Best Affirms Platinum Subsidiaries ‘A’ Rating

February 27, 2004

A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) of the reinsurance subsidiaries of Bermuda-based Platinum Underwriters Holdings, Ltd. It also affirmed the “bbb+” rating of the group’s equity security units issued by Platinum Underwriters Finance, Inc. (Delaware) and guaranteed by Platinum. The outlook for all ratings is stable.

“The rating reflects the group’s excellent capitalization and strong operating performance since its inception in late 2002. In 2003, the group reported a combined ratio of 84.7% and increased total capital 13.8% to $1.2 billion,” said Best. “Included in capital is $137.5 million in equity security units which are mandatorily convertible to common stock in 2005.”

The bulletin noted that Platinum was originally formed to assume the reinsurance operations of The St. Paul Companies, and “has no insurance obligations related to business produced prior to 2002. Additionally, Platinum has effectively utilized its ‘incumbent status’ inherited from St. Paul to adhere to its initial business plan and to establish itself as a multi-line global reinsurer undertaking casualty, property and marine and finite risks.”

Best observed, however, that “Platinum’s strengths are partially offset by increased competition from both established reinsurers as well as other reinsurance companies formed in the wake of the September 11th attacks. This competition, combined with a light catastrophe period, has already resulted in a softening of rates in some of the group’s core markets, and could potentially reduce expected returns.”

The financial strength ratings of “A” (Excellent) have been affirmed for the following operating subsidiaries of Platinum Underwriters Holdings, Ltd.:
— Platinum Underwriters Reinsurance, Inc.
— Platinum Re (UK) Limited
— Platinum Underwriters Bermuda, Ltd.

The following debt rating has been affirmed:
Platinum Underwriters Finance, Inc.—- “bbb+” rating on $137.5 million in equity security units, due 2005

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