Platinum shares slide after profits fall
Shares of Bermuda reinsurer Platinum Underwriters Holdings Ltd fell more than four percent yesterday after the company's second-quarter earnings fell short of analysts' expectations.
Platinum reported net income of $36.2 million for the April through June period, compared to $49.9 million in the same period last year, and diluted earnings per common share of $1.34 for the quarter ended June 30, 2014.
Operating earnings of $1.37 per share compared to the $1.52 expectation of analysts tracked by Yahoo Finance.
The results for the quarter include net premiums earned of $124.8 million, net favourable development of $28.6 million and net investment income of $17.6 million.
Combined ratio — a measure of underwriting profitability that reflects the proportion of premium dollars sopent on claims and expenses — was 74.2 percent, down from 74.4 percent in the second quarter of last year.
Platinum chief executive officer Michael Price said: “Our results reflect favourable prior period development, strong investment results on a total return basis, no losses from major catastrophes and active capital management. Our book value per common share grew to $67.38 as of June 30, 2014, an increase of 3.1 percent from March 31, 2014.
“Absent major events in the insurance or capital markets, we expect continued downward pressure on overall reinsurance rate adequacy. We will continue emphasising profitability over market share while seeking to maintain a position in larger markets by participating on the most attractive business available.”
The company wrote less business, with gross premiums written down 17 percent from the prior-year period at $25.1 million.
Platinum's shares fell $2.81, or 4.3 percent, in New York Stock Exchange trading yesterday to close on $62.60.