, professional liability, accident and health, umbrella liability, workers' compensation, casualty clash, automobile liability, surety, trade credit, and political risk. The Company writes casualty reinsurance on an excess-of-loss basis. The Company provides 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 coverage of commercial, farmowners and homeowners policies as well as third-party liability coverages, such as product liability. The Company writes reinsurance contracts covering professional liability programs, including directors and officers, employment practices, and errors and omissions for professionals such as accountants, lawyers, medical professionals, architects and engineers. The underlying insurance products for these lines of business are generally written on-a-claims made basis, which requires notification of claims related to the liabilities insured under the policy to be submitted to the insurer during a specified coverage period.
The Company provides accident and health reinsurance, covering employer self-insured or fully insured health plans, on a quota share and excess-of-loss basis. It also writes reinsurance of student health insurance, sports disability, Medicare and Medicare supplement and other forms of accident and health insurance. The Company provides reinsurance of umbrella policies, which are excess insurance policies that provide 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. The Company reinsures workers’ compensation on a catastrophic basis, as well as on a per-claimant basis. Its exposure to workers’ compensation would generally arise from a single occurrence, such as a factory explosion, or earthquake, which involves claims from more than one employer. The Company provides casualty clash reinsurance, which covers losses arising from a single event insured under more than one policy or where there are multiple claimants under one policy. This type of reinsurance is analogous to property catastrophe reinsurance, but written for casualty lines of business.
The Company provides automobile liability reinsurance, which relates to the risks associated with the insured’s vehicle and third-party coverage for the insured’s liability to other parties for injuries, for damage to the insured’s property due to the use of the insured vehicle and coverage for uninsured motorists and medical payments. The Company reinsure 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 compliance with obligations arising out of regulatory or statutory requirements.
Trade credit insurance is purchased by companies to ensure that invoices for goods and services provided to their customers are paid on time. The Company provides trade credit reinsurance for financial losses sustained through the failure of an insured’s customers to pay for goods or services supplied to them. Political risk reinsurance covers the impairment of assets as a result of expropriation, political violence, currency inconvertibility, and the failure by sovereign countries to honor their obligations. The locations of risks that the Company reinsures include Asia, Central and Eastern Europe, Latin America, Africa and the Middle East.
Finite risk reinsurance, often referred to as non-traditional reinsurance, includes principally structured reinsurance contracts with ceding companies whose needs may not be met through traditional reinsurance products. Reinsurance contracts classified as finite risk are typically structured to include loss limitation or loss mitigation features. In exchange for contractual features that limit its risk, these reinsurance contracts typically provide the potential for a profit commission to the ceding company. The classes of risks underwritten through its finite risk contracts are generally consistent with the classes covered by its traditional products. The finite risk reinsurance contracts that the Company underwrites generally provide prospective protection, meaning coverage is provided for losses that are incurred after inception of the contract, as contrasted with retrospective coverage, which covers losses that are incurred prior to inception of the contract. The three main categories of its finite risk reinsurance contracts are quota share, multi-year excess-of-loss and whole account aggregate stop loss.
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. These reinsurance contracts often provide 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 reinsurance 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.
The 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 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 Company competes with Alterra Capital Holdings Limited, Arch Capital Group Ltd., Aspen Insurance Holdings Limited, Axis Capital Holdings Limited, Endurance Specialty Holdings Ltd., Everest Re Group, Ltd., Flagstone Reinsurance Holdings Limited, Montpelier Re Holdings Ltd., PartnerRe Ltd., RenaissanceRe Holdings Ltd. (RenaissanceRe), Transatlantic Holdings, Inc. and Validus Holdings, Ltd.
Platinum Underwriters Holdings Ltd
The Belvedere Building
69 Pitts Bay Road
PEMBROKE HM 08