The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q for the period ended September 30, 2012 (this "Form 10-Q") and the consolidated financial statements and related notes thereto and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the "2011 Form 10-K"). This Form 10-Q contains forward-looking statements that involve risks and uncertainties. Please see Item 1A, "Risk Factors," in our 2011 Form 10-K and the "Note on Forward-Looking Statements" below. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Non-GAAP Financial Measures

Underwriting income or loss and underwriting ratios measure the performance of the Company's underwriting function. Underwriting income or loss consists of net premiums earned less net losses and loss adjustment expenses ("LAE") and net underwriting expenses. Net underwriting expenses include net acquisition expenses and, when referring to a segment result, also includes operating costs related to the underwriting operations of the segment. Underwriting income or loss excludes income and expenses related to net investment income, net realized gains or losses on investments, net impairment losses on investments, net changes in fair value of derivatives, net foreign exchange gains or losses, corporate expenses not allocated to underwriting operations, interest expense and other revenues and expenses. Underwriting ratios are considered to be non-GAAP measures and are calculated for net losses and LAE, net acquisition expense and net underwriting expense. The ratios are calculated by dividing the related expense by net earned premiums.

We conduct our worldwide reinsurance business through three operating segments:
Property and Marine, Casualty and Finite Risk. Segment underwriting income is reconciled to the U.S. GAAP measure of income or loss before income taxes in Note 9 to the "Consolidated Financial Statements" in this Form 10-Q. The measures we use in evaluating our operating segments should not be used as a substitute for measures determined under U.S. GAAP.

Overview

Platinum Underwriters Holdings, Ltd. ("Platinum Holdings") is a holding company domiciled in Bermuda. Through our reinsurance subsidiaries we provide property and marine, casualty and finite risk reinsurance coverages to a diverse clientele of insurers and select reinsurers on a worldwide basis. Platinum Holdings and its consolidated subsidiaries (collectively, the "Company") include Platinum Holdings, Platinum Underwriters Bermuda, Ltd. ("Platinum Bermuda"), Platinum Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Regency Holdings ("Platinum Regency"), Platinum Underwriters Finance, Inc. ("Platinum Finance") and Platinum Administrative Services, Inc. The terms "we," "us," and "our" refer to the Company, unless the context otherwise indicates.

At September 30, 2012, our capital resources of $2.0 billion consisted of $1.8 billion of common shareholders' equity and $250.0 million of Series B 7.5% Notes due June 1, 2017 (the "debt obligations"). Our net income was $84.9 million and $205.7 million for the three and nine months ended September 30, 2012, respectively, which compares with a net loss of $53.5 million and $231.1 million for the three and nine months ended September 30, 2011, respectively. Our results for the three and nine months ended September 30, 2012 improved over the three and nine months ended September 30, 2011 as a result of a lower level of major catastrophe losses, an increase in net favorable development on prior years' reserve balances and an increase in net realized gains on investments, partially offset by a decrease in our net investment income.

Our net premiums written were $146.0 million and $431.1 million for the three and nine months ended September 30, 2012, respectively, and $177.1 million and $497.8 million for the three and nine months ended September 30, 2011, respectively. The decrease in net premiums written for the three and nine months ended September 30, 2012 as compared with the same periods in 2011 was primarily due to the non-renewal of business that did not meet our minimum pricing standards and our desire to reduce our exposure to catastrophe events.

Current Outlook

In the Property and Marine segment, we currently believe that reinsurers generally remain well-capitalized and that competitive pressure will keep property catastrophe reinsurance rates from rising significantly during the January 1, 2013 renewal period. Accordingly, we currently expect that the portfolio of business we write in our Property and Marine segment during 2013 will be similar to our current in-force book of business. We expect that our Property and Marine segment will continue to represent a large proportion of our overall book of business, which could result in significant volatility in our results of operations.

In the Casualty segment, we currently expect that insurance and reinsurance capacity will remain abundant and that competition will continue to limit the potential for significant increases in risk-adjusted rates. Although certain casualty rate increases appear to exceed trends in loss costs, we believe that the expected profitability of many casualty reinsurance contracts will not improve due to lower investment yields. We expect that select casualty reinsurance contracts will continue to offer adequate returns and that the portfolio of business we write in our Casualty segment during 2013 will be similar to our current in-force book of business.

Reflecting a continued lack of demand for finite risk covers, we expect to write a relatively small portfolio of business in our Finite Risk segment during 2013.

Based on our current reserve position, portfolio of in-force business, asset portfolio, and underwriting prospects for the near term, we believe that we are well capitalized with an adequate margin above the rating agency targets for a company with our ratings. If our business performs as expected, we anticipate that we may generate excess capital over time. Under those conditions, we would have the financial flexibility to expand our underwriting, hold riskier assets, or repurchase our common shares or debt securities. While we will consider the risk-adjusted pricing prevailing in the reinsurance and financial markets at the time, we currently view share repurchase as a relatively attractive use of excess capital.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that are inherently subjective in nature that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent liabilities. Actual results may differ materially from these estimates. Our critical accounting estimates used in the preparation of our consolidated financial statements include premiums written and earned, unpaid losses and LAE, reinsurance recoverable, valuation of investments and income taxes. In addition, estimates are used to evaluate risk transfer for assumed and ceded reinsurance transactions. For a detailed discussion of our critical accounting estimates, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our 2011 Form 10-K.

Results of Operations

Three Months Ended September 30, 2012 as Compared with the Three Months Ended
September 30, 2011

Net income (loss) and diluted earnings (loss) per common share for the three
months ended September 30, 2012 and 2011 were as follows ($ and amounts in
thousands, except diluted earnings (loss) per common share):

                                                         Three Months Ended
                                                            September 30,
                                                        2012             2011         Net change
Underwriting income (loss)                           $   53,691       $  (76,052 )   $    129,743
Net investment income                                    23,209           29,762           (6,553 )
Net realized gains on investments                        22,982            7,498           15,484
Net impairment losses on investments                       (699 )         (4,451 )          3,752
Other revenues (expenses)                               (11,766 )        (12,082 )            316
Income (loss) before income taxes                        87,417          (55,325 )        142,742
Income tax (expense) benefit                             (2,553 )          1,790           (4,343 )
Net income (loss)                                    $   84,864       $  (53,535 )   $    138,399
Weighted average shares outstanding for diluted
earnings (loss) per common share                         33,272           37,183           (3,911 )
Diluted earnings (loss) per common share             $     2.54       $    (1.43 )   $       3.97

The net income and diluted income per common share for the three months ended September 30, 2012 as compared with the net loss and diluted loss per common share for the three months ended September 30, 2011 was primarily due to an increase in the net underwriting result attributable to a decrease in net losses from major catastrophe activity and an increase in net favorable development. In addition, there was an increase in net realized gains on investments, partially offset by a decrease in net investment income and higher income taxes. As the three months ended September 30, 2011 resulted in a net loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation.

Underwriting Results

Net underwriting income was $53.7 million for the three months ended September 30, 2012, which compares with a net underwriting loss of $76.1 million for the three months ended September 30, 2011. The change in the net underwriting result was due primarily to a decrease in net losses from major catastrophes in 2012 and an increase in net favorable development.

Net losses from major catastrophes consist of gross losses and LAE, net of any retrocessional recoveries and reinstatement premiums earned.

Net favorable or unfavorable development is the development of prior years' unpaid losses and LAE and the related impact of premiums and commissions. Net favorable or unfavorable loss development excludes the related impact of the premiums and commissions.

Net losses from major catastrophes were $6.4 million and $122.7 million for the three months ended September 30, 2012 and 2011, respectively. Underwriting losses on our 2012 underwriting year North American crop business as a result of the severe drought conditions in the United States were $17.6 million for the three months ended September 30, 2012. Net favorable development was $61.3 million and $27.8 million for the three months ended September 30, 2012 and 2011, respectively.

The following discussion and analysis reviews our underwriting results by operating segment.

Property and Marine

The following table summarizes underwriting results and ratios for the Property
and Marine segment for the three months ended September 30, 2012 and 2011 ($ in
thousands):

                                                         Three Months Ended September 30,
                                                                                                Increase
                                                              2012                2011         (decrease)
Gross premiums written                                   $        65,135       $  102,141     $    (37,006 )
Ceded premiums written                                               259              508             (249 )
Net premiums written                                              64,876          101,633          (36,757 )
Net premiums earned                                               61,900           85,239          (23,339 )
Net losses and LAE                                                26,790          156,995         (130,205 )
Net acquisition expenses                                           7,078           12,068           (4,990 )
Other underwriting expenses                                        7,661            6,686              975
Property and Marine segment underwriting income (loss)   $        20,371       $  (90,510 )   $    110,881

Underwriting ratios:
                                                                                                   (140.9)
Net loss and LAE                                                    43.3 %          184.2 %         points
Net acquisition expense                                             11.4 %           14.2 %   (2.8) points
Other underwriting expense                                          12.4 %            7.8 %     4.6 points
                                                                                                   (139.1)
Combined                                                            67.1 %          206.2 %         points

The Property and Marine segment underwriting result improved by $110.9 million for the three months ended September 30, 2012 as compared with the three months ended September 30, 2011, primarily due to a decrease in net losses from major catastrophes. Net losses from major catastrophes were $6.4 million and $122.7 million for the three months ended September 30, 2012 and 2011, respectively. Net losses from major catastrophes for the three months ended September 30, 2012 were primarily attributable to Hurricane Isaac and Property Claims Services ("PCS") Catastrophe 83, a U.S. multi-day straight line wind and thunderstorm event. Net losses from major catastrophes were partially offset by a reduction in first and second quarter 2012 major catastrophe loss estimates. Underwriting losses on our 2012 underwriting year North American crop business resulting from the severe drought conditions in the United States were $17.6 million for the three months ended September 30, 2012. Net losses from major catastrophes for the three months ended September 30, 2011 were attributable to Hurricane Irene and increases in first and second quarter 2011 major catastrophe loss estimates.

Net favorable development was $20.9 million and $12.9 million for the three months ended September 30, 2012 and 2011, respectively.

Excluding net losses from major catastrophes and net favorable development, Property and Marine segment underwriting income was impacted by changes in the mix of business resulting in an increase in the combined ratio. The combined ratio was also impacted by a decrease in non-major catastrophe losses as compared with the same period in 2011.

Net Premiums Written and Earned

The Property and Marine segment generated 44.4% and 57.4% of our net premiums written for the three months ended September 30, 2012 and 2011, respectively. Gross premiums written decreased by $37.0 million for the three months ended September 30, 2012 as compared with the three months ended September 30, 2011, and decreased by $32.4 million when excluding reinstatement premiums written related to major catastrophes of $2.3 million and $6.9 million for the three months ended September 30, 2012 and 2011, respectively. The decrease in gross premiums written, excluding reinstatement premiums, was primarily due to decreases in the catastrophe excess-of-loss classes and resulted from fewer opportunities that met our underwriting standards and our desire to reduce our exposure to catastrophe events. Net premiums earned decreased by $23.3 million for the three months ended September 30, 2012 as compared with the same period in 2011, primarily as a result of decreases in net premiums written in current and prior periods. Net premiums written and earned were also impacted by changes in the mix of business and the structure of the underlying reinsurance contracts.

Net Losses and LAE

Net losses and LAE decreased by $130.2 million for the three months ended September 30, 2012 as compared with the three months ended September 30, 2011. The decrease in net losses and LAE was primarily due to a decrease in net losses from major catastrophes of $120.7 million, a decrease in non-major catastrophe losses and an increase in net favorable loss development, partially offset by underwriting losses on our 2012 underwriting year North American crop business resulting from the severe drought conditions in the United States. The following table sets forth the components of pre-tax net losses by major catastrophe for the three months ended September 30, 2012 ($ in thousands):

                                                                                            Net Losses from
                                                     Net Losses        Reinstatement             Major
                Major Catastrophe                      and LAE        Premiums Earned        Catastrophes
PCS Catastrophe 83                                   $    (6,736 )   $           1,107     $          (5,629 )
Hurricane Isaac                                           (3,101 )                 324                (2,777 )
Decrease in First and Second Quarter 2012
Catastrophe Estimates:
PCS Catastrophes 66 and 67                                 1,096                   398                 1,494
PCS Catastrophe 74                                            81                   427                   508
Total                                                $    (8,660 )   $           2,256     $          (6,404 )

The following table sets forth the components of pre-tax net losses by major catastrophe for the three months ended September 30, 2011 ($ in thousands):

                                                                                           Net Losses from
                                                     Net Losses        Reinstatement            Major
                Major Catastrophe                      and LAE        Premiums Earned        Catastrophes
Hurricane Irene                                      $   (15,154 )   $             561     $        (14,593 )
Increase in First and Second Quarter 2011
Catastrophe Estimates:
Japan earthquake                                         (34,045 )                (101 )            (34,146 )
June New Zealand earthquake                              (27,183 )                   -              (27,183 )
February New Zealand earthquake                          (30,659 )               3,792              (26,867 )
U.S. tornadoes                                           (15,326 )               2,640              (12,686 )
Denmark floods                                            (6,700 )                   -               (6,700 )
Cyclone Yasi                                                 126                  (609 )               (483 )
Australian floods                                           (378 )                 373                   (5 )
Total                                                $  (129,319 )   $           6,656     $       (122,663 )

Net losses from major catastrophes, with related premium adjustments, increased the net loss and LAE ratio by 12.9 points and 148.9 points for the three months ended September 30, 2012 and 2011, respectively.

Underwriting losses on our 2012 underwriting year North American crop business resulting from the severe drought conditions in the United States were $17.6 million for the three months ended September 30, 2012 compared with no underwriting income or loss on our 2011 underwriting year North American crop business for the three months ended September 30, 2011.

Net favorable loss development was $20.8 million and $13.9 million for the three months ended September 30, 2012 and 2011, respectively. Net favorable loss development and related premium adjustments decreased the net loss and LAE ratio by 33.1 points and 15.2 points for the three months ended September 30, 2012 and 2011, respectively. Net favorable loss development for the three months ended September 30, 2012 and 2011 was primarily attributable to a level of cumulative losses reported by our ceding companies that was lower than expected and that, in our judgment, resulted in sufficient credibility in the loss experience to change our previously selected loss ratios.

The following table sets forth the net favorable (unfavorable) development for the three months ended September 30, 2012 by class of business ($ in thousands):

                                                Net Losses      Net Acquisition
              Class of Business                   and LAE           Expense           Net Premiums       Net Development
Major catastrophes                              $    11,281     $            (13 )   $         (648 )   $          10,620
Catastrophe excess-of-loss (non-major events)         5,122                  287                105                 5,514
Property per risk excess-of-loss                      1,878                   18                391                 2,287
Marine, aviation and satellite                        2,334                  107               (224 )               2,217
Other                                                   198                   49                  -                   247
Total                                           $    20,813     $            448     $         (376 )   $          20,885

Net favorable development in the major catastrophes class arose primarily from the 2011 earthquake in Japan. Net favorable development in the catastrophe excess-of-loss (non-major events) class arose primarily from international business in the 2011 underwriting year. Net favorable development in the property per risk excess-of-loss class arose primarily from the North American business on the 2007 underwriting year. Net favorable development in the marine, aviation and satellite class arose from most prior underwriting years with a change in loss development patterns contributing $0.8 million to the net favorable development.

The following table sets forth the net favorable (unfavorable) development for the three months ended September 30, 2011 by class of business ($ in thousands):

                                                Net Losses      Net Acquisition
              Class of Business                   and LAE           Expense          Net Premiums       Net Development
Property per risk excess-of-loss                $     5,466     $            36     $         (130 )   $           5,372
Catastrophe excess-of-loss (non-major events)         3,221                 (55 )              124                 3,290
Major catastrophes                                    1,905                  (2 )              (28 )               1,875
Marine, aviation and satellite                        2,034                (316 )             (470 )               1,248
Property proportional                                 1,208                (129 )                -                 1,079
Other                                                   106                 (44 )                -                    62
Total                                           $    13,940     $          (510 )   $         (504 )   $          12,926

Net favorable development in the property per risk excess-of-loss class arose primarily from the 2009 and 2010 underwriting years. Net favorable development in the catastrophe excess-of-loss (non-major events) class arose primarily from international business in the 2010 underwriting year. Net favorable development in the major catastrophes class arose primarily from events that occurred in 2009 and 2010, partially offset by unfavorable development from 2005 events. Net favorable development in the marine, aviation and satellite class arose primarily from the marine classes from most prior underwriting years. Net favorable development in the property proportional class arose primarily from international business in the 2008 through 2010 underwriting years, and included a change in the pattern of expected reported losses of $0.5 million.

Net Acquisition Expenses

Net acquisition expenses and related net acquisition expense ratios were $7.1 million and 11.4%, respectively, for the three months ended September 30, 2012 and $12.1 million and 14.2%, respectively, for the three months ended September 30, 2011. The decrease in net acquisition expenses was primarily due to the decrease in net premiums earned as compared with the same period in 2011. Net acquisition expenses and related net acquisition expense ratios were also impacted by changes in the mix of business.

Other Underwriting Expenses

Other underwriting expenses were $7.7 million and $6.7 million for the three months ended September 30, 2012 and 2011, respectively. The increase was primarily the result of an increase in compensation accruals due to the Company's stronger return on equity in 2012 versus 2011.

Casualty

The following table summarizes underwriting results and ratios for the Casualty
segment for the three months ended September 30, 2012 and 2011 ($ in thousands):

                                                       Three Months Ended September 30,
                                                                                                 Increase
                                                          2012                  2011            (decrease)
Net premiums written                                 $        72,358       $        72,689     $        (331 )
Net premiums earned                                           70,326                78,021            (7,695 )
Net losses and LAE                                            14,358                42,704           (28,346 )
Net acquisition expenses                                      16,710                16,780               (70 )
Other underwriting expenses                                    5,662                 4,300             1,362
Casualty segment underwriting income                 $        33,596       $        14,237     $      19,359

Underwriting ratios:
Net loss and LAE                                                20.4 %                54.7 %   (34.3) points
Net acquisition expense                                         23.8 %                21.5 %      2.3 points
Other underwriting expense                                       8.1 %                 5.5 %      2.6 points
Combined                                                        52.3 %                81.7 %   (29.4) points

The Casualty segment underwriting income increased by $19.4 million for the three months ended September 30, 2012 as compared with the three months ended September 30, 2011, as a result of an increase in net favorable development. Net favorable development was $40.3 million and $15.0 million for the three months ended September 30, 2012 and 2011, respectively.

Excluding net favorable development, Casualty segment underwriting income was impacted by changes in the mix of business. The combined ratio was also impacted by an increase in the financial lines combined ratio as compared with the same . . .