Platinum Underwriters Holdings Ltd. saw its profits drop by 19.3 percent ($20.2 million) for the first quarter of 2009 compared to the same period last year, despite strong underwriting gains and solid investment performance.

The insurer reported net income of $84.9 million or $1.58 per diluted common share for the quarter ended March 31, 2009, while net premiums earned were down 17.9 percent on the previous year at $247.8 million.

Net favorable development was $22.1 million, compared with $29.5 million in the same quarter in 2008, but net investment income and net realised gains on investments increased 5.3 percent to $54.8 million, over the same quarter last year.

Michael Price, Platinum's CEO, said: "Platinum's results in the quarter reflect strong current period underwriting gains, favorable prior period development, solid investment performance and active capital management.

"Our book value per share was $35.76 as of March 31, 2009, an increase of 3.4 percent from December 31, 2008, and reflects share repurchases and the conversion of our preferred shares during the quarter.

"During the quarter, we experienced more attractive underwriting conditions for property and marine than for casualty.

"The US property catastrophe market continues to improve and we expect increased demand and higher pricing for the balance of the year."

Net premiums written dropped $51 million or 17.2 percent to $245.3 million, while the company's GAAP combined ratio rose 1.7 percentage points to 80.1 percent.