Lower investment returns, higher taxes limit Platinum's profit

Pembroke, Bermuda-based Platinum Underwriters Holdings Ltd. generated net income of $38.3 million during the third quarter, a 54.9% decline from the same period last year, the company said.

The decline in quarterly net income was due to investment returns that were near all-time lows as well as higher taxes because a much larger proportion of the reinsurer’s income came from its U.S. operating company, Chief Risk Officer Kenneth Kurtzman said in an email.

Net written premiums decreased $8.1 million, or 5.5%, to $137.9 million while net investment income dropped $5.5 million, or 23.5%, to $17.8 million, the company said Wednesday.

Platinum’s combined ratio increased 4.2 points to 65.5% for the quarter.

“Our performance reflects favorable prior-period development, investment results on a total return basis and active capital management,” Platinum CEO Michael D. Price said in a statement.

He said Platinum expects to write a portfolio of business next year that is similar to this year.

For the nine months ended Sept. 30, net income was $174.4 million, down 15% from $205.7 million during the same period last year.

Net written premiums declined $12.1 million, or 2.8%, to $419 million for the period, and net investment income dropped $23.8 million to $54.1 million.

Platinum’s combined ratio decreased 12.9 points to 62.3% for the nine-month period.