Best Places Platinum’s Ratings Under Review, Downgrades Credit, Debt Ratings; Company Comments

April 1, 2005

A.M. Best Co. announced that it has placed the financial strength rating of “A” (Excellent) of the reinsurance subsidiaries of Bermuda-based Platinum Underwriters Holdings, Ltd. under review with negative implications. Best also said it has downgraded the issuer credit rating of the reinsurance subsidiaries to “a” from “a+” and of Platinum to “bbb” from “bbb+”.

It also noted that the ratings assigned to the company’s existing equity security units, as well as securities available under the company’s current shelf offering, have also been downgraded. All of the debt ratings remain under review with negative implications.

“These rating actions follow A.M. Best’s year-end review of Platinum and its determination that the risk-adjusted capital position of the group has declined more than originally estimated from prior year levels due to the losses recognized from the southeast wind storms in 2004 and the resulting increase to the group’s operating leverage,” said the announcement. “Platinum Underwriters Bermuda, Ltd. (Platinum Bermuda), which assumes a significant amount of business from the group’s other operating companies, has realized a disproportionate reduction in its risk-adjusted capital position.”

Best noted that Platinum has provided it with a plan to “strengthen—in the near term—the financial position of the overall group as well as that of Platinum Bermuda.” The rating agency indicated that if the plan proves successful, it expects that Platinum’s “A” (Excellent) financial strength rating “will be affirmed with a stable outlook.”

Best warned, however, that if “management is unable to successfully complete this plan in the near term, the ‘A’ (Excellent) rating of Platinum Bermuda will likely be downgraded and all other ratings and rating outlooks will be reevaluated.”

Commenting on the rating actions, Platinum CEO Gregory E. A. Morrison stated: “We are confident that we can implement our plan for A.M. Best to affirm our financial strength rating of ‘A’ (Excellent) with a stable outlook. We believe that we have established Platinum in the marketplace as a professional reinsurer offering our clients strong financial security and we will continue to work diligently to maintain their support. As of December 31, 2004, the aggregate capital of the Group was in excess of $1.2 billion.”

Best’s announcement gave the following details:

The financial strength rating of “A” (Excellent) has been placed under review with negative implications 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 downgraded and placed under review with negative implications:

Platinum Underwriters Finance Inc.— to “bbb” from “bbb+” on $137.5 million in equity security units, due 2005.

The following indicative ratings assigned to debt securities available under the $750 million shelf registration have been downgraded and placed under review with negative implications:

Platinum Underwriters Holdings, Ltd.—
— to “bbb” from “bbb+” on senior unsecured debt
— to “bbb-” from “bbb” on subordinated debt
— to “bb+” from “bbb-” on preferred shares

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