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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from
____________ to ____________

Commission file number: 0-27662

IPC Holdings, Ltd.

(Exact name of registrant as specified in its charter)


|                                |  |                    
|------------------------------- |  | -------------------
|Bermuda                         |  | Not Applicable     
|                                |  |                    
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

American International Building, 29 Richmond Road, Pembroke, HM 08, Bermuda




(Address of principal executive offices)


(441) 298-5100




(Registrants telephone number,


including area code)


Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Shares, par value $0.01 per share

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]No [  ]

Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes [X]No [  ]

The aggregate market value of the Registrants Common Shares held by
non-affiliates of the Registrant as of June 30, 2003, was
$1,214,498,306 based on the
last reported sale price of Common Shares on the Nasdaq National Market system
on that date.

The number of the Registrants Common Shares, par value U.S. $0.01 per share,
as of February 27, 2004, was 48,245,395.



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DOCUMENTS INCORPORATED BY REFERENCE

1.     Portions of the Registrants 2003 Annual Report to Shareholders to be mailed
to shareholders on or about April 27th, 2004 are incorporated by reference into
Part II of this Form 10-K. With the exception of the portions of the Annual
Report specifically incorporated herein by reference, the Annual Report is not
deemed to be filed as part of this Form 10-K.

2.     Portions of the Registrants definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the Exchange Act), relating to
the Registrants Annual Meeting of Shareholders scheduled to be
held June 11,
2004 are incorporated by reference into Part III of this Form 10-K. With the
exception of the portions of the Proxy Statement specifically incorporated
herein by reference, the Proxy Statement is not deemed to be filed as part of
this Form 10-K.

1



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|                                               |                                                                                               |  |  |  |  |  |  | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                        
|                                               | Item 1. Business                                                                             
|                                               | Item 2. Properties                                                                           
|                                               | Item 3. Legal Proceedings                                                                    
|                                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                       
|                                               | Item 5. Market for the Registrants Common Stock and Related Shareholder Matters             
|                                               | Item 6. Selected Financial Data                                                              
|                                               | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                               | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|                                               | Item 8. Financial Statements and Supplementary Data                                          
|                                               | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|                                               | Item 9A. Controls and Procedures                                                             
|PART III                                      
|                                               | Item 10. Directors and Executive Officers                                                    
|                                               | Item 11. Executive Compensation                                                              
|                                               | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                               | Item 13. Certain Relationships and Related Transactions                                      
|                                               | Item 14. Principal Accounting Fees and Services                                              
|PART IV                                       
|                                               | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SIGNATURES                                    
|EXHIBIT INDEX                                 
|STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
|PORTIONS OF THE ANNUAL REPORT                 
|SUBSIDIARIES                                  
|CONSENT OF KPMG                               
|CERTIFICATION OF CEO                          
|CERTIFICATION OF CFO                          
|CERTIFICATION OF CEO                          
|CERTIFICATION OF CFO                          



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IPC HOLDINGS, LTD.

TABLE OF CONTENTS

|     |  |                                                                                       |  |        |    |      |  | 
|---- |  | ------------------------------------------------------------------------------------- |  | ------ | -- | ---- |  | 
|     |  |                                                                                       |  |        |    | Page
|Item |  |                                                                                       |  | Number
|     |  |                                                                                       |  |       
|     |  | PART I                                                                                |  |        |    |     
|1.   |  | Business                                                                              |  |        | 2  |     
|2.   |  | Properties                                                                            |  |        | 21 |     
|3.   |  | Legal Proceedings                                                                     |  |        | 21 |     
|4.   |  | Submission of Matters to a Vote of Security Holders                                   |  |        | 21 |     
|     |  | PART II                                                                               |  |        |    |     
|5.   |  | Market for the Registrant's Common Stock and Related Shareholder Matters              |  |        | 22 |     
|6.   |  | Selected Financial Data                                                               |  |        | 24 |     
|7.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  |        | 25 |     
|7A.  |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |        | 25 |     
|8.   |  | Financial Statements and Supplementary Data                                           |  |        | 25 |     
|9.   |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  |        | 25 |     
|9A.  |  | Controls and Procedures                                                               |  |        | 25 |     
|     |  | PART III                                                                              |  |        |    |     
|10.  |  | Directors and Executive Officers                                                      |  |        | 26 |     
|11.  |  | Executive Compensation                                                                |  |        | 26 |     
|12.  |  | Security Ownership of Certain Beneficial Owners and Management                        |  |        | 26 |     
|13.  |  | Certain Relationships and Related Transactions                                        |  |        | 26 |     
|14.  |  | Principal Accounting Fees and Services                                                |  |        | 26 |     
|     |  | PART IV                                                                               |  |        |    |     
|15.  |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  |        | 27 |     





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PART I

Special Note Regarding Forward-Looking Information

This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking statements
are statements other than historical information or statements of current
condition, including but not limited to expectations regarding market cycles,
renewals and our ability to increase written premium volume and improve profit
margins, market conditions, the impact of current market conditions and trends
on future periods, the impact of our business strategy on our results, trends
in pricing and claims and the insurance and reinsurance market response to
catastrophic events. Some forward-looking statements may be identified by our
use of terms such as believes, anticipates, intends, or expects and
relate to our plans and objectives for future operations. In light of the
risks and uncertainties inherent in all forward-looking statements, the
inclusion of such statements in this report should not be considered as a
representation by us or any other person that our objectives or plans will be
achieved. We do not intend, and are under no obligation, to update any
forward-looking statement contained in this report. The largest single factor
in our results has been and will continue to be the severity or frequency of
catastrophic events, which is inherently unpredictable. Numerous factors could
cause our actual results to differ materially from those in the forward-looking
statements, including, but not limited to, the following: (i) the occurrence
of natural or man-made catastrophic events with a frequency or severity
exceeding our estimates; (ii) any lowering or loss of one of the financial
ratings of IPC Holdings wholly owned subsidiary, IPCRe Limited (IPCRe and
together with the Company, IPCRe Europe (as defined herein) and IPCRe
Underwriting Services (as defined herein), we or IPC); (iii) a decrease in
the level of demand for property catastrophe reinsurance, or increased
competition owing to increased capacity of property catastrophe reinsurers;
(iv) the effect of competition on market trends and pricing; (v) the adequacy
of our loss reserves; (vi) loss of our non-admitted status in United States
jurisdictions or the passage of federal or state legislation subjecting us to
supervision or regulation in the United States; (vii) challenges by insurance
regulators in the United States to our claim of exemption from insurance
regulation under current laws; (viii) a contention by the United States
Internal Revenue Service that we are engaged in the conduct of a trade or
business within the U.S.; (ix) loss of services of any one of our executive
officers; (x) changes in interest rates and/or equity values in the United
States of America and elsewhere; or (xi) changes in exchange rates and greater
than expected currency exposure.




Item 1.Business

General Development of the Business

Overview.We provide property catastrophe reinsurance and, to a limited
extent, property-per-risk excess, aviation (including satellite) and other
short-tail reinsurance on a worldwide basis. During 2003, approximately 84% of
our gross premiums written covered property catastrophe risks. Property
catastrophe reinsurance covers unpredictable events such as hurricanes,
windstorms, hailstorms, earthquakes, volcanic eruptions, fires, industrial
explosions, freezes, riots, floods and other man-made or natural disasters.
The substantial majority of the reinsurance written by IPCRe has been, and
continues to be, written on an excess of loss basis for primary insurers rather
than reinsurers, and is subject to aggregate limits on exposure to losses.
During 2003, we had approximately 351 clients, including many of the leading
insurance companies around the world. Approximately 44% of our clients in 2003
were based in the United States, and approximately 42% of gross premiums
written during 2003 related primarily to U.S. risks. Our non-U.S. clients and
covered risks are located principally in Europe, Japan, Australia and New
Zealand. During 2003, no single ceding insurer accounted for more than 5.1% of
our gross premiums written. At December 31, 2003, IPC Holdings had total
shareholders equity of $1,569 million and total assets of $1,769 million.

In response to a severe imbalance between the global supply of and demand
for property catastrophe reinsurance that developed in the period from 1989
through 1993, IPC Holdings and IPCRe were formed and commenced operations in
June 1993 through the sponsorship of American International Group, Inc.
(AIG), a holding company incorporated in Delaware which, through its
subsidiaries, is primarily engaged in a broad range of insurance and
insurance-related activities and financial services in the United States and
abroad. AIG purchased 24.4% of IPC Holdings initial share capital and an
option (which was exercised on December 12, 2001) to obtain up to an additional
10% (on a fully diluted basis, excluding employee stock options) of our share
capital (the AIG Option). Since our formation, subsidiaries of AIG have
provided administrative, investment management and custodial services to us,
and the Chairman of the Boards of Directors of IPC Holdings, IPCRe and IPCRe
Underwriting Services Limited (IPCUSL) is also a director and officer of
various subsidiaries and affiliates of AIG. See Item 13. Certain Relationships
and Related Transactions. For a discussion of the





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limitation of voting rights of any 10% or more beneficial owner of Common
Shares (including AIG) to less than 10% of total voting rights, see Amendment
No. 2 to the Companys Registration Statement on
Form 8-A, dated July 9, 2003.

On March 13, 1996, IPC Holdings completed an initial public offering in
which 13,521,739 of the 25,000,000 Common shares outstanding, were sold by
existing shareholders. IPC Holdings Common Shares are included for trading on
the Nasdaq National Market under the ticker symbol IPCR.

On September 10, 1998, IPCRe incorporated a subsidiary in Ireland, named
IPCRe Europe Limited. Effective October 1, 1998, IPCRe Europe commenced
underwriting selected reinsurance business, primarily in Europe. Currently,
IPCRe Europe retrocedes 90% of the business it underwrites to IPCRe. IPCRe
Services Limited, a subsidiary of IPC Holdings, Ltd., was established in the
United Kingdom on June 27, 1997, from where European marketing efforts were
conducted on behalf of IPCRe and IPCRe Europe. IPCRe Services ceased
operations in January, 2000, and was dissolved on December 11, 2001.

On November 7, 2001, IPC Holdings incorporated a subsidiary in Bermuda,
IPCUSL, which is licensed as an Underwriting Agent and currently acts for
Allied World Assurance Company Ltd, a Bermuda-based Class 4 insurer (see Item
13. Certain Relationships and Related Transactions, and Note 9 to the
Consolidated Financial Statements - Related Party Transactions).

On December 12, 2001, we completed a follow-on public offering in which
17,480,000 ordinary shares were sold (including the exercise of the
over-allotment option of 2,280,000 shares) at $26.00 per share. Concurrent
with the offering, we sold 2,847,000 shares in a private placement to AIG at a
price equal to the public offering price. Furthermore, AIG exercised the AIG
Option, which had been granted at the time of the Companys formation, whereby
they acquired 2,775,000 shares at an exercise price of $12.7746 per share.
Total net proceeds raised from these transactions were approximately $546
million. AIG presently owns 11,722,000 shares, or 24.3% of
outstanding shares. AIG has informed us that they presently intend to continue their
share ownership in the Company for the foreseeable future.

Internet Address:Our Internet address is www.ipcre.bmand the investor
relations section of our web site is located at
www.ipcre.bm/sections/financial-info/frms_quarterlies.html. We make available
free of charge, on or through the investor relations section of our web site,
annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as
reasonably practicable after we electronically file such material with, or
furnish it to, the Securities and Exchange Commission.

Recent Industry and Legislative Developments

From 1996 to 1999, there was an increase in the supply of reinsurance
capacity, which caused downward pressure on pricing. In 1996, 1997, 2000, 2002
and 2003 few major catastrophic events occurred. Consequently, few claims were
made on IPCRe. In contrast thereto, many catastrophic events occurred in 1998,
1999 and 2001 in many parts of the world, including Hurricane Georges in 1998
(estimated industry-wide insured losses in excess of $4 billion), a hailstorm
which struck Sydney, Australia in April, 1999 (estimated industry losses of
$1.6 billion), Hurricane Floyd (estimated industry losses of $2.2 billion), and
cyclones Anatol, Lothar and Martin that struck several parts of Europe in
December, 1999 (estimated industry losses in excess of $9 billion). In June
2001, Tropical Storm Allison affected parts of Texas (estimated industry losses
of $2.5 billion) and on September 11, 2001, terrorist attacks were carried out
in the U.S. (estimated industry losses of $30 billion to $70 billion). The
property catastrophe reinsurance market began experiencing improvements in
rates, terms and conditions in the fourth quarter of 2000. The improvements in
rates, terms and conditions continued throughout 2001 and were accelerated by
the terrorist attacks of September 11. Property catastrophe reinsurance
premiums have often risen in the aftermath of significant catastrophic losses.
As claims are reserved, industry surplus is depleted and the industrys
capacity to write new business diminishes. During the fourth quarter of 2001,
in response to the reduction in the capacity and anticipated increased demand,
many companies, including ourselves, raised additional capital. There were
also a number of new insurance and reinsurance companies formed in Bermuda and
elsewhere, hoping to satisfy demand and benefit from improved market terms and
conditions. We believe that market trends similar to those that have occurred
in past cycles are developing in the current environment.

With respect to terms and conditions other than pricing, for 2002 and 2003
renewals the coverage of claims that are the result of terrorist acts was
generally excluded from property catastrophe reinsurance contracts covering
large commercial risks, but not excluded for personal lines or other coverages
except where caused by nuclear, biological or chemical means. During 2002 and
2003, IPCRe participated in a number of underwriting pools which cover property
losses arising from terrorist acts as a separate hazard.





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On November 26, 2002, the Terrorism Risk Insurance Act of 2002 (TRIA)
was signed into law. TRIA, which does not apply to reinsurance companies such
as IPCRe, establishes a temporary federal program which requires U.S. and other
insurers to offer coverage in their commercial property and casualty policies
for losses resulting from terrorists acts committed by foreign persons or
interests in the United States or with respect to specified U.S. air carriers,
vessels or missions abroad. The coverage offered may not differ materially
from the terms, amounts and other coverage limitations applicable to other
policy coverages.
Generally, insurers will pay all losses resulting from a covered terrorist
act to policyholders, retaining a defined deductible and 10% of losses above
the deductible. The federal government will reimburse insurers for 90% of
losses above the deductible and, under certain circumstances, the federal
government will require insurers to levy surcharges on policyholders to recoup
for the federal government its reimbursements paid.

As a result of TRIA, our participation in coverage for terrorism within
the United States declined during 2003. We have continued to exclude losses
resulting from terrorist acts, as defined in this legislation, from U.S.
property catastrophe contracts covering large commercial risks incepting
January 1, 2004.

Business Strategy

Our principal strategy is to provide property catastrophe excess of loss
reinsurance programs to a geographically diverse, worldwide clientele of
primary insurers with whom we maintain long-term relationships. Under excess
of loss contracts, we begin paying losses when our customers claims from a
particular catastrophic event exceed a specified amount (known as an attachment
point), and our maximum liability is capped at an amount specified in our
reinsurance contracts. To a lesser extent, we also seek to provide these
clients with other excess of loss short-tail reinsurance products. On a
limited basis, we provide similar reinsurance programs and products to
reinsurers. We periodically consider underwriting additional lines of
property/casualty coverage, including on a non-excess of loss basis, provided
losses can be limited in a manner comparable to that described below.

The primary elements of our strategy include:

Disciplined Risk Management.We seek to limit and diversify our loss
exposure through six principal mechanisms: (i) writing substantially all of our
premiums on an excess of loss basis, which limits our ultimate exposure per
contract and permits us to determine and monitor our aggregate loss exposure;
(ii) adhering to maximum limitations on reinsurance accepted in defined
geographical zones; (iii) limiting program size for each client in order to
achieve diversity within and across geographical zones; (iv) administering risk
management controls appropriately weighted with our modeling techniques, as
well as our assessment of qualitative factors (such as the quality of the
cedents management and capital and risk management strategy); (v) utilizing a
range of attachment points for any given program in order to balance the risks
assumed with the premiums written; and (vi) prudent underwriting of each
program written. Historically, we have declined to renew existing business if
the terms were unfavorable or if the exposure would violate any of these
limitations. We utilize a minimal amount of retrocessional protection.
Therefore, we retain most of the risk in the reinsurance contracts we write and
pay relatively little in retrocession premiums.

Capital-Based Exposure Limits.Each year, we establish maximum
limitations on reinsurance accepted in defined geographic zones on the basis
of, and as a proportion of, shareholders equity.

Client Selection and Profile.We believe that establishing long-term
relationships with insurers who have sound capital and risk management
strategies is key to creating long-term value for our shareholders. We have
successfully attracted customers that are generally sophisticated,
long-established insurers who desire the assurance not only that claims will be
paid, but that reinsurance will continue to be available after claims have been
paid. We believe our financial stability, ratings from Standard & Poors (S &
P) and A.M. Best Company (A.M. Best) and growth of capital are essential for
creating and maintaining these long-term relationships.

Capital Management and Shareholder Returns.We manage our capital
relative to our risk exposure in an effort to maximize sustainable long-term
growth in shareholder value, while recognizing that catastrophic losses will
adversely impact short-term financial results from time to time. We seek
growth of IPCs capital to protect it from major catastrophes, to ensure
ongoing customer relationships and to support premium growth opportunities.

Disciplined Investment Management.In light of the risks of our
underwriting business, our primary investment strategy is capital preservation.
Current investment guidelines permit investments in equities up to a maximum
of 20% of the total portfolio, and our fixed maturity investments are
substantially limited to the top three investment grades or the equivalent





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thereof, at the time of purchase. At December 31, 2003 our equity investments
consisted of three managed funds: an institutional index fund, which tracks the
investment returns of the S & P 500 Index, an American equity fund and a global
equity fund. The last two funds are managed by a subsidiary of AIG. The
investment in such equities represented 19.1% of the total fair value of our
investment portfolio on December 31, 2003. On that date, 82.9% of our fixed
maturity investments consisted of cash and cash equivalents, U.S. Treasuries or
other government agency issues and investments with an AAA or AA rating.

Business

General.We provide treaty reinsurance principally to insurers of
personal and commercial property worldwide. Treaty reinsurance is reinsurance
of a specified type or category of risk defined in a contract. As described
below, we write most reinsurance on an excess of loss basis. Our property
catastrophe reinsurance coverages, which accounted for 84% of our gross
premiums written during 2003, are generally all-risk in nature, subject to
various policy exclusions. Our predominant exposure under such coverages is to
property damage from unpredictable events such as hurricanes, windstorms,
hailstorms, earthquakes and volcanic eruptions, although we are also exposed to
losses from sources as diverse as freezes, riots, floods, industrial
explosions, fires, and other man-made or natural disasters. The balance of
premiums written are derived from aviation (including satellite),
property-per-risk excess of loss and other short-tail reinsurance. In
accordance with market practice, our property catastrophe reinsurance coverage
generally excludes certain risks such as war, pollution, nuclear contamination
and radiation. During 2002 and 2003, IPCRe participated in a number of
underwriting pools which cover property losses arising from terrorist acts as a
separate hazard.

Because we underwrite property catastrophe reinsurance and have large
aggregate exposures to natural and man-made disasters, our loss experience
generally has included and will continue to include infrequent events of great
severity. Consequently, the occurrence of losses from catastrophic events has
caused and is likely to continue to cause our financial results to be volatile.
In addition, because catastrophes are an inherent risk of our business, a
major event or series of events, such as occurred during 1998, 1999 and 2001,
can be expected to occur from time to time. In the future, such events could
have a material adverse effect on our financial condition or results of
operations, possibly to the extent of eliminating our shareholders equity.
Increases in the values and concentrations of insured property and the effects
of inflation have resulted in increased severity of industry losses in recent
years, and we expect that those factors will increase the severity of
catastrophe losses per year in the future.

We currently seek to limit our loss exposure principally by offering most
of our products on an excess of loss basis, adhering to maximum limitations on
reinsurance accepted in defined geographic zones, limiting program size for
each client and prudent underwriting of each program written. In addition, our
policies contain limitations and exclusions from coverage and choice of forum.
There can be no assurance that our efforts to limit exposure by using the
foregoing methods will be successful. In addition, geographic zone limitations
involve significant underwriting judgments, including the determination of the
area of the zones and the inclusion of a particular policy within a zones
limits. Underwriting is inherently a matter of judgment, involving important
assumptions about matters that are unpredictable and beyond our control, and
for which historical experience and probability analysis may not provide
sufficient guidance.

Excess of Loss Reinsurance Contracts.Our policy is to write
substantially all of our business on an excess of loss basis. Such contracts
provide a defined limit of liability, permitting us to quantify our aggregate
maximum loss exposure. By contrast, maximum liability under pro rata contracts
is more difficult to quantify precisely. Quantification of loss exposure is
fundamental to our ability to manage our loss exposure through geographical
zone limits and the program limits described below. Excess of loss contracts
also help us to control our underwriting results by increasing our flexibility
to determine premiums for reinsurance at specific retention levels, based upon
our own underwriting assumptions, and independent of the premiums charged by
primary insurers. In addition, because primary insurers typically retain a
larger loss exposure under excess of loss contracts, they have a greater
incentive to underwrite risks and adjust losses in a prudent manner.

In addition, we diversify our risk by, to a limited extent, writing other
short-tail coverages, including risk excess of loss, aviation (including
satellite), and other lines, including marine, a quota share of workers
compensation catastrophe excess, and kidnap and ransom and related exposures.
These lines diversify risk (although they may involve some catastrophe
exposure) and thus reduce the volatility in results of operations caused by
catastrophes.

The following table sets out our gross premiums written and number of
contracts written by type of reinsurance.





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|                            |       |                |                         |         |          |           |            |         |          |         |          |                |    |         |          |         |            |           |      |       |   |                |       |       |        |   |            |         |  |  |      |       |   |  |       |       | 
|--------------------------- | ----- | -------------- | ----------------------- | ------- | -------- | --------- | ---------- | ------- | -------- | ------- | -------- | -------------- | -- | ------- | -------- | ------- | ---------- | --------- | ---- | ----- | - | -------------- | ----- | ----- | ------ | - | ---------- | ------- |  |  | ---- | ----- | - |  | ----- | ----- | 
|                            |       |                | Year ended December 31,
|                            |       |                |                        
|                            |       |                | 2003                    |         | 2002     |           | 2001      
|                            |       |                |                         |         |          |           |           
|                            |       |                |                         |         |          |           | Percentage |         |          |         |          |                |    |         |          |         | Percentage |           |      |       |   |                |       |       |        |   | Percentage |         |  |  |     
|                            |       |                |                         |         |          |           | of         |         | Number   |         |          |                |    |         | of       |         | Number     |           |      |       |   |                | of    |       | Number
|                            |       |                | Premiums                |         | Premiums |           | of         |         | Premiums |         | Premiums |                | of |         | Premiums |         | Premiums   |           | of  
|Type of Reinsurance Assumed |       | Written        |                         | Written |          | Contracts |            | Written |          | Written |          | Contracts      |    | Written |          | Written |            | Contracts
|                            |       |                |                         |         |          |           |            |         |          |         |          |                |    |         |          |         |            |          
|                            |       | (in thousands) |                         |         |          |           |            |         |          |         |          | (in thousands) |    |         |          |         |            |           |      |       |   | (in thousands) |       |       |        |   |            |         |  | 
|Catastrophe excess of
Loss  |       | $              | 272,507                 |         |          |           | 84.4       | %       |          |         | 1,859    |                |    | $       | 208,930  |         |            |           | 80.4 | %     |   |                | 1,550 |       |        | $ | 117,293    |         |  |  | 88.2 | %     |   |  | 1,564 |      
|Risk excess of
Loss         |       |                | 10,341                  |         |          |           | 3.2        | %       |          |         | 89       |                |    |         | 10,547   |         |            |           | 4.1  | %     |   |                | 76    |       |        |   | 3,220      |         |  |  | 2.4  | %     |   |  | 106   |      
|Retrocessional
reinsurance  |       |                | 16,956                  |         |          |           | 5.3        | %       |          |         | 85       |                |    |         | 15,578   |         |            |           | 6.0  | %     |   |                | 87    |       |        |   | 6,310      |         |  |  | 4.7  | %     |   |  | 71    |      
|Aviation (1)                |       |                | 10,621                  |         |          |           | 3.3        | %       |          |         | 43       |                |    |         | 9,304    |         |            |           | 3.6  | %     |   |                | 34    |       |        |   | 5,924      |         |  |  | 4.4  | %     |   |  | 28    |      
|Other                       |       |                | 12,337                  |         |          |           | 3.8        | %       |          |         | 94       |                |    |         | 15,326   |         |            |           | 5.9  | %     |   |                | 83    |       |        |   | 310        |         |  |  | 0.3  | %     |   |  | 94    |      
|                            |       |                |                         |         |          |           |            |         |          |         |          |                |    |         |          |         |            |           |      |       |   |                |       |       |        |   |            |         |  |  |      |       |   |  |       |      
|                            | Total |                | $                       | 322,762 |          |           |            | 100.0   | %        |         |          | 2,170          |    |         | $        | 259,685 |            |           |      | 100.0 | % |                |       | 1,830 |        |   | $          | 133,057 |  |  |      | 100.0 | % |  |       | 1,863 | 
|                            |       |                |                         |         |          |           |            |         |          |         |          |                |    |         |          |         |            |           |      |       |   |                |       |       |        |   |            |         |  |  |      |       |   |  |       |      



|(1) |  | For the 2003 and 2002 underwriting years, aviation included three
aviation contracts and two satellite contracts, written on a pro rata
basis rather than excess of loss. For the 2001 underwriting year,
aviation included three aviation contracts and two satellite contracts,
written on a pro rata basis. The majority of other aviation contracts
were written on an excess of loss basis.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Catastrophe Excess of Loss Reinsurance.Catastrophe excess of loss
reinsurance provides coverage to a primary insurer when aggregate claims and
claim expenses from a single occurrence of a peril, covered under a portfolio
of primary insurance contracts written by the primary insurer, exceed the
attachment point specified in the reinsurance contract with the primary
insurer. The primary insurer can then recover up to the limit of reinsurance
it has elected to buy for each layer. Once a layer is breached by collection
of claims, the primary insurer generally buys replacement coverage for the
liability used, i.e., a reinstatement, for an additional premium. Most of our
policies are limited to losses occurring during the policy term.

Risk Excess of Loss Reinsurance.To a lesser extent, we also write risk
excess of loss property reinsurance. This reinsurance responds to a loss of
the reinsured in excess of its retention level on a single risk, rather than
to aggregate losses for all covered risks, as does catastrophe reinsurance. A
risk in this context might mean the insurance coverage on one building or a
group of buildings or the insurance coverage under a single policy which the
reinsured treats as a single risk. Most of the risk excess treaties in which
we participate contain a relatively low loss-per-event limit on our liability.

Retrocessional Reinsurance.We also selectively provide reinsurance cover
to other reinsurance companies, which is known as retrocessional protection.
Demand for, and terms and conditions, including pricing of, this type of
business can vary quite significantly from year to year. Accordingly, the
premium volume that we write of this type of business will fluctuate year to
year. Most of the underlying risks retroceded arise from property catastrophe
excess of loss contracts.

Aviation Reinsurance.We also write a small amount of short-tail aviation
reinsurance on proportional and excess of loss bases. Although they primarily
involve property damage, certain aviation risks may involve casualty coverage
arising from the same event causing the property damage. In 2003, the majority
of this business was written in three pro rata aviation contracts, where the
underlying insurance is written on an excess of loss basis, and two pro rata
satellite contracts.

Other Lines of Business.Other lines include a pro rata participation in
a number of pools which underwrite terrorism as a separate risk; a quota share
of workers compensation catastrophe excess; a quota share of kidnap and ransom
and related exposures; excess of loss and a quota share of medical expense
coverage, some marine excess of loss contracts and some miscellaneous property
covers, on an excess of loss basis.

Policy Features.Historically, our policies have been written for a
one-year period, and generally without experience-based adjustments. During
the period 1997 to 1999, the trend in the industry was towards multi-year
policies. In particular, some of the insureds renewing policies in 1999
specifically requested longer periods, in part to address concerns regarding
Y2K risks. A proportion of our policies in 1999 were for terms of fifteen to
eighteen months. However, commencing in the second quarter of 1999, we
declined renewals and submissions of new business which were on a multi-year
basis, because of the general inadequacy of market pricing. In addition,
during the same period, the industry offered a variety of experienced-based
incentives such as no claims bonuses and profit commissions. A proportion of
our policies included some or all of these incentives, but we have generally
declined to accept such terms during the past three years. Because of the
improvements in terms and conditions that have taken place, we will consider
writing business on a multi-year basis treaty by treaty.

Underwriting Services.Beginning on December 1, 2001, we commenced
providing underwriting services to a multi-line insurance and reinsurance
company in which AIG owns a 23.4% ownership interest. (See Item 13. Certain
Relationships and Related Transactions, and Note 9 to the Consolidated
Financial Statements - Related Party Transactions.)





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Geographic Diversification

Since inception, we have sought to diversify our exposure across
geographic zones around the world in order to obtain the optimum spread of
risk. We divide our markets into geographic zones and limit coverage we are
willing to provide for any risk located in a particular zone, so as to limit
our net aggregate loss exposure from all contracts covering risks believed to
be located in that zone, to a predetermined level.

The predetermined levels are established annually on the basis of, and as
a proportion of, shareholders equity. If a proposed reinsurance program would
cause the limit then in effect to be exceeded, the program would be declined,
regardless of its desirability, unless we utilize retrocessional coverage
(i.e., IPC purchasing reinsurance, such as our proportional reinsurance
facilities discussed in Retrocessional Reinsurance Purchased below), thereby
reducing the net aggregate exposure to the maximum limit permitted, or less.
If we were to suffer a net financial loss in any fiscal year, thus reducing
shareholders equity, the limits per zone would be reduced in the next year,
with the possible effect that we would thereafter reduce existing business in a
zone exceeding such limit.

Currently, we have divided the United States into 8 geographic zones and
our other markets, including Europe and Japan, into a total of 18 zones. We
designate as zones geographic areas which, based on historic catastrophe loss
experience reflecting actual catastrophe events and property development
patterns, we believe are most likely to absorb a large percentage of losses
from one catastrophic event. These zones are determined using computer
modeling techniques and underwriting assessments. The zones may vary in size,
level of population density and commercial development in a particular area.
The zones with the greatest exposure written are in the United States, in
particular the Atlantic and North-Central regions, and northern Europe. The
parameters of these geographic zones are subject to periodic review and change.

We recognize that events may affect more than one zone, and to the extent
we have accepted reinsurance from a ceding insurer with a loss exposure in more
than one zone, we will consider such potential loss in testing its limits in
all such affected zones. For example, the program for a U.S. national carrier
typically will be subject to limits in each U.S. zone. A program with
worldwide exposure will also be subject to limits in U.S. zones or other zones
around the world, as applicable. This results in very substantial
double-counting of exposures in determining utilization of an aggregate
within a given zone. Consequently, the total sum insured will be less than the
sums of utilized aggregates for all of the zones.





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The following table sets out gross premiums written, number of written
contracts and the percentage of our premiums allocated to the zones of coverage
exposure.

|                                   |  |                         |         |          |  |            |       |          |  |          |       |                |  |          |         |            |  |           |       |   |  |                |       |  |  |            |         |  |  |  |       |   |  |  |       | 
|---------------------------------- |  | ----------------------- | ------- | -------- |  | ---------- | ----- | -------- |  | -------- | ----- | -------------- |  | -------- | ------- | ---------- |  | --------- | ----- | - |  | -------------- | ----- |  |  | ---------- | ------- |  |  |  | ----- | - |  |  | ----- | 
|                                   |  | Year ended December 31,
|                                   |  |                        
|                                   |  | 2003                    |         | 2002     |  | 2001      
|                                   |  |                         |         |          |  |           
|                                   |  |                         |         |          |  | Percentage |       |          |  |          |       |                |  |          |         | Percentage |  |           |       |   |  |                |       |  |  | Percentage |         |  |  | 
|                                   |  |                         |         |          |  | of         |       |          |  |          |       |                |  |          |         | of         |  |           |       |   |  |                |       |  |  | of         |         |  |  | 
|                                   |  | Premiums                |         | Premiums |  | Number of  |       | Premiums |  | Premiums |       | Number of      |  | Premiums |         | Premiums   |  | Number of
|Geographic Area (1)                |  | Written                 |         | Written  |  | Contracts  |       | Written  |  | Written  |       | Contracts      |  | Written  |         | Written    |  | Contracts
|                                   |  |                         |         |          |  |            |       |          |  |          |       |                |  |          |         |            |  |          
|                                   |  | (in thousands)          |         |          |  |            |       |          |  |          |       | (in thousands) |  |          |         |            |  |           |       |   |  | (in thousands) |       |  |  |            |         |  |  | 
|United States                      |  | $                       | 136,319 |          |  |            | 42.2  | %        |  |          | 922   |                |  | $        | 117,904 |            |  |           | 45.4  | % |  |                | 707   |  |  | $          | 57,971  |  |  |  | 43.6  | % |  |  | 729   | 
|Worldwide (2)                      |  |                         | 54,491  |          |  |            | 16.9  | %        |  |          | 210   |                |  |          | 36,804  |            |  |           | 14.2  | % |  |                | 206   |  |  |            | 22,165  |  |  |  | 16.7  | % |  |  | 184   | 
|Worldwide (excluding the
U.S.) (3) |  |                         | 15,747  |          |  |            | 4.9   | %        |  |          | 78    |                |  |          | 16,312  |            |  |           | 6.3   | % |  |                | 71    |  |  |            | 5,758   |  |  |  | 4.3   | % |  |  | 114   | 
|Europe (including the U.K.)        |  |                         | 87,594  |          |  |            | 27.2  | %        |  |          | 629   |                |  |          | 62,861  |            |  |           | 24.2  | % |  |                | 506   |  |  |            | 26,435  |  |  |  | 19.9  | % |  |  | 412   | 
|Japan                              |  |                         | 15,597  |          |  |            | 4.8   | %        |  |          | 99    |                |  |          | 15,432  |            |  |           | 5.9   | % |  |                | 79    |  |  |            | 7,383   |  |  |  | 5.5   | % |  |  | 68    | 
|Australia and New Zealand          |  |                         | 10,276  |          |  |            | 3.2   | %        |  |          | 98    |                |  |          | 6,102   |            |  |           | 2.4   | % |  |                | 82    |  |  |            | 5,701   |  |  |  | 4.3   | % |  |  | 120   | 
|Other                              |  |                         | 2,738   |          |  |            | 0.8   | %        |  |          | 134   |                |  |          | 4,270   |            |  |           | 1.6   | % |  |                | 179   |  |  |            | 7,644   |  |  |  | 5.7   | % |  |  | 236   | 
|                                   |  |                         |         |          |  |            |       |          |  |          |       |                |  |          |         |            |  |           |       |   |  |                |       |  |  |            |         |  |  |  |       |   |  |  |       | 
|Total                              |  | $                       | 322,762 |          |  |            | 100.0 | %        |  |          | 2,170 |                |  | $        | 259,685 |            |  |           | 100.0 | % |  |                | 1,830 |  |  | $          | 133,057 |  |  |  | 100.0 | % |  |  | 1,863 | 
|                                   |  |                         |         |          |  |            |       |          |  |          |       |                |  |          |         |            |  |           |       |   |  |                |       |  |  |            |         |  |  |  |       |   |  |  |       | 



|Notes: | (1) |  | Except as otherwise noted, each of these categories includes contracts that cover risks primarily
located in the designated geographic area.
|------ | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|      
|       | (2) |  | Includes contracts that cover risks primarily in two or more
geographic zones,including the United States.                                  
|      
|       | (3) |  | Includes contracts that cover risks primarily in two or more
geographic zones, excluding the United States.                                 

The following table sets out our gross aggregate in-force liability
allocated to various zones of coverage exposure at January 1, 2004, 2003 and
2002. Our aggregate limits will be reduced to the extent that business is
ceded to our reinsurance facilities (see Retrocessional Reinsurance Purchased
below).

|                                   |               |                                            |         |                |           |                |         |                |         |  |         |         |         | 
|---------------------------------- | ------------- | ------------------------------------------ | ------- | -------------- | --------- | -------------- | ------- | -------------- | ------- |  | ------- | ------- | ------- | 
|Geographic Area                    |               | Aggregate Limit of Liability at January 1,
|                                   |               |                                           
|                                   |               |                                            |         | 2004           |           | 2003           |         | 2002          
|                                   |               |                                            |         |                |           |                |         |               
|                                   |               |                                            |         | (in thousands) |           | (in thousands) |         | (in thousands)
|United States                      |               |                                            |         |                |           |                |         |                |         |  |         |        
|                                   | New England   |                                            | $       | 977,208        |           |                | $       | 742,061        |         |  | $       | 593,260 |        
|                                   | Atlantic      |                                            |         | 1,034,551      |           |                |         | 776,912        |         |  |         | 633,586 |        
|                                   | Gulf          |                                            |         | 978,042        |           |                |         | 740,047        |         |  |         | 580,236 |        
|                                   | North Central |                                            |         | 980,491        |           |                |         | 766,722        |         |  |         | 602,012 |        
|                                   | Mid West      |                                            |         | 963,394        |           |                |         | 734,521        |         |  |         | 593,876 |        
|                                   | West          |                                            |         | 956,375        |           |                |         | 735,521        |         |  |         | 576,904 |        
|                                   | Alaska        |                                            |         | 591,250        |           |                |         | 420,620        |         |  |         | 267,878 |        
|                                   | Hawaii        |                                            |         | 545,847        |           |                |         | 388,733        |         |  |         | 263,584 |        
|                                   |               | Total United States (1)                    |         |                | 1,218,265 |                |         |                | 928,784 |  |         |         | 723,677 | 
|Canada                             |               |                                            | 169,402 |                |           |                | 127,134 |                |         |  | 78,510  |        
|Worldwide
(2)                      |               |                                            | 212,433 |                |           |                | 150,172 |                |         |  | 67,488  |        
|Worldwide (excluding the U.S.) (3) |               |                                            | 80,139  |                |           |                | 119,852 |                |         |  | 91,052  |        
|Northern Europe                    |               |                                            | 934,122 |                |           |                | 667,887 |                |         |  | 508,037 |        
|Japan                              |               |                                            | 227,655 |                |           |                | 182,008 |                |         |  | 124,071 |        
|Australia and New Zealand          |               |                                            | 233,080 |                |           |                | 60,683  |                |         |  | 86,122  |        
|Other                              |               |                                            | 126,140 |                |           |                | 162,457 |                |         |  | 131,664 |        



|Notes: | (1) |  | The United States in aggregate is not a zone. The degree of
double-counting in the 8 U.S. zones is illustrated by the relation of
the aggregate in-force limit of liability for the United States compared
to the individual limits of liability in the 8 zones.
|------ | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      





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| | (2) |  | Includes contracts that cover risks primarily in two or more
geographic zones, including the United States.
| | --- |  | -----------------------------------------------------------------------------------------------------------
|
| | (3) |  | Includes contracts that cover risks primarily in two or more
geographic zones, excluding the United States.

The effectiveness of geographic zone limits in managing risk exposure
depends on the degree to which an actual event is confined to the zone in
question and on our ability to determine the actual location of the risks
believed to be covered under a particular reinsurance program. Accordingly,
there can be no assurance that risk exposure in any particular zone will not
exceed that zones limits.

With respect to U.S. exposures, we use the computer-based systems
described below as one tool in estimating the aggregate losses that could occur
under all our contracts covering U.S. risks as a result of a range of potential
catastrophic events. By evaluating the effects of various potential events, we
monitor whether the risks that could be accepted within a zone are appropriate
in light of other risks already affecting such zone and, in addition, whether
the level of our zone limits is acceptable.

Underwriting and Program Limits

In addition to geographic zones, we seek to limit our overall exposure to
risk by pursuing a disciplined underwriting strategy which limits the amount of
reinsurance we will supply in accordance with a particular program or contract,
so as to achieve diversification within and across geographical zones.
Commencing January 2004, the maximum exposure was generally limited to $60
million per program and to $10 million per contract. In 2002 and 2003, program
limits and contract limits were $50 million and $10 million, respectively.
Under the authority of the Chief Executive Officer, we have exceeded these
limits in a small number of instances. We also attempt to distribute our
exposure across a range of attachment points i.e., the amount of claims that
have to be borne by the ceding insurer before our reinsurance coverage applies.
Attachment points vary and are based upon our assessment of the ceding
insurers market share of property perils in any given geographic zone to which
the contract relates, as well as the capital needs of the ceding insurer.

Prior to reviewing any program proposal, we consider the appropriateness
of the cedent, including the quality of its management and its capital and risk
management strategy. In addition, we require that each proposed reinsurance
program received includes information on the nature of the perils to be
included and detailed aggregate information as to the location or locations of
the risks covered under the catastrophe contract. Additional information would
also include the cedents loss history for the perils being reinsured, together
with relevant underwriting considerations which would impact exposures to
catastrophe reinsurers. We first evaluate exposures on new programs in light
of the overall zone limits in any given catastrophe zone, together with program
limits and contract limits, to ensure a balanced and disciplined underwriting
approach. If the program meets all these initial underwriting criteria, we
then evaluate the proposal in terms of its risk/reward profile to assess the
adequacy of the proposed pricing and its potential impact on our overall return
on capital. Once a program meets our requirements for underwriting and
pricing, the program would then be authorized for acceptance.

We extensively use sophisticated modeling and other technology in our
underwriting techniques. Each authorized line is registered on the GENIUS
reinsurance data system we use for both underwriting and aggregate control
purposes. This system enables both management and underwriters to have on-line
information regarding both individual exposures and zonal aggregate
concentrations. Submissions are recorded to determine and monitor their status
as being pending, authorized, or bound.

In addition to the reinsurance data system, we use computer modeling to
measure and estimate loss exposure under both simulated and actual loss
scenarios and in comparing exposure portfolios to both single and multiple
events. Since 1993, we have contracted AIR Worldwide Corporation for the use
of their proprietary models, currently CATRADER ®, as part of our modeling
approach. These computer-based loss modeling systems utilize A.M. Bests data
and direct exposure information obtained from our clients, to assess each
clients catastrophe management approach and adequacy of their programs
protection. Modeling is part of our underwriting criteria for catastrophe
exposure pricing. The majority of our client base also use one or more of the
various modeling consulting firms in their exposure management analysis, upon
which their catastrophe reinsurance buying is based. In addition, we sometimes
perform or contract for additional modeling analysis when reviewing our major
commitments. The combination of reinsurance system information, together with
CATRADER ® modeling, enables us to monitor and control our acceptance of
exposure on a global basis.

Generally, the proposed terms of coverage, including the premium rate and
retention level for excess of loss contracts, are set by the lead reinsurer and
agreed to by the client and broker. On placements requiring large market
capacity, typically the broker strives to achieve a consensus of proposed terms
with many participating underwriters to





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ensure placement. On both U.S. and non-U.S. business, we act in many
cases as a lead or consensus lead reinsurer. When not the lead, we sometimes
actively negotiate additional terms or conditions. If we elect to authorize a
participation, the underwriter will specify the percentage or monetary
participation in each layer, and will execute a slip to be followed by a
contract to formalize coverage.

We have a procedure for underwriting control to ensure that all
acceptances are made in accordance with our underwriting policy and aggregate
control. Each underwriting individual is given an underwriting authority,
limits above which must be submitted for approval to the Chief Executive
Officer. All new acceptances are reviewed by senior underwriting personnel.

Generally, 60% (by volume) of premiums (excluding reinstatement premiums)
we write each year are for contracts which have effective dates in the first
quarter, about 20% in the second quarter and about 15% in the third quarter.
Premiums are generally due in installments, either quarterly or semi-annually,
over the contract term, with each installment usually received within 30 days
after the due date.

Retrocessional Reinsurance Purchased

Effective January 1, 1999, we arranged a proportional reinsurance facility
covering property catastrophe business written by IPCRe. The facility provides
coverage of up to $50 million in each of at least 5 named zones, and
potentially other zones of our choosing, provided that the risks in those zones
do not accumulate with those in the named zones. The United States and the
Caribbean are excluded zones. The named zones are the United Kingdom; Europe
(excluding the U.K.); Australia / New Zealand; Japan and Canada. Business
ceded to the facility is solely at our discretion. Within these limitations,
we may designate the treaties to be included in the facility, subject to IPCRe
retaining at least 50% of the risk. The premium ceded is pro rata, less
brokerage, taxes and an override commission. AIG, as a participating
reinsurer, has a 10% participation on a direct basis. Most reinsurers
participating in the facility have financial strength ratings issued by S & P
and/or A.M. Best of A or above, and the minimum rating is A- at the time of
acceptance. This facility was subsequently renewed annually on the same terms
and the bound participation has been 92.0%, 61.5%, 37.0%, 60.5% and 74.5% for
2000, 2001, 2002, 2003 and 2004 respectively. IPCRe co-participates on the
balance.

Effective January 1, 2002 we arranged a Property Catastrophe Excess of
Loss reinsurance facility in respect of certain property business written by
IPCRe. This facility covers first losses only for the business ceded to this
facility and all subsequent events are retained by IPCRe. Business ceded to
this facility includes worldwide business excluding the United States and
Canada. The reinsurer participating in the facility in 2002 had a financial
strength rating of A+. IPCRe originally ceded $15 million ultimate net loss in
the aggregate per contract year to the facility. IPCRes retention is $10
thousand in the aggregate. This facility was renewed at January 1, 2003 and
2004 with a different reinsurer, whose rating is AA-. Under the terms of the
treaty for 2003, coverage was $30 million excess of $10 thousand in the
aggregate, and for 2004 this has been increased to $50 million excess of $10
thousand in the aggregate.

Marketing

Our customers generally are sophisticated, long-established insurers who
understand the risks involved and who desire the assurance not only that claims
will be paid but that reinsurance will continue to be available after claims
are paid. Catastrophic losses can be expected to affect financial results
adversely from time to time, and we believe that financial stability, ratings
and growth of capital (as well as service and innovation) are essential for
creating long-term relationships with clients, and that such relationships are
key to creating long-term value for the Company and our shareholders. During
2003, no single ceding insurer accounted for more than 5.1% of our gross
premiums written.

We market our reinsurance products worldwide through non-exclusive
relationships with more than 50 of the leading reinsurance brokers active in
the U.S. and non-U.S. markets for property catastrophe reinsurance. In
addition, from 1993 to January 2000 our products were marketed in Europe
through IPCRe Services. As noted above, IPCRe Services ceased operations in
January 2000, because consolidation among our clients and brokers has reduced
the need to maintain a physical presence in the U.K. in order to promote our
services.

Based on premiums written during the year ended December 31, 2003, the
five broker groups from which we derived the largest portions of our business
in 2003 (with the approximate percentage of our business derived from such
group) are Marsh & McLennan Companies, Inc. (35.5%), Aon Corp. and affiliates
(26.1%), Willis Group (12.7%), Benfield Group (12.1%), and Towers Perrin
(1.7%). For the years ended December 31, 2002 and 2001, respectively, the
approximate percentages were: Marsh  34.8% and 41.8%; Aon  27.0% and 17.8%;
Willis  12.8% and 11.0%; Benfield  9.6% and 10.9%; Towers Perrin  1.9%
(2002); Herbert Clough - 3.7% (2001). During the year ended December 31, 2003,
we had in force reinsurance contracts with only eight ceding companies which
were not derived





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from a reinsurance broker; otherwise, our products are marketed
exclusively through brokers. All brokerage transactions are entered into on an
arms-length basis.

Our brokers perform data collection, contract preparation and other
administrative tasks, enabling us to market our reinsurance products cost
effectively by maintaining a small staff. By relying largely on reinsurance
brokers to market our products, we are able to avoid the expense and regulatory
complications of worldwide offices, thereby minimizing fixed costs associated
with marketing activities. We believe that by maintaining close relationships
with brokers, we are able to obtain access to a broad range of potential
reinsureds. We meet frequently in Bermuda and elsewhere outside the United
States with brokers and senior representatives of clients and prospective
clients. All contract submissions are approved in IPCRes executive offices in
Bermuda, and we do not believe that conducting our operations in Bermuda has
adversely affected our marketing activities in light of the client base we have
attracted and retained.

Reserves for Losses and Loss Adjustment Expenses

Under generally accepted accounting principles in the United States of
America, we are not permitted to establish loss reserves until the occurrence
of an event which may give rise to a claim. Once such an event occurs, we
establish reserves based upon estimates of losses incurred by the ceding
insurers as a result of the event and our estimate of the portion of such loss
we have reinsured. With respect to our pro rata business, we establish loss
reserves as determined by a historical loss development pattern. Only loss
reserves applicable to losses incurred up to the reporting date may be set
aside, with no allowance for the provision of a contingency reserve to account
for expected future losses. Claims arising from future catastrophic events can
be expected to require the establishment of substantial reserves from time to
time. Our reserves are adjusted as we receive notices of claims and proofs of
loss from reinsureds and as estimates of severity of damages and our share of
the total loss are revised.

We establish additional reserves where we believe that the ultimate loss
amount is greater than that reported to us by the ceding company. These
reserves, which provide for development on reported losses, are also known as
Reported but not Enough (RBNE) reserves. We also establish reserves for
losses incurred as a result of an event known but not reported to us. These
Incurred but not Reported (IBNR) reserves, together with RBNE reserves, are
established for both catastrophe and other losses. To estimate the portion of
loss and loss adjustment expenses relating to these claims for the year, we
review our portfolio of business to determine where the potential for loss may
exist. Industry loss data, as well as actual experience, knowledge of the
business written by us and general market trends in the reinsurance industry,
are considered. We may also use CATRADER ® to measure and estimate loss
exposure under the actual event scenario, if available. The sum of the
individual estimates derived from the above methodology provides us with an
overall estimate of the loss reserve for the company as a whole. We have
contracted a leading worldwide independent firm of actuaries to conduct a
review of reserves on a semi-annual basis.

Loss reserves represent our estimates, at a given point in time, of the
ultimate settlement and administration costs of claims incurred, and it is
possible that the ultimate liability may exceed or be less than such estimates.
Such estimates are not precise in that, among other things, they are based on
predictions of future developments and estimates of future trends in claim
severity and frequency and other variable factors such as inflation and
currency exchange rates. During the claim settlement period, it often becomes
necessary to refine and adjust the estimates of liability on a claim either
upward or downward, and any such adjustment would affect our results of
operations in the period when the adjustment is determined. Even after such
adjustments, ultimate liability may materially exceed or be less than the
revised estimates. In contrast to casualty losses, which frequently can be
determined only through lengthy, unpredictable litigation, property losses tend
to be reported promptly and settled within a shorter period of time.

See also
Managements Discussion and Analysis - Critical Accounting
Policies contained in the Annual Report.

Investments

General.Our current investment strategy is defined primarily by the need
to safeguard our capital, since we believe that the risks inherent in
catastrophe reinsurance should not be augmented by a speculative investment
policy. For this reason our investment policy is conservative with a strong
emphasis on the quality and liquidity of investments. At December 31, 2003,
other than cash, our investments consisted of fixed maturity securities, only
one of which had a rating of less than A, and investments in three equity
mutual funds. Corporate bonds represented 49% of total fixed maturity
investments at December 31, 2003, and of these 43% were issued by U.S.
corporations and 57% by non-U.S. corporations. Our investment policy also
stresses diversification and at December 31, 2003 we had 69 different issuers
in the portfolio with only four issuers (Federal National Mortgage Association,
Federal Home Loan Mortgage Corp., Federal Home Loan Bank and Republic of Italy)
that individually represented more than 5% of our portfolio.





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##### Table of Contents



Guidelines are also set which limit permitted issuers, the amount of
non-U.S. dollar denominated securities and the target duration of the
portfolio.

The following table summarizes the fair value of our investments and cash
and cash equivalents as of December 31, 2003 and 2002:

|                                    |                                         |              |                |         |      |   |           |         | 
|----------------------------------- | --------------------------------------- | ------------ | -------------- | ------- | ---- | - | --------- | ------- | 
|Type of Investment                  |                                         | December 31,
|                                    |                                         |             
|                                    |                                         |              | 2003           |         | 2002
|                                    |                                         |              |                |         |     
|                                    |                                         |              | (in thousands)
|Fixed Maturities available for sale |                                         |              |                |         |      |   |           |        
|                                    | U.S. Government and government agencies |              | $              | 311,626 |      |   | $         | 106,507 | 
|                                    | Other governments                       |              |                | 260,719 |      |   |           | 179,472 | 
|                                    | Corporate                               |              |                | 612,098 |      |   |           | 772,893 | 
|                                    | Supranational entities                  |              |                | 76,024  |      |   |           | 94,737  | 
|                                    |                                         |              |                |         |      |   |           |        
|                                    |                                         |              | 1,260,467      |         |      |   | 1,153,609 |        
|Equities, available for sale        |                                         |              | 319,007        |         |      |   | 216,897   |        
|Cash and cash equivalents           |                                         |              | 91,949         |         |      |   | 16,656    |        
|                                    |                                         |              |                |         |      |   |           |        
|                                    |                                         | $            | 1,671,423      |         |      | $ | 1,387,162 |        
|                                    |                                         |              |                |         |      |   |           |        

We regularly monitor the difference between the cost and fair value of our
investments, which involves uncertainty as to whether declines in value are
temporary in nature. If we believe a decline in value of a particular
investment is temporary, we record the decline as an unrealized loss as a
separate component of our shareholders equity. If we believe the decline is
other-than-temporary, we write down the cost basis of the investment to the
market price as of the reporting date and record a realized loss in our
statement of income. The determination that a security has incurred an
other-than-temporary decline in value requires the judgement of IPCs
management, which includes the views of our investment managers and a regular
review of our investments. Our assessment of a decline in value includes our
current judgement as to the financial position and future prospects of the
entity that issued the security. If that judgement changes in the future we
may ultimately record a realized loss, after having originally concluded that
the decline in value was temporary.

Generally, we review all securities that are trading at a significant
discount to par, amortized cost (if lower) or cost for an extended period of
time. We generally focus our attention on all securities whose market value is
less than 75% of their cost. The specific factors we consider in evaluating
potential impairment include the following:



| |  |  | The extent of decline in value                                                                           
| | - |  | ---------------------------------------------------------------------------------------------------------
|
| |  |  | The length of time the security is below cost                                                            
|
| |  |  | The future prospects of the issuer, or in the case of mutual funds, the future prospects of the fund     
|
| |  |  | Whether the decline appears to be related to general
market or industry conditions, or is issuer-specific
|
| |  |  | Our intent and ability to hold the security                                                              
|
| |  |  | Other qualitative and quantitative factors                                                               

Our investment guidelines are reviewed periodically and are subject to
change at the discretion of the Board of Directors.

Maturity and Duration of Portfolio.Currently, we maintain a target
modified duration for the portfolio of between 1.25 years and 3.75 years as
being appropriate for the type of business being conducted, although actual
maturities of individual securities vary from less than one year to a maximum
of eight years for fixed maturity securities and ten years for money-market
securities. At December 31, 2003 the fixed maturity portfolio (including cash
and cash equivalents within such portfolio) had an average maturity of 2.8
years and an average modified duration of 2.6 years. We believe that, given
the relatively high quality of our portfolio, adequate market liquidity exists
to meet our cash demands.

The following table summarizes the fair value by maturities of our fixed
maturity investment portfolio as of December 31, 2003 and 2002. For this
purpose, maturities reflect contractual rights to put or call the securities;
actual maturities may be longer.





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##### Table of Contents



|                                       |  |                |           |      |  |   |           | 
|-------------------------------------- |  | -------------- | --------- | ---- |  | - | --------- | 
|                                       |  | December 31,  
|                                       |  |               
|                                       |  | 2003           |           | 2002
|                                       |  |                |           |     
|                                       |  | (in thousands)
|Due in one year or less                |  | $              | 91,731    |      |  | $ | 99,914    | 
|Due after one year through five years  |  |                | 1,143,842 |      |  |   | 883,323   | 
|Due after five years through ten years |  |                | 24,894    |      |  |   | 170,372   | 
|                                       |  |                |           |      |  |   |           | 
|                                       |  | $              | 1,260,467 |      |  | $ | 1,153,609 | 
|                                       |  |                |           |      |  |   |           | 

Quality of Debt Securities in Portfolio.Our investment guidelines
stipulate that a majority of the securities be AAA and AA rated, although a
select number of lesser rated issues is permitted. The primary rating source
is Moodys Investors Service Inc. (Moodys). When no Moodys rating is
available, S & P ratings are used and where split-ratings exist, the higher of
Moodys and S & P is used.

The following table summarizes the composition of the fair value of all
cash and fixed maturity investments by rating:

|                                        |  |              |       |      |  |  |       |  
|--------------------------------------- |  | ------------ | ----- | ---- |  |  | ----- | -
|                                        |  | December 31,
|                                        |  |             
|                                        |  | 2003         |       | 2002
|                                        |  |              |       |     
|Cash and cash equivalents               |  |              | 6.8   | %    |  |  | 1.4   | %
|U.S. Government and government agencies |  |              | 23.1  | %    |  |  | 9.1   | %
|AAA                                     |  |              | 26.6  | %    |  |  | 30.8  | %
|AA                                      |  |              | 26.4  | %    |  |  | 33.9  | %
|A                                       |  |              | 16.6  | %    |  |  | 24.8  | %
|BBB                                     |  |              | 0.5   | %    |  |  | 0.0   | %
|                                        |  |              |       |      |  |  |       |  
|                                        |  |              | 100.0 | %    |  |  | 100.0 | %
|                                        |  |              |       |      |  |  |       |  

There are no delinquent securities in our investment portfolio.

Equities.Our investments in equities comprise holdings of units in
three mutual funds. The AIG Global Equity fund is incorporated in Ireland,
managed by AIG/Sun America and invests predominantly in large capitalized
companies operating in diverse sectors of global equity markets. The AIG
American Equity Trust fund is also incorporated in Ireland, managed by AIG/Sun
America and invests predominantly in large capitalized companies operating in
diverse sectors of North America. The third fund is the Vanguard
Institutional Index fund, a U.S.-based fund which seeks to replicate the
performance of the S & P 500 Index.

Hedge Fund.On January 2, 2004, we invested $75.0 million in a mutual
fund, AIG Select Hedge Fund, a limited company incorporated in the Cayman
Islands, which invests in a number, typically 20 to 25, of hedge funds managed
by unrelated parties, with a variety of investment strategies. The purpose of
this investment is to provide additional diversification of our portfolio as a
whole, and to potentially improve overall yield.

Real Estate.Our portfolio does not contain any investments in real
estate or mortgage loans.

Foreign Currency Exposure.At December 31, 2003 and 2002, all of our
fixed maturity investments were in securities denominated in U.S. dollars. We
also have an Australian dollar time deposit in the amount of approximately
U.S. $1.9 million (equivalent). The investment guidelines permit up to 20% of
the portfolio to be invested in non-U.S. dollar securities. However, from
inception, such investments have been made infrequently and for the purpose of
improving overall portfolio yield. When we do hold non-U.S. dollar
denominated securities, we have entered and may enter into forward foreign
exchange contracts for purposes of hedging our non-U.S. dollar denominated
investment portfolio. In addition, in the event that loss payments must be
made in currencies other than the U.S. dollar, in some cases we will match the
liability with assets denominated in the same currency, thus mitigating the
effect of exchange rate movements on the balance sheet. To date, this
strategy has been used on three occasions. See also Managements Discussion
and Analysis - Quantitative and Qualitative Disclosure about Market Risk,
contained in the Annual Report.

Derivatives.Our investment policy guidelines provide that financial
futures and options and foreign exchange contracts may not be used in a
speculative manner but may be used, subject to certain numerical limits, as
part of a defensive strategy to protect the market value of the portfolio. No
investments were made in derivative instruments during 2003, and there were no
open positions at December 31, 2003.

Investment Advisory and Custodial Services.Investment advisory and
custodial services are provided to us by subsidiaries of AIG. See Item 13.
Certain Relationships and Related Transactions.





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##### Table of Contents



Competition

The property catastrophe reinsurance industry is highly competitive. We
compete, and will continue to compete, with insurers and property catastrophe
reinsurers worldwide, many of which have greater financial, marketing and
management resources than we do. Some of our competitors are large financial
institutions who have reinsurance divisions, while others are specialty
reinsurance companies. In total, there are several hundred companies writing
reinsurance of different types, including property catastrophe. Our main
competition in the industry comes from multi-line insurance and reinsurance
providers that write catastrophe-based products as part of a larger portfolio.
Our major competitors include companies based in the U.S., Europe and
Bermuda. Though all of these companies offer property catastrophe
reinsurance, in many cases it accounts for a small percentage of their total
portfolio. During the fourth quarter of 2001, in response to a reduction in
market capacity and perceived increase in demand, a number of new insurance
and reinsurance companies were formed in Bermuda and elsewhere, most of which
write property catastrophe reinsurance. Also, several of our existing
competitors have raised additional capital, or have announced plans to do so.
In addition, there may be established companies or new companies of which we
are not aware that may be planning to enter the property catastrophe
reinsurance market or existing reinsurers that may be planning to commit
capital to this market. Competition in the types of reinsurance business that
we underwrite is based on many factors, including premium charges and other
terms and conditions offered, services provided, ratings assigned by
independent rating agencies, speed of claims payment, claims experience,
perceived financial strength, the length of relationships with clients and
brokers, and experience and reputation of the reinsurer in the line of
reinsurance to be written. Many of the reinsurers who have entered the
Bermuda-based and other reinsurance markets have or could have more capital
than us. The full effect of this additional capital on the reinsurance market
may not be known for some time. No assurance can be given as to what impact
this additional capital will ultimately have on terms or conditions of the
reinsurance contracts of the types written by us.

In September 1996, IPCRe was rated by A.M. Best, who gave it an initial
rating of A+ (Superior). This rating was affirmed by A.M. Best in all
subsequent years. In July, 1997 S & P assigned financial strength and
counter-party credit ratings of A+ (Strong), which were also affirmed in all
subsequent years. During 1999, these ratings were extended to IPCRe Europe.
The rating received from A.M. Best represents the second highest rating on
their rating scale. The rating received from S & P represents the fifth
highest rating on their rating scale. Such ratings are based on factors of
concern to cedents and brokers and are not directed toward the protection of
investors. Such ratings are neither a rating of securities nor a
recommendation to buy, hold or sell such securities. While we believe that
IPCRes current ratings are of benefit, some of our principal competitors have
a rating equal to or greater than that of IPCRe. Insurance ratings are one
factor used by brokers and cedents in the United States as a means of
assessing the financial strength and quality of reinsurers. In addition, a
cedents own rating may be adversely affected by the rating of its
reinsurer(s). IPCRe is not licensed or admitted as an insurer in any
jurisdiction in the United States and, consequently, must generally post
letters of credit or other security to cover outstanding claims of, or
unearned premiums with respect to, ceding insurers in the United States to
enable such insurers to obtain favorable regulatory capital treatment of their
reinsurance. See Managements Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources, contained in the
Annual Report.

In addition, over the last few years capital markets participants,
including exchanges and financial intermediaries, have developed financial
products such as risk securitizations, intended to compete with traditional
reinsurance, the usage of which has grown in volume. Further, the tax policy
of the countries in which our clients operate can affect the demand for
reinsurance. We are also aware of many potential initiatives by capital market
participants to produce additional alternative products that may compete with
the existing catastrophe reinsurance markets. We are unable to predict the
extent to which the foregoing new, proposed or potential initiatives may affect
the demand for our products or the risks which may be available for us to
consider underwriting.

Employees

As of January 1, 2004, we employed 15 people on a full-time basis
including our Chief Executive Officer, Chief Financial Officer and four
underwriters. We believe that employee relations are good. None of our
employees are subject to collective bargaining agreements, and we know of no
current efforts to implement such agreements at IPC.

Some of our employees, including several of our senior management, are
employed pursuant to work permits granted by the Bermuda authorities. These
permits expire at various times over the next several years. We have no
reason to believe that these permits would not be extended upon request at
their respective expirations. However, regulations enacted by the Minister
of Labour and Home Affairs in Bermuda have imposed limitations on the number
of times permits for non-key employees are renewed, to a maximum of six years.





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##### Table of Contents



Subsidiaries

IPCRe is a wholly-owned subsidiary of IPC Holdings. It was formed as a
Bermuda company in June, 1993.

On September 10, 1998, IPCRe incorporated a subsidiary in Ireland named
IPCRe Europe Limited. Effective October 1, 1998, IPCRe Europe commenced
underwriting selected reinsurance business primarily in Europe. Currently,
IPCRe Europe retrocedes 90% of the business it underwrites to IPCRe.

On November 7, 2002, IPC Holdings incorporated IPCUSL, a new subsidiary in
Bermuda. IPCUSL is registered in Bermuda as a licensed insurance agent.

Regulation

Bermuda - The Insurance Act of 1978, as amended, and Related Regulations (the
Insurance Act).

As a holding company, IPC Holdings is not subject to Bermuda insurance
regulations. The Insurance Act, which regulates the insurance business of
IPCRe, provides that no person shall carry on any insurance business in or
from within Bermuda unless registered as an insurer under the Insurance Act by
the Bermuda Monetary Authority (the Authority), which is responsible for the
day-to-day supervision of insurers. Under the Insurance Act, insurance
business includes reinsurance business. The Authority, in deciding whether to
grant registration, has broad discretion to act as the Authority thinks fit in
the public interest. The Authority is required by the Insurance Act to
determine whether the applicant is a fit and proper body to be engaged in the
insurance business and, in particular, whether it has, or has available to it,
adequate knowledge and expertise to operate an insurance business. The
registration of an applicant as an insurer is subject to it complying with the
terms of its registration and such other conditions as the Authority may
impose at any time.

An Insurance Advisory Committee appointed by the Bermuda Minister of
Finance advises the Authority on matters connected with the discharge of the
Authoritys functions and sub-committees thereof supervise and review the law
and practice of insurance in Bermuda, including reviews of accounting and
administrative procedures.

The Insurance Act imposes on Bermuda insurance companies solvency and
liquidity standards and auditing and reporting requirements and grants to the
Authority powers to supervise, investigate, requiring information and the
production of documents and intervene in the affairs of insurance companies.
Certain significant aspects of the Bermuda insurance regulatory framework are
set forth below.

Classification of Insurers. The Insurance Act distinguishes between
insurers carrying on long-term business and insurers carrying on general
business. There are four classifications of insurers carrying on general
business, with Class 4 insurers subject to the strictest regulation. IPCRe is
registered as a Class 4 insurer, and is regulated as such under the Insurance
Act.

Cancellation of Insurers Registration. An insurers registration may be
cancelled by the Authority on certain grounds specified in the Insurance Act,
including failure of the insurer to comply with its obligations under the
Insurance Act or, if in the opinion of the Authority, the insurer has not been
carrying on business in accordance with sound insurance principles.

Principal Representative. An insurer is required to maintain a principal
office in Bermuda and to appoint and maintain a principal representative in
Bermuda. For the purpose of the Insurance Act, the principal office of IPCRe
is at our executive offices in Pembroke, Bermuda, and IPCRes principal
representative is our President and Chief Executive Officer. Without a reason
acceptable to the Authority, an insurer may not terminate the appointment of
its principal representative, and the principal representative may not cease to
act as such, unless 30 days notice in writing to the Authority is given of the
intention to do so. It is the duty of the principal representative, within 30
days of reaching the view that there is a likelihood of the insurer becoming
insolvent or that a reportable event has, to the principal representatives
knowledge, occurred or is believed to have occurred, to make a report in
writing to the Authority setting out all the particulars of the case that are
available to the principal representative. Examples of such a reportable
event include failure by the insurer to comply substantially with a condition
imposed upon the insurer by the Authority relating to a solvency margin or a
liquidity or other ratio.

Independent Approved Auditor. Every registered insurer must appoint an
independent auditor who will annually audit and report on the Statutory
Financial Statements and the Statutory Financial Return of the insurer, both of
which, in the case of IPCRe, are required to be filed annually with the
Authority. The independent auditor of IPCRe must be approved by the Authority
and may be the same person or firm which audits IPCRes financial statements
for presentation to its shareholders.





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##### Table of Contents



Loss Reserve Specialist. As a registered Class 4 insurer, IPCRe is
required to submit an opinion of its approved loss reserve specialist with its
Statutory Financial Return in respect of its loss and loss expense provisions.
The loss reserve specialist, who will normally be a qualified property and
casualty actuary, must be approved by the Authority.

Statutory Financial Statements. IPCRe must prepare annual Statutory
Financial Statements. The Insurance Act prescribes rules for the preparation
and substance of such Statutory Financial Statements (which include, in
statutory form, a balance sheet, an income statement, a statement of capital
and surplus and notes thereto). IPCRe is required to give information and
analyses regarding premiums, claims, reinsurance and investments. The
Statutory Financial Statements are not prepared in accordance with generally
accepted accounting principles in the United States of America and are distinct
from the financial statements prepared for presentation to IPCRes shareholder
under the Companies Act 1981 of Bermuda (the Companies Act), which financial
statements are prepared in accordance with generally accepted accounting
principles in the United States of America. IPCRe, as a general business
insurer, is required to submit the annual Statutory Financial Statements as
part of the annual Statutory Financial Return. The Statutory Financial
Statements and the Statutory Financial Return do not form part of the public
records maintained by the Authority.

Annual Statutory Financial Return. IPCRe is required to file with the
Authority a Statutory Financial Return no later than four months after its
financial year end (unless specifically extended upon application to the
Authority). The Statutory Financial Return for a Class 4 insurer includes,
among other matters, a report of the approved independent auditor on the
Statutory Financial Statements of such insurer, solvency certificates, the
Statutory Financial Statements themselves, the opinion of the loss reserve
specialist and a schedule of reinsurance ceded. The solvency certificates must
be signed by the principal representative and at least two directors of the
insurer who are required to certify, among other matters, whether the minimum
solvency margin has been met and whether the insurer complied with the
conditions attached to its certificate of registration. The independent
approved auditor is required to state whether in its opinion it was reasonable
for the directors to so certify. Where an insurers accounts have been audited
for any purpose other than compliance with the Insurance Act, a statement to
that effect must be filed with the Statutory Financial Return.

Minimum Solvency Margin and Restrictions on Dividends and Distributions.
Under the Insurance Act, the value of the general business assets of a Class
4 insurer, such as IPCRe, must exceed the amount of its general business
liabilities by an amount greater than the prescribed minimum solvency margin.

IPCRe:



| | (1) |  | is required with respect to its general business, to maintain a
minimum solvency margin equal to the greatest of:
| | --- |  | -----------------------------------------------------------------------------------------------------------------
|

| | (A) |  | $100,000,000,                                                                                                                                                                             
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (B) |  | 50% of net premiums written (being gross premiums
written less any premiums ceded by IPCRe. IPCRe may
not deduct more than 25% of gross premiums when
computing net premiums written), and
|
| | (C) |  | 15% of net losses and loss expense reserves,;                                                                                                                                             
|

| | (2) |  | is prohibited from declaring or paying any dividends during any
financial year if it is in breach of its minimum solvency margin or
minimum liquidity ratio (see below) or if the declaration or payment
of such dividends would cause it to fail to meet such margin or ratio
(if it has failed to meet its minimum solvency margin or minimum
liquidity ratio on the last day of any financial year, IPCRe is
prohibited, without the approval of the Authority, from declaring or
paying any dividends during the next financial year);
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (3) |  | is prohibited from declaring or paying in any financial year dividends
of more than 25% of its total statutory capital and surplus (as shown
on its previous financial years statutory balance sheet) unless it
files (at least 7 days before payment of such dividends) with the
Authority an affidavit signed by two directors and the Principal
Representative in Bermuda stating that it will continue to meet the
required margins after the payment of the dividends;                                                              
|
| | (4) |  | is prohibited, without the approval of the Authority, from reducing by
15% or more its total statutory capital as set out in its previous
years financial statements, and any application for such approval
must include an affidavit stating that it will continue to meet the
required                                                                                                                                                                                                                                                 





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##### Table of Contents





| |     |  | margins; and                                                                                                                                                                                                                                                                                                                               
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (5) |  | is required, at any time it fails to meet its solvency margin, within
30 days (45 days where total statutory capital and surplus falls to
$75 million or less) after becoming aware of that failure or having
reason to believe that such failure has occurred, to file with the
Authority a written report containing certain information.

Minimum Liquidity Ratio. The Insurance Act provides a minimum
liquidity ratio for general business insurers, like IPCRe. An insurer engaged
in general business is required to maintain the value of its relevant assets at
not less than 75% of the amount of its relevant liabilities. Relevant assets
include cash and time deposits, quoted investments, unquoted bonds and
debentures, first liens on real estate, investment income due and accrued,
accounts and premiums receivable and reinsurance balances receivable. There
are certain categories of assets which, unless specifically permitted by the
Authority, do not automatically qualify as relevant assets, such as unquoted
equity securities, investments in and advances to affiliates and real estate
and collateral loans. The relevant liabilities are total general business
insurance reserves and total other liabilities less deferred income tax and
sundry liabilities (by interpretation, those not specifically defined).

Supervision, Investigation and Intervention. The Authority may appoint
an inspector with extensive powers to investigate the affairs of an insurer if
the Authority believes that an investigation is required in the interests of
the insurers policyholders or persons who may become policyholders. In order
to verify or supplement information otherwise provided to the Authority, the
Authority may direct an insurer to produce documents or information relating to
matters connected with the insurers business.

If it appears to the Authority that there is a risk of the insurer
becoming insolvent, or that it is breach of the Insurance Act or any
conditions imposed upon its registration, the Authority may, among other
things, direct the insurer: (1) not to take on any new insurance business, (2)
not to vary any insurance contract if the effect would be to increase the
insurers liabilities, (3) not to make certain investments, (4) to realize
certain investments, (5) to maintain in, or transfer to the custody of a
specified bank, certain assets, (6) not to declare or pay dividends or other
distributions or to restrict the making of such payments and/or (7) to limit
its premium income.

Disclosure of Information. In addition to powers under the Insurance
Act to investigate the affairs of an insurer, the Authority may require certain
information from an insurer (or certain other persons) to be produced to the
Authority. Further, the Authority has been given powers to assist other
regulatory authorities, including foreign insurance regulatory authorities with
their investigations involving insurance and reinsurance companies in Bermuda
but subject to restrictions. For example, the Authority must be satisfied that
the assistance being requested is in connection with the discharge of
regulatory responsibilities of the foreign regulatory authority. Further, the
Authority must consider whether to co-operate is in the public interest. The
grounds for disclosure are limited and the Insurance Act provides sanctions for
breach of the statutory duty of confidentiality.

Certain Other Considerations.IPC Holdings, IPCRe and IPCUSL (together
IPCBDA) will each also need to comply with the provisions of the Companies
Act regulating the payment of dividends and making of distributions from
contributed surplus. A company is prohibited from declaring or paying a
dividend, or making a distribution out of contributed surplus, if there are
reasonable grounds for believing that: (a) the company is, or would after the
payment be, unable to pay its liabilities as they become due; or (b) the
realizable value of the companys assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share premium
accounts.

Although IPCBDA are incorporated in Bermuda, they are classified as
non-resident of Bermuda for exchange control purposes by the Bermuda Monetary
Authority. Pursuant to its non-resident status, IPCBDA may hold any currency
other than Bermuda Dollars and convert that currency into any other currency
(other than Bermuda Dollars) without restriction.

As exempted companies, IPCBDA may not, without the express
authorization of the Bermuda legislature or under a license granted by the
Minister, participate in certain business transactions, including: (i) the
acquisition or holding of land in Bermuda (except that held by way of lease or
tenancy agreement which is required for its business and held for a term not
exceeding 50 years, or which is used to provide accommodation or recreational
facilities for its officers and employees and held with the consent of the
Minister, for a term not exceeding 21 years); (ii) the taking of mortgages on
land in Bermuda to secure an amount in excess of $50,000; or (iii) the
carrying on of business of any kind in Bermuda, except in certain limited
circumstances such as doing business with another exempted undertaking in
furtherance of the business of IPCBDA (as the case may be) carried on outside
Bermuda.





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The
Bermuda Government actively encourages foreign investment in
exempted entities like the Company that are based in Bermuda, but do not
operate in competition with local businesses. As well as having no
restrictions on the degree of foreign ownership, IPCBDA are not currently
subject to taxes on their income or dividends or to any foreign exchange
controls in Bermuda. In addition, there currently is no capital gains tax in
Bermuda.

United States

IPCRe is not admitted to do business in the United States. The insurance
laws of each state of the United States and of many other countries regulate
the sale of insurance and reinsurance within their jurisdictions by alien
insurers and reinsurers such as IPCRe, which are not admitted to do business
within such jurisdictions. With some exceptions, such sale of insurance or
reinsurance within a jurisdiction where the insurer is not admitted to do
business is prohibited. We do not intend to maintain an office or to solicit,
advertise, settle claims or conduct other insurance activities in any
jurisdiction other than Bermuda or Ireland where the conduct of such
activities would require that IPCRe be so admitted.

In addition to the regulatory requirements imposed by the jurisdictions
in which they are licensed, reinsurers business operations are affected by
regulatory requirements in various states of the United States governing
credit for reinsurance which are imposed on their ceding companies. In
general, a ceding company which obtains reinsurance from a reinsurer that is
licensed, accredited or approved by the jurisdiction or state in which the
reinsurer files statutory financial statements is permitted to reflect in its
statutory financial statements a credit in an aggregate amount equal to the
liability for unearned premiums and loss reserves and loss expense reserves
ceded to the reinsurer. IPCRe is not licensed, accredited or approved in any
state in the United States. The great majority of states, however, permit a
credit to statutory surplus resulting from reinsurance obtained from a
non-licensed or non-accredited reinsurer to be offset to the extent that the
reinsurer provides a letter of credit or other acceptable security
arrangement. A few states do not allow credit for reinsurance ceded to
non-licensed reinsurers except in certain limited circumstances and others
impose additional requirements that make it difficult to become accredited.
Premiums ceded to IPCRe are also subject to excise tax in the United States
for U.S. business, and in certain other jurisdictions.

We do not believe that IPCRe violates insurance laws of any jurisdiction
in the United States. There can be no assurance, however, that inquiries or
challenges to IPCRes reinsurance activities will not be raised in the future.
We believe that IPCRes manner of conducting business through our offices in
Bermuda has not materially adversely affected its operations to date. There
can be no assurance, however, that our location, regulatory status or
restrictions on our activities resulting therefrom will not adversely affect
our ability to conduct business in the future.

European Union

IPCRe Europe is incorporated in Ireland and is, as such, subject to
regulations imposed by the European Union.

Certain United States Federal Income Tax Considerations

The discussion below is only a general summary of certain United States
federal income tax considerations that are relevant to certain holders of
Common Shares of IPC Holdings. It does not address all relevant tax
considerations that may be relevant to holders of Common Shares nor does it
address tax considerations that may be relevant to certain holders. Investors
and prospective investors should consult their own tax advisors concerning
federal, state, local and non-U.S. tax consequences of ownership and
disposition of Common Shares.

Dividends. Because we believe that we are not a passive foreign
investment company, a foreign personal holding company or a foreign investment
company, we believe that, if you are a non-corporate U.S. person who holds our
Common Shares, dividends paid to you in taxable years beginning after December
31, 2002 but before January 1, 2009 that constitute qualified dividend
income will be taxable to you at a maximum tax rate of 15%, if you hold the
Common Shares for more than 60 days during the 120-day period that begins 60
days before the ex-dividend date and meet other holding period requirements
under United States federal income tax rules. On February 19,
2004 the IRS announced that it will permit taxpayers to apply a
proposed legislative change to the holding period requirement
described in the preceding sentence as if such change were already
effective. The legislative technical correction would
change the minimum required holding period, retroactive to
January 1, 2003, to more than 60 days during the 121 day
period beginning 60 days before the ex-dividend date. Dividends that we pay with
respect to the Common Shares generally will be qualified dividend income if,
in the year that you receive the dividends, the Common Shares are readily
tradable on an established securities market in the United States. For
corporate holders, the dividends will not be eligible for the
dividends-received deduction generally allowed to United States corporations
in respect of dividends received from other United States corporations.
Distributions in excess of our current and accumulated earnings and profits,
as determined for United States federal income tax purposes, will be treated
as a non-taxable return of capital to the extent of your basis in the Common
Shares and thereafter as capital gain. Dividends will be income from sources
outside the United States, but generally will be passive income or
financial services income which is treated separately from other types of
income for purposes of computing the foreign tax credit allowable to you.





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Taxation of IPCBDA.IPCBDA are Bermuda corporations, none of which
files United States federal income tax returns. We believe that IPCRe
operates in such a manner that it is not subject to U.S. tax (other than U.S.
excise tax on reinsurance premiums and withholding tax on certain investment
income from U.S. sources) because it does not engage in a trade or business in
the United States. However, because definitive identification of activities
which constitute being engaged in a trade or business in the United States is
not provided by the U.S. Internal Revenue Code of 1986, as amended (the
Code) or regulations or court decisions, there can be no assurance that the
U.S. Internal Revenue Service (the IRS) will not contend that any of IPCBDA
is engaged in a trade or business in the United States. If IPCRe were to
qualify for benefits under the income tax treaty between the United States and
Bermuda, it would only be subject to U.S. tax if it is deemed to be engaged in
the conduct of a U.S. trade or business through a permanent establishment in
the United States. Any profits attributable to such permanent establishment
would be subject to U.S. tax at regular corporate rates, plus an additional
30% branch profits tax on such income remaining after the regular tax, in
which case our earnings and shareholders equity could be materially adversely
affected.

Currently, IPCRe pays premium excise taxes in the United States (1%),
Australia (3%), and certain other jurisdictions. From time to time, U.S.
legislation has been proposed which would increase excise taxes in the United
States.

Controlled Foreign Corporation Rules.Each United States shareholder of
a controlled foreign corporation (CFC) who owns shares in the CFC on the
last day of the CFCs taxable year must include in its gross income for United
States federal income tax purposes its pro rata share of the CFCs subpart F
income, even if the subpart F income is not distributed. For these purposes,
any U.S. person who owns, directly or indirectly through foreign persons, or is
considered to own under applicable constructive ownership rules of the Code,
10% or more of the total combined voting power of all classes of stock of a
foreign corporation will be considered to be a United States shareholder. In
general, a foreign insurance company such as IPCRe or IPCRe Europe is treated
as a CFC only if such United States shareholders collectively own more than
25% of the total combined voting power or total value of its stock for an
uninterrupted period of 30 days or more during any tax year. AIG owns 24.3% of
the Common Shares, although, pursuant to our Bye-laws, the combined voting
power of these shares is limited to less than 10% of the combined voting power
of all shares. We believe that, because of the dispersion of IPC Holdings
share ownership among holders other than AIG, because of the restrictions on
transfer, issuance or repurchase of the Common Shares, and because under the
Bye-laws no single beneficial shareholder (including AIG) is permitted to
exercise as much as 10% of the total combined voting power of IPC Holdings,
shareholders of IPC Holdings should not be treated as United States
shareholders of a CFC for purposes of these rules. There can be no assurance,
however, that these rules will not apply to shareholders of IPC Holdings,
including as a result of their indirect ownership of the stock of IPC Holdings
subsidiaries. Accordingly, U.S. persons who might, directly or through
attribution, acquire 10% or more of the Common Shares of IPC Holdings should
consider the possible application of the CFC rules.

Related Person Insurance Income Rules.If IPCRes related person
insurance income (RPII) were to equal or exceed 20% of IPCRes gross
insurance income in any taxable year, any U.S. person who owns Common Shares
directly or indirectly on the last day of the taxable year would likely be
required to include in its income for U.S. federal income tax purposes its pro
rata share of IPCRes RPII for the taxable year, determined as if such RPII
were distributed proportionately to such U.S. shareholders at that
date regardless of whether such income is distributed. A U.S.
shareholders pro rata share of IPCRes RPII for any
taxable year, however, will not exceed its proportionate share of
IPCRes earnings and profits for the year (as determined for
U.S. federal income tax purposes). The amount of RPII
earned by IPCRe (generally, premium and related investment income from the
direct or indirect insurance or reinsurance of any direct or indirect U.S.
shareholder of IPCRe or any person related to such shareholder, including IPC
Holdings) will depend on a number of factors, including the geographic
distribution of IPCRes business and the identity of persons directly or
indirectly insured or reinsured by IPCRe. Although we do not believe that the
20% threshold was met in taxable years from 1994 to 2003, some of the factors
which determine the extent of RPII in any period may be beyond our control.
Consequently, there can be no assurance that IPCRes RPII will not equal or
exceed 20% of its gross insurance income in any taxable year.

The RPII
rules described above may also apply to IPCRe Europe. We do not
believe that U.S. persons who owned Common Shares were required to
include any amounts of RPII in income for the taxable years 1998 to
2003 in respect of their indirect ownership of IPCRe Europe, but
there can be no assurance that IPCRe Europes RPII will not
exceed 20% of its gross insurance income in any taxable year and/or
that IPCRe Europe will have no earnings or profits (as determined for
U.S. federal income tax purposes) in any taxable year.

The RPII rules provide that if a shareholder who is a U.S. person disposes
of shares in a foreign insurance corporation that has RPII (even if the amount
of RPII is less than 20% of the corporations gross insurance income) and in
which U.S. persons own 25% or more of the shares, any gain from the disposition
will generally be treated as ordinary income to the extent of the shareholders
share of the corporations undistributed earnings and profits that were
accumulated during the period that the shareholder owned the shares (whether or
not such earnings and profits are attributable to RPII). In addition, such a
shareholder will be required to comply with certain reporting requirements,





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regardless of the amount of shares owned by the shareholder. These rules
should not apply to dispositions of Common Shares because IPC Holdings is not
itself directly engaged in the insurance business and because proposed U.S.
Treasury regulations appear to apply only in the case of shares of corporations
that are directly engaged in the insurance business. There can be no
assurance, however, that the IRS will interpret the proposed regulations in
this manner or that the applicable regulations will not be promulgated in final
form in a manner that would cause these rules to apply to disposition of Common
Shares.

Tax-Exempt Shareholders.Tax-exempt entities are generally required to
treat certain subpart F insurance income, including RPII, that is includable in
income by the tax-exempt entity as unrelated business taxable income.





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Item 2.Properties

Pursuant to an administrative services agreement with American
International Company, Limited (AICL), an indirect wholly-owned subsidiary
of AIG, IPC Holdings and IPCRe are allocated office space in AICLs building
in Bermuda and our executive offices are located there. The address of the
executive offices is American International Building, 29 Richmond Road,
Pembroke HM 08, Bermuda and our telephone number is (441) 298-5100.




Item 3.Legal Proceedings

We will be subject to litigation and arbitration in the ordinary course
of our business. We are not currently involved in any material pending
litigation or arbitration proceedings.




Item 4.Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our shareholders during the fourth
quarter of the year ended December 31, 2003.





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PART II




Item 5.Market for the Registrants Common Stock and Related Shareholder Matters

Our common shares are quoted on the Nasdaq National Market under the
symbol IPCR. The following table sets out the high and low prices for our
common shares for the periods indicated as reported by the Nasdaq National
Market. Such prices reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and do not necessarily represent actual transactions.

|                             |                |  |      |       |     |  |   |       | 
|---------------------------- | -------------- |  | ---- | ----- | --- |  | - | ----- | 
|                             |                |  | High |       | Low
|                             |                |  |      |       |    
|Year ended December 31, 2003 |                |  |      |       |     |  |   |      
|                             | First Quarter  |  | $    | 32.38 |     |  | $ | 27.15 | 
|                             | Second Quarter |  |      | 35.90 |     |  |   | 29.95 | 
|                             | Third Quarter  |  |      | 35.59 |     |  |   | 33.30 | 
|                             | Fourth Quarter |  |      | 39.39 |     |  |   | 34.93 | 
|Year ended December 31, 2002 |                |  |      |       |     |  |   |      
|                             | First Quarter  |  | $    | 32.54 |     |  | $ | 27.51 | 
|                             | Second Quarter |  |      | 34.48 |     |  |   | 29.96 | 
|                             | Third Quarter  |  |      | 32.43 |     |  |   | 25.94 | 
|                             | Fourth Quarter |  |      | 32.49 |     |  |   | 28.55 | 

Our common shares are also listed on the Bermuda Stock Exchange

As of
January 30, 2004, there were 79 holders of record of common shares.

In March and June, 2003 we paid a dividend of $0.16 per common share, and
in September and December, 2003 we paid a dividend of $0.20 per common share.
In September, 2001 we paid a dividend of $0.16 per common share. We did not
pay dividends during 2002 or 2000. The amount and timing of dividends is at
the discretion of our Board of Directors and is dependent upon our profits and
financial requirements, as well as loss experience, business opportunities and
any other factors that the Board deems relevant. In addition, if we have funds
available for distribution, we may nevertheless determine that such funds
should be retained for the purposes of replenishing capital, expanding premium
writings or other purposes. We are a holding company, whose principal source
of income is cash dividends and other permitted payments from IPCRe and IPCUSL.
The payment of dividends from IPCRe to us is restricted under Bermuda law and
regulation, including Bermuda insurance law.

Under the Insurance Act, IPCRe is required to maintain a solvency margin
and a minimum liquidity ratio and is prohibited from declaring or paying any
dividends if to do so would cause IPCRe to fail to meet its solvency margin and
minimum liquidity ratio. Under the Insurance Act, IPCRe is prohibited from
paying dividends of more than 25% of its total statutory capital and surplus at
the end of the previous fiscal year unless it files an affidavit stating that
the declaration of such dividends has not caused it to fail to meet its
solvency margin and minimum liquidity ratio. The Insurance Act also prohibits
IPCRe from declaring or paying dividends requirements without the approval of
the Bermuda Monetary Authority if IPCRe failed to meet its solvency margin and
minimum liquidity ratio on the last day of the previous fiscal year. The
maximum amount of dividends which could be paid by IPCRe to IPC Holdings at
January 1, 2004 without such notification is approximately $389 million. In
addition, IPCRe is prohibited under the Insurance Act from reducing its opening
total statutory capital by more than 15% without the approval of the Authority.
As a result of these factors, there can be no assurance that our dividend
policy will not change or that we will declare or pay any dividends.

On February 10, 2004 we declared a dividend of $0.20 per share, payable on
March 25, 2004 to shareholders of record on March 9, 2004.





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Sales of Unregistered Shares

Information Required by Item 701 of Regulation S-K:



|a) |  | On December 12, 2001 2,847,000 common shares of the Company were sold
via a private placement. In addition, AIG exercised the AIG Option to
acquire 2,775,000 common shares.                        
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) |  | The shares were sold to AIG.                                                                                                                                                                        
|  
|c) |  | The offering price for the private placement was $26.00 per share; no
discounts or commissions were applicable. The AIG Option was
exercisable at a price of $12.7746 per share.                    
|  
|d) |  | Exemption from registration was claimed pursuant to Section 4 (2) of
the Securities Act of 1933. The shares were not sold pursuant to a
registration statement or Rule 144 under the Securities Act.

Equity Compensation Plan

The information required in respect of the Equity Compensation Plan required
by Item 201 (a) (d) is incorporated herein by reference to the information
contained under the caption Executive Compensation in the
Proxy Statement.





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##### Table of Contents






Item 6.Selected Financial Data

The historical consolidated financial data presented below as of and for
each of the periods ended December 31, 2003, 2002, 2001, 2000, and 1999 were
derived from our consolidated financial statements which are incorporated
herein by reference to the Annual Report. The selected consolidated financial
data should be read in conjunction with our consolidated financial statements
and related notes thereto, and with Managements Discussion and Analysis of
Financial Condition and Results of Operations also contained in the Annual
Report and incorporated herein by reference.

|                          |                                             |  |                         |            |      |  |                                          |            |      |  |      |            |    |  |   |            |   |  |   |            |  
|------------------------- | ------------------------------------------- |  | ----------------------- | ---------- | ---- |  | ---------------------------------------- | ---------- | ---- |  | ---- | ---------- | -- |  | - | ---------- | - |  | - | ---------- | -
|                          |                                             |  | Year Ended December 31,
|                          |                                             |  |                        
|                          |                                             |  | 2003                    |            | 2002 |  | 2001                                     |            | 2000 |  | 1999
|                          |                                             |  |                         |            |      |  |                                          |            |      |  |     
|                          |                                             |  |                         |            |      |  | (in thousands, except per share amounts) |            |      |  |     
|Statement of Income Data: |                                             |  |                         |            |      |  |                                          |            |      |  |      |            |    |  |   |            |   |  |   |           
|                          | Gross premiums written                      |  | $                       | 322,762    |      |  | $                                        | 259,685    |      |  | $    | 133,057    |    |  | $ | 93,757     |   |  | $ | 97,162     |  
|                          | Net premiums earned                         |  |                         | 298,901    |      |  |                                          | 226,404    |      |  |      | 123,375    |    |  |   | 86,961     |   |  |   | 94,967     |  
|                          | Net investment income                       |  |                         | 47,089     |      |  |                                          | 49,320     |      |  |      | 32,245     |    |  |   | 31,089     |   |  |   | 30,327     |  
|                          | Other income                                |  |                         | 3,348      |      |  |                                          | 2,684      |      |  |      |           |    |  |   |           |   |  |   |           |  
|                          | Loss and loss adjustment expenses incurred  |  |                         | 54,382     |      |  |                                          | 38,775     |      |  |      | 137,551    |    |  |   | 53,661     |   |  |   | 129,362    |  
|                          | Acquisition costs                           |  |                         | 30,867     |      |  |                                          | 24,521     |      |  |      | 12,686     |    |  |   | 9,049      |   |  |   | 13,028     |  
|                          | General and administrative expenses         |  |                         | 19,103     |      |  |                                          | 13,893     |      |  |      | 9,381      |    |  |   | 9,311      |   |  |   | 9,641      |  
|                          | Exchange loss/(gain), net                   |  |                         | (1,910     | )    |  |                                          | (1,554     | )    |  |      | 551        |    |  |   | 2,348      |   |  |   | 411        |  
|                          | Net realized gains/(losses), on investments |  |                         | 13,733     |      |  |                                          | (44,867    | )    |  |      | 616        |    |  |   | 544        |   |  |   | 30,355     |  
|                          | Net income (loss)                           |  | $                       | 260,629    |      |  | $                                        | 157,906    |      |  | $    | (3,933     | )  |  | $ | 44,225     |   |  | $ | 3,207      |  
|                          | Net income (loss) per common share (1)      |  | $                       | 5.40       |      |  | $                                        | 3.27       |      |  | $    | (0.15      | )  |  | $ | 1.73       |   |  | $ | 0.12       |  
|                          | Weighted average shares outstanding (1)     |  |                         | 48,302,579 |      |  |                                          | 48,266,444 |      |  |      | 26,266,019 |    |  |   | 25,497,671 |   |  |   | 25,988,116 |  
|                          | Cash dividend per common share              |  | $                       | 0.72       |      |  | $                                        |           |      |  | $    | 0.16       |    |  | $ |           |   |  | $ | 1.1125     |  
|                          | Other Data:                                 |  |                         |            |      |  |                                          |            |      |  |      |            |    |  |   |            |   |  |   |            |  
|                          | Loss and loss adjustment expense ratio (2)  |  |                         | 18.2       | %    |  |                                          | 17.1       | %    |  |      | 111.5      | %  |  |   | 61.7       | % |  |   | 136.2      | %
|                          | Expense ratio (2)                           |  |                         | 16.7       | %    |  |                                          | 17.0       | %    |  |      | 17.9       | %  |  |   | 21.1       | % |  |   | 23.9       | %
|                          | Combined ratio (2)                          |  |                         | 34.9       | %    |  |                                          | 34.1       | %    |  |      | 129.4      | %  |  |   | 82.8       | % |  |   | 160.1      | %
|                          | Return on average equity (3)                |  |                         | 18.2       | %    |  |                                          | 16.6       | %    |  |      | (0.7       | )% |  |   | 8.3        | % |  |   | 0.6        | %
|                          | Balance Sheet Data (at end of period):      |  |                         |            |      |  |                                          |            |      |  |      |            |    |  |   |            |   |  |   |            |  
|                          | Total cash and investments                  |  | $                       | 1,671,423  |      |  | $                                        | 1,387,162  |      |  | $    | 1,232,301  |    |  | $ | 598,531    |   |  | $ | 594,754    |  
|                          | Reinsurance balances receivable             |  |                         | 61,194     |      |  |                                          | 50,328     |      |  |      | 42,356     |    |  |   | 25,419     |   |  |   | 21,460     |  
|                          | Total assets                                |  |                         | 1,769,458  |      |  |                                          | 1,473,975  |      |  |      | 1,301,716  |    |  |   | 647,490    |   |  |   | 640,942    |  
|                          | Reserve for losses and loss expenses        |  |                         | 123,320    |      |  |                                          | 119,355    |      |  |      | 162,207    |    |  |   | 61,358     |   |  |   | 111,441    |  
|                          | Unearned premiums                           |  |                         | 61,795     |      |  |                                          | 51,902     |      |  |      | 24,440     |    |  |   | 19,068     |   |  |   | 16,364     |  
|                          | Total shareholders equity                  |  | $                       | 1,569,159  |      |  | $                                        | 1,291,483  |      |  | $    | 1,105,794  |    |  | $ | 559,270    |   |  | $ | 504,931    |  
|                          | Basic book value per common share (4)       |  | $                       | 32.53      |      |  | $                                        | 26.81      |      |  | $    | 22.95      |    |  | $ | 22.34      |   |  | $ | 20.17      |  
|                          | Diluted book value per common share (5)     |  | $                       | 32.46      |      |  | $                                        | 26.75      |      |  | $    | 22.92      |    |  | $ | 21.93      |   |  | $ | 19.43      |  

(1)  Net income per common share is calculated upon the weighted average number
of common shares outstanding during the relevant year. The weighted average
number of shares includes common shares and the dilutive effect of the AIG
Option, employee stock options and stock grants, using the treasury stock
method. The net (loss) per common share for the year ended December 31, 2001
is calculated on the weighted average number of shares outstanding during the
year, excluding the dilutive effect of the AIG Option and employee stock
options.

(2)  The loss and loss adjustment expense ratio is calculated by dividing the
losses and loss expenses incurred by the net premiums earned. The expense
ratio is calculated by dividing the sum of acquisition costs and general and
administrative expenses by net premiums earned. The combined ratio is the sum
of the loss and loss expense ratio and the expense ratio.

(3)  Return on average equity is calculated as the annual net income (loss)
divided by the average of the shareholders equity on the first and last day of
the respective year.

(4)  Basic book value per common share is calculated as shareholders equity
divided by the number of common shares outstanding on the balance sheet date.

(5)  Diluted book value per common share is calculated as shareholders equity
divided by the number of common shares outstanding on the balance sheet date,
after considering the dilutive effects of the AIG Option (where applicable),
stock grants and the options granted to employees, calculated on the basis
described in note (1) above. At December 31, 2003





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the average weighted number of shares outstanding, including the dilutive
effect of employee stock options and stock grants using the treasury stock
method was 48,381,730.




Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations

The information required for this item is incorporated herein by reference
to the narrative contained under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations in the Annual
Report.




Item 7A.Quantitative and Qualitative Disclosures About Market Risk

The information required for this item is incorporated herein by reference
to the section entitled Managements Discussion and Analysis  Quantitative
and Qualitative Disclosure about Market Risk in the Annual Report.




Item 8.Financial Statements and Supplementary Data

The information required for this item is incorporated herein by reference
to the consolidated financial statements of the Company contained in the Annual
Report.




Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On April 17, 2002 the Board of Directors decided not to propose the
re-appointment of Arthur Andersen as its independent auditors to the
shareholders at IPCs Annual General Meeting on June 14, 2002. The filing also
indicated that the Board of Directors had decided to propose the appointment of
KPMG as IPCs independent auditors to serve until the next Annual General
Meeting of IPCs shareholders. The decision not to propose the renewal of
Arthur Andersens engagement was made by the Board of Directors based upon the
recommendation of its Audit Committee. Arthur Andersen had served as IPCs
independent auditors for the nine years since IPCs formation, during which
period management and the Board of Directors believes that they had always
adhered to a high standard of professionalism.

On June 14, 2002 IPCs shareholders resolved to appoint KPMG as IPCs
independent auditors, to serve until the next Annual General Meeting of IPCs
shareholders. As a result of the shareholders action, Arthur Andersen was
dismissed as IPCs independent auditors and KPMG was appointed IPCs
independent auditors, each effective as of June 14, 2002.

During IPCs two most recent fiscal years ended December 31, 2001 and
during the interim period from December 31, 2001 through June 14, 2002, there
were no disagreements between IPC and Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to Arthur Andersens satisfaction,
would have caused Arthur Andersen to make reference to the matter of the
disagreement in connection with their reports. The audit report of Arthur
Andersen on IPCs consolidated financial statements as of and for the year
ended December 31, 2001 did not contain any adverse opinion or disclaimer of
opinion, nor were these opinions qualified or modified as to uncertainty, audit
scope or accounting principles. We provided Arthur Andersen with a copy of the
foregoing disclosures, and a letter from Arthur Andersen confirming its
agreement with these disclosures was filed as an exhibit to the Companys
Current Report on Form 8-K, dated June 14, 2002.

During IPCs two most recent fiscal years ended December 31, 2001 and
during the interim period from December 31, 2001 through June 14, 2002, there
were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.




Item 9A.Controls and Procedures

An evaluation was carried out under the supervision and with the
participation of IPCs management, including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in
Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934). Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that, as of the end of the period covered by this report, the design and
operation of these disclosure controls and procedures were effective. No
significant changes were made in our internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.





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##### Table of Contents






PART III




Item 10.Directors and Executive Officers

The information concerning directors required for this item is
incorporated herein by reference to the information contained under the
captions Election of Directors, Executive Officers and Section 16(a)
Beneficial Ownership Reporting Compliance in the Proxy Statement. We have
adopted a Code of Conductthat applies to all IPC officers, directors and
employees, including our principal executive officer, principal financial
officer and principal accounting officer. We have also adopted a separate Code
of Ethicsfor our Chief Executive Officer and Chief Financial Officer. These
documents are posted on our website at www.ipcre.bm, under
Corporate Governance tab within the Financial
Information section, and we will post any
amendments to or waivers from those documents at that location.




Item 11.Executive Compensation

The information required for this item is incorporated herein by reference
to the information contained under the caption Executive Compensation in the
Proxy Statement.




Item 12.Security Ownership of Certain Beneficial Owners and Management

The information required for this item is incorporated herein by reference
to the information contained under the caption Beneficial Ownership of Common
Shares in the Proxy Statement.




Item 13.Certain Relationships and Related Transactions

The information required for this item is incorporated herein by reference
to the information contained under the caption Certain Relationships and
Related Transactions in the Proxy Statement.




Item 14.Principal Accounting Fees and Services

The information required for this item is incorporated herein by reference
to the information contained under the caption Principal Accounting Fees and
Services in the Proxy Statement.





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##### Table of Contents






PART IV




Item 15.Exhibits, Financial Statement Schedules and Reports on Form 8-K



|(a) |  | Financial Statements and Exhibits
|--- |  | ---------------------------------



| | 1. |  | Financial Statements                                                                                                                                                                                        
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | The following Consolidated Financial Statements of IPC Holdings and Report
of Independent Auditors are incorporated herein by reference to the Annual Report:                                               
|
| |    |  | Report of Independent Auditors                                                                                                                                                                              
|
| |    |  | Consolidated balance sheets as of December 31, 2003 and 2002                                                                                                                                                
|
| |    |  | Consolidated statements of income (loss) for the years ended December 31,
2003, 2002 and 2001                                                                                                               
|
| |    |  | Consolidated statements of comprehensive income for the years ended
December 31, 2003, 2002 and 2001                                                                                                        
|
| |    |  | Consolidated statements of changes in shareholders equity for the
years ended December 31, 2003, 2002 and 2001                                                                                             
|
| |    |  | Consolidated statements of cash flows for the years ended December 31,
2003, 2002 and 2001                                                                                                                  
|
| |    |  | Notes to the consolidated financial statements                                                                                                                                                              
|
| | 2. |  | Financial Statement Schedules                                                                                                                                                                               
|
| |    |  | Report of Independent Auditors on Schedules                                                                                                                                                                 
|
| |    |  | Schedule I - Summary of
Investments - Other than Investments in Related
Parties                                                                                                                             
|
| |    |  | Schedule II - Condensed Financial Information of Registrant                                                                                                                                                 
|
| |    |  | Schedule III - Supplementary Insurance Information of Subsidiary for
the years ended December 31, 2003, 2002 and 2001                                                                                       
|
| |    |  | Schedule IV - Supplementary Information concerning Reinsurance for the
years ended December 31, 2003, 2002 and 2001                                                                                         
|
| |    |  | Certain schedules have been omitted, either because they are not
applicable, or because the information is included in our consolidated
financial statements incorporated by reference to the Annual Report.





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##### Table of Contents



3.     Exhibits

|        |  |                                                                                                                                |  |                 
|------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----------------
|Exhibit |  |                                                                                                                                |  |                 
|Number  |  | Description                                                                                                                    |  | Method of filing
|        |  |                                                                                                                                |  |                 
|3.1     |  | Memorandum of Association of the Company                                                                                       |  | *               
|        |  |                                                                                                                                |  |                 
|3.2     |  | Amended and Restated Bye-Laws of the Company                                                                                   |  | §               
|        |  |                                                                                                                                |  |                 
|3.3     |  | Form of Memorandum of Increase of Share Capital                                                                                |  | *               
|        |  |                                                                                                                                |  |                 
|4.1     |  | Form of Registration Rights Agreement                                                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|4.2     |  | Form of Share Certificate                                                                                                      |  | *               
|        |  |                                                                                                                                |  |                 
|10.1    |  | Termination Agreement among the Company and its previous
shareholders                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|10.2    |  | Form of Amended and Restated Option Agreement entered
into between the Company and AIG                                         |  | *               
|        |  |                                                                                                                                |  |                 
|10.3   |  | Amended and Restated IPC Holdings, Ltd. Stock Option Plan                                                                      |  | ¤¤              
|        |  |                                                                                                                                |  |                 
|10.4   |  | IPCRe Defined Contribution Plan                                                                                                |  | *               
|        |  |                                                                                                                                |  |                 
|10.5    |  | Amended and Restated Administrative Services Agreement
among the Company, IPCRe and AICL                                       |  | *               
|        |  |                                                                                                                                |  |                 
|10.6    |  | Investment Management Agreement between IPCRe and AIGIC,
as amended                                                            |  | **              
|        |  |                                                                                                                                |  |                 
|10.7    |  | Investment Sub-Advisory Agreement between AIGIC and AIGIC
(Europe) (formerly known as Dempsey & Company
International Limited) |  | *               
|        |  |                                                                                                                                |  |                 
|10.8    |  | Custodial Agreement between AIGTS and IPCRe                                                                                    |  | *               
|        |  |                                                                                                                                |  |                 
|10.9   |  | Retirement Agreement between IPCRe and James P. Bryce                                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|10.10  |  | Retirement Agreement between IPCRe and Peter J.A. Cozens                                                                       |  | *               
|        |  |                                                                                                                                |  |                 
|10.11  |  | Amended and Restated IPC Holdings, Ltd. Deferred
Compensation Plan                                                             |  | ¤               
|        |  |                                                                                                                                |  |                 
|10.12   |  | Credit Agreement between IPCRe Limited, the Bank One, and
other Lenders named therein                                          |  | +               
|        |  |                                                                                                                                |  |                 
|10.13   |  | Purchase Agreement between the Company and AIG                                                                                 |  | #               
|        |  |                                                                                                                                |  |                 
|10.14   |  | Underwriting Agency Agreement between Allied World
Assurance Company Ltd. and IPCUSL                                           |  | §§§             
|        |  |                                                                                                                                |  |                 
|10.15   |  | Amended Schedule I (Investment Policy Guideline) to
Investment Management Agreement between IPCRe and AIGIC                    |  | §§§             
|        |  |                                                                                                                                |  |                 
|10.16  |  | IPC Holdings, Ltd. Stock Incentive Plan                                                                                        |  | §§              





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##### Table of Contents



|        |  |                                                                                                         |  |                 
|------- |  | ------------------------------------------------------------------------------------------------------- |  | ----------------
|Exhibit |  |                                                                                                         |  |                 
|Number  |  | Description                                                                                             |  | Method of filing
|        |  |                                                                                                         |  |                 
|11.1    |  | Statement regarding Computation of Per Share
Earnings                                                   |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|13.1    |  | Portions of the Annual Report incorporated
herein by reference                                          |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|16.1    |  | Letter of Arthur Andersen, dated June 21, 2002                                                          |  | ##              
|        |  |                                                                                                         |  |                 
|21.1    |  | Subsidiaries of the Registrant                                                                          |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|23.1    |  | Consent of KPMG                                                                                         |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|31.1    |  | Certification by Chief Executive Officer, as
required by Section 302 of the Sarbanes-Oxley
Act of 2002. |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|31.2    |  | Certification by Chief Financial Officer, as
required by Section 302 of the Sarbanes-Oxley
Act of 2002  |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|32.1 ©  |  | Certification by Chief Executive Officer, as
required by Section 906 of the Sarbanes-Oxley
Act of 2002  |  | Filed herewith  
|        |  |                                                                                                         |  |                 
|32.2©   |  | Certification by Chief Financial Officer, as
required by Section 906 of the Sarbanes-Oxley
Act of 2002  |  | Filed herewith  

|    |  |                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   |  | Incorporated by reference to the corresponding exhibit in our
Registration Statement on Form S-1 (No. 333-00088).                                                                                                                                    
|    |  |                                                                                                                                                                                                                                                      
|+   |  | Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the
quarter ended June 30, 2003 (File No. 0-27662).                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|**  |  | Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the
quarter ended June 30, 1997 (File No. 0-27662), and Exhibit 10.1 to our
Form 10-Q for the quarter ended June 30, 2002 (File No. 0-27662).                                         
|    |  |                                                                                                                                                                                                                                                      
|++  |  | Incorporated by reference to Exhibits 10.1 and 10.2 to our Form 10-Q for the quarter ended June 30, 1998 (File No.
0-27662), and Exhibit 10.2 to our Form 10-Q for the quarter ended June 30, 2002 (File No. 0-27662).                               
|    |  |                                                                                                                                                                                                                                                      
|¤   |  | Incorporated by reference to Exhibits 10.1 and 10.2 to our Form 10-Q for the quarter ended September 30, 1999 (File No.
0-27662).                                                                                                                    
|    |  |                                                                                                                                                                                                                                                      
|¤¤  |  | Incorporated by reference to Exhibit 10.3 to our Form 10-K for the year ended December 31, 1999 (File No. 0-27662).                                                                                                                                  
|    |  |                                                                                                                                                                                                                                                      
|#   |  | Incorporated by reference to Exhibit 10 to our Registration Statement on Form S-3 (No. 333-73828).                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|§§§ |  | Incorporated by reference to Exhibits 10.15 and 10.16 to our Form 10-K for the year ended December 31, 2001 (File No. 0-27662).                                                                                                                      
|    |  |                                                                                                                                                                                                                                                      
|##  |  | Incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K, dated as of June 14, 2002.                                                                                                                                              
|    |  |                                                                                                                                                                                                                                                      
|§   |  | Incorporated by reference to Exhibit 3.2 to our Form 10-K for the year ended December 31, 2002 (File No. 0-27662).                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|§§  |  | Incorporated by reference to Exhibit 4.2 to our filing on Form S-8 of July 15, 2003.                                                                                                                                                                 
|    |  |                                                                                                                                                                                                                                                      
|   |  | Management contract or compensatory plan, contract or arrangement.                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|©   |  | These certifications are being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and (b) of
Section 1350, Chapter 63 of Title 18, United States Code), and are not
being filed as exhibits to this report.

(b)  Reports on Form 8-K.





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##### Table of Contents



On October 22, 2003, the Company filed a Form 8-K current report (date of
earliest event reported: October 21, 2003) (a) advising that the company had
announced its financial results for the fiscal quarter ended September 30,
2003 via a press release, and (b) furnishing such statements under Item 12.
Results of Operations and Financial Condition.





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##### Table of Contents



IPC HOLDINGS, LTD.

INDEX TO SCHEDULES

|                                            |  |                                                                                                        |  |   
|------------------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | --
|SCHEDULE / REPORT                           |  | Page                                                                                                  
|                                            |  |                                                                                                       
|Report of Independent Auditors on Schedules |  | 34                                                                                                    
|                                            |  |                                                                                                        |  |   
|Schedule I                                  |  | Summary of Investments - Other than Investments in Related Parties                                     |  | 36
|                                            |  |                                                                                                        |  |   
|Schedule II                                 |  | Condensed Financial Information of the Registrant                                                      |  | 37
|                                            |  |                                                                                                        |  |   
|Schedule III                                |  | Supplementary Insurance Information of Subsidiary for the years ended December 31, 2003,
2002 and 2001 |  | 40
|                                            |  |                                                                                                        |  |   
|Schedule IV                                 |  | Supplementary Information concerning Reinsurance for the years ended December 31, 2003,
2002 and 2001  |  | 41





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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of IPC Holdings, Ltd.

Under date of January 30, 2004, we reported on the consolidated balance sheet
of IPC Holdings, Ltd. and subsidiaries as of December 31, 2003 and 2002, and
the related consolidated statements of income (loss), comprehensive income,
shareholders equity and cash flows for the two-years ended December 31, 2003 and
2002, as contained in the December 31, 2003 annual report to shareholders.
These consolidated financial statements and our report thereon are incorporated
by reference in the annual report on Form 10-K. In connection with our audit
of the 2003 and 2002 consolidated financial statements, we also have audited
the related financial schedules as listed in the accompanying
index. These financial statement schedules are the responsibility
of the Companys management. Our responsibility is to express an opinion on
the related 2003 and 2002 financial statement schedules based on
our audits. The consolidated statements of income (loss), comprehensive income,
shareholders equity and cash flows for the year ended December 31, 2001 and
the related financial statement schedules as listed in the
accompanying index, were audited by other auditors who have ceased operations.
Those auditors expressed an unqualified opinion on those consolidated financial
statements and the related financial statement schedules in their
report dated February 8, 2002.

In our opinion, the related 2003 and 2002 financial statement
schedules, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.

/s/ KPMG

Chartered Accountants
Hamilton, Bermuda
January 30, 2004






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##### Table of Contents



The following report is a copy of a report previously issued by Arthur Andersen
and has not been reissued by Arthur Andersen. This report applies to the
consolidated financial statements of IPC Holdings, Ltd. and subsidiaries
included in IPC Holdings, Ltd.s annual report to shareholders for the fiscal
years ended December 31, 2001:

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of IPC Holdings, Ltd.

We have audited in accordance with generally accepted auditing standards
the consolidated financial statements of IPC Holdings, Ltd. and subsidiaries
included in IPC Holdings, Ltd.s annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated February
8, 2002. Our audit was made for the purpose of forming an opinion on those
financial statements taken as a whole. The schedules listed in the
accompanying index are the responsibility of the Companys management and are
presented for purposes of complying with the Securities and Exchange
Commissions rules and are not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN
Hamilton, Bermuda
February 8, 2002





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##### Table of Contents



SCHEDULE I

IPC HOLDINGS, LTD.

SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
(Expressed in thousands of United States Dollars)

|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           |                |           | 
|-------------------------------------------- | --------------------------------------- | ---------------------- | --------- | ----------------- | --------- | ------ | --------- | ------------- | --------- | - | --------- | -------------- | --------- | 
|                                             |                                         |                        |           | Year ended        |           |        |           |              
|                                             |                                         |                        |           | December 31, 2003 |           |        |           |              
|                                             |                                         |                        |           |                   |           |        |           |              
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           | Amount at     
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           | which shown in
|                                             |                                         |                        |           | Amortized         |           | Market |           | the          
|                                             |                                         |                        |           | Cost              |           | Value  |           | Balance Sheet
|                                             |                                         |                        |           |                   |           |        |           |              
|Type of investment:                          |                                         |                        |           |                   |           |        |           |               |           |   |           |               
|Fixed maturities                             |                                         |                        |           |                   |           |        |           |               |           |   |           |               
|                                             | U.S. Government and government agencies |                        | $         | 310,147           |           |        | $         | 311,626       |           |   | $         | 311,626        |          
|                                             | Other governments                       |                        |           | 258,411           |           |        |           | 260,719       |           |   |           | 260,719        |          
|                                             | Corporate                               |                        |           | 596,186           |           |        |           | 612,098       |           |   |           | 612,098        |          
|                                             | Supranational entities                  |                        |           | 75,444            |           |        |           | 76,024        |           |   |           | 76,024         |          
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           |                |          
|                                             |                                         | Total fixed maturities |           |                   | 1,240,188 |        |           |               | 1,260,467 |   |           |                | 1,260,467 | 
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           |                |          
|Equity investments                           |                                         |                        | 248,179   |                   |           |        | 319,007   |               |           |   | 319,007   |               
|Cash and cash equivalents                    |                                         |                        | 91,949    |                   |           |        | 91,949    |               |           |   | 91,949    |               
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           |                |          
|Total investments, cash and cash equivalents |                                         | $                      | 1,580,316 |                   |           | $      | 1,671,423 |               |           | $ | 1,671,423 |               
|                                             |                                         |                        |           |                   |           |        |           |               |           |   |           |                |          





---



##### Table of Contents



SCHEDULE II

IPC HOLDINGS, LTD.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEET
(PARENT COMPANY)
(Expressed in thousands of United States Dollars)

|                                                                                                                           |  |                    |           |      |  |   |           | 
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ---- |  | - | --------- | 
|                                                                                                                           |  | As of December 31,
|                                                                                                                           |  |                   
|                                                                                                                           |  | 2003               |           | 2002
|                                                                                                                           |  |                    |           |     
|ASSETS:                                                                                                                    |  |                    |           |      |  |   |           | 
|Cash                                                                                                                       |  | $                  | 99        |      |  | $ | 106       | 
|Investment in wholly-owned subsidiaries                                                                                    |  |                    | 1,569,150 |      |  |   | 1,292,606 | 
|Receivable from subsidiaries                                                                                               |  |                    | 2,429     |      |  |   |          | 
|Other assets                                                                                                               |  |                    | 295       |      |  |   | 228       | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|                                                                                                                           |  | $                  | 1,571,973 |      |  | $ | 1,292,940 | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|LIABILITIES:                                                                                                               |  |                    |           |      |  |   |           | 
|Payable to subsidiaries                                                                                                    |  | $                  | 2,607     |      |  | $ | 1,310     | 
|Other liabilities                                                                                                          |  |                    | 207       |      |  |   | 147       | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|                                                                                                                           |  |                    | 2,814     |      |  |   | 1,457     | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|SHAREHOLDERS EQUITY:                                                                                                      |  |                    |           |      |  |   |           | 
|Share
capital  2003: 48,292,270
shares outstanding, par value $0.01;
2002: 48,179,805 shares outstanding,
par value $0.01 |  |                    | 483       |      |  |   | 482       | 
|Additional paid in capital                                                                                                 |  |                    | 850,133   |      |  |   | 846,397   | 
|Deferred stock grant
compensation                                                                                          |  |                    | (1,495    | )    |  |   |          | 
|Retained earnings                                                                                                          |  |                    | 628,931   |      |  |   | 404,345   | 
|Accumulated other comprehensive
income                                                                                     |  |                    | 91,107    |      |  |   | 40,259    | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|                                                                                                                           |  |                    | 1,569,159 |      |  |   | 1,291,483 | 
|                                                                                                                           |  |                    |           |      |  |   |           | 
|                                                                                                                           |  | $                  | 1,571,973 |      |  | $ | 1,292,940 | 
|                                                                                                                           |  |                    |           |      |  |   |           | 





---



##### Table of Contents



SCHEDULE II
continued

IPC HOLDINGS, LTD.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT - continued

STATEMENT OF INCOME (LOSS)
(PARENT COMPANY)
(Expressed in thousands of United States Dollars)

|                                                                |                                   |   |                         |       |      |   |         |       |  |   |        |     | 
|--------------------------------------------------------------- | --------------------------------- | - | ----------------------- | ----- | ---- | - | ------- | ----- |  | - | ------ | --- | 
|                                                                |                                   |   | Year ended December 31,
|                                                                |                                   |   |                        
|                                                                |                                   |   | 2003                    |       | 2002 |   | 2001   
|                                                                |                                   |   |                         |       |      |   |        
|Interest income                                                 |                                   | $ | 0                       |       |      | $ | 0       |       |  | $ | 2      |    
|Expenses:                                                       |                                   |   |                         |       |      |   |         |       |  |   |        |    
|                                                                | Operating costs and expenses, net |   |                         | 1,568 |      |   |         | 1,256 |  |   |        | 920 | 
|                                                                |                                   |   |                         |       |      |   |         |       |  |   |        |    
|(Loss) before equity
in net income of
wholly-owned
subsidiaries |                                   |   | (1,568                  | )     |      |   | (1,256  | )     |  |   | (918   | )  
|                                                                |                                   |   |                         |       |      |   |         |       |  |   |        |    
|Equity in net income
(loss) of wholly-owned
subsidiaries        |                                   |   | 262,197                 |       |      |   | 159,162 |       |  |   | (3,015 | )  
|                                                                |                                   |   |                         |       |      |   |         |       |  |   |        |    
|Net income (loss)
available to common
shareholders              |                                   | $ | 260,629                 |       |      | $ | 157,906 |       |  | $ | (3,933 | )  
|                                                                |                                   |   |                         |       |      |   |         |       |  |   |        |    

STATEMENT OF COMPREHENSIVE INCOME
(PARENT COMPANY)
(Expressed in thousands of United States Dollars)

|                             |                                                                       |   |                         |         |      |   |         |         |   |   |        |       |  
|---------------------------- | --------------------------------------------------------------------- | - | ----------------------- | ------- | ---- | - | ------- | ------- | - | - | ------ | ----- | -
|                             |                                                                       |   | Year ended December 31,
|                             |                                                                       |   |                        
|                             |                                                                       |   | 2003                    |         | 2002 |   | 2001   
|                             |                                                                       |   |                         |         |      |   |        
|Net income (loss)            |                                                                       | $ | 260,629                 |         |      | $ | 157,906 |         |   | $ | (3,933 | )    
|                             |                                                                       |   |                         |         |      |   |         |         |   |   |        |      
|Other comprehensive income : |                                                                       |   |                         |         |      |   |         |         |   |   |        |      
|                             | Holding gains (losses), net on investments during period              |   |                         | 64,581  |      |   |         | (17,251 | ) |   |        | 8,679 |  
|                             | Reclassification adjustment for (gains) losses included in net income |   |                         | (13,733 | )    |   |         | 44,867  |   |   |        | (616  | )
|                             |                                                                       |   |                         |         |      |   |         |         |   |   |        |      
|                             |                                                                       |   | 50,848                  |         |      |   | 27,616  |         |   |   | 8,063  |      
|                             |                                                                       |   |                         |         |      |   |         |         |   |   |        |      
|Comprehensive income         |                                                                       | $ | 311,477                 |         |      | $ | 185,522 |         |   | $ | 4,130  |      
|                             |                                                                       |   |                         |         |      |   |         |         |   |   |        |      





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SCHEDULE II
continued

IPC HOLDINGS, LTD.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT - continued

STATEMENT OF CASH FLOWS
(PARENT COMPANY)
(Expressed in thousands of United States Dollars)

|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |       |  |      |  
|-------------------------------------------------------- | --------------------------------------------- | - | ---------------------------- | -------- | ----------------------- | ------ | ------- | -------- | ---- | ---- | -------- | ----- |  | ---- | -
|                                                         |                                               |   |                              |          | Year ended December 31,
|                                                         |                                               |   |                              |          |                        
|                                                         |                                               |   |                              |          | 2003                    |        | 2002    |          | 2001
|                                                         |                                               |   |                              |          |                         |        |         |          |     
|CASH FLOWS FROM OPERATING ACTIVITIES                     |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|Net income (loss)                                        |                                               | $ | 260,629                      |          |                         | $      | 157,906 |          |      | $    | (3,933   | )    
|Adjustments to reconcile net income
to cash provided by: |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|                                                         | Equity in net (income) loss
from subsidiaries |   |                              | (262,197 | )                       |        |         | (159,162 | )    |      |          | 3,015 | 
|                                                         | Stock compensation                            |   |                              | 842      |                         |        |         |         |      |      |          |      | 
|                                                         | Changes in, net:                              |   |                              |          |                         |        |         |          |      |      |          |       | 
|                                                         |                                               |   | Other assets                 |          |                         | (67    | )       |          |      | (129 | )        |       |  | 321  |  
|                                                         |                                               |   | Receivable from
subsidiaries |          |                         | (2,429 | )       |          |      |     |          |       |  |     |  
|                                                         |                                               |   | Payable to subsidiaries      |          |                         | 1,297  |         |          |      | (915 | )        |       |  | (408 | )
|                                                         |                                               |   | Other liabilities            |          |                         | 60     |         |          |      | (424 | )        |       |  | 495  |  
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|                                                         |                                               |   | (1,865                       | )        |                         |        | (2,724  | )        |      |      | (510     | )    
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|CASH FLOWS FROM FINANCING ACTIVITIES                     |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|Additional share capital
received                        |                                               |   | 67                           |          |                         |        | 167     |          |      |      | 546,404  |      
|Additional investment in
subsidiaries                    |                                               |   |                             |          |                         |        |        |          |      |      | (545,921 | )    
|Dividends received from
subsidiaries                     |                                               |   | 36,500                       |          |                         |        | 2,500   |          |      |      | 4,099    |      
|Dividends paid to shareholders                           |                                               |   | (34,709                      | )        |                         |        |        |          |      |      | (4,010   | )    
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|                                                         |                                               |   | 1,858                        |          |                         |        | 2,667   |          |      |      | 572      |      
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|Net
(decrease) increase in cash and cash equivalents     |                                               |   | (7                           | )        |                         |        | (57     | )        |      |      | 62       |      
|Cash and cash equivalents,
beginning of year             |                                               |   | 106                          |          |                         |        | 163     |          |      |      | 101      |      
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      
|Cash and cash equivalents, end of
year                   |                                               | $ | 99                           |          |                         | $      | 106     |          |      | $    | 163      |      
|                                                         |                                               |   |                              |          |                         |        |         |          |      |      |          |      





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SCHEDULE III

IPC HOLDINGS, LTD. AND SUBSIDIARIES

SUBSIDIARY SUPPLEMENTARY INSURANCE INFORMATION
(Expressed in thousands of United States Dollars)

|        |  |                    |  |                 |       |                |  |               |         |         |  |            |        |            |  |             |         |            |  |          |        |           |  |              |         |  |  |   |        |  |  |   |        |  |  |   |         | 
|------- |  | ------------------ |  | --------------- | ----- | -------------- |  | ------------- | ------- | ------- |  | ---------- | ------ | ---------- |  | ----------- | ------- | ---------- |  | -------- | ------ | --------- |  | ------------ | ------- |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | 
|        |  |                    |  |                 |       |                |  | Future policy |         |         |  |            |        |            |  |             |         |            |  |          |        | Benefits, |  | Amortization |         |  |  |   |        |  |  |  
|        |  |                    |  |                 |       |                |  | benefits,     |         |         |  |            |        |            |  |             |         |            |  |          |        | claims,   |  | of deferred  |         |  |  |   |        |  |  |  
|        |  |                    |  | Deferred policy |       | losses, claims |  |               |         |         |  |            |        |            |  | Net         |         | losses and |  | policy   |        | Other     |  | Gross       
|        |  |                    |  | acquisition     |       | and loss       |  | Unearned      |         | Premium |  | investment |        | settlement |  | acquisition |         | operating  |  | premiums
|Segment |  |                    |  | costs           |       | expense        |  | premiums      |         | revenue |  | income     |        | expenses   |  | costs       |         | expenses   |  | written 
|        |  |                    |  |                 |       |                |  |               |         |         |  |            |        |            |  |             |         |            |  |         
|2003:   |  | Property & Similar |  | $               | 8,035 |                |  | $             | 123,320 |         |  | $          | 61,795 |            |  | $           | 298,901 |            |  | $        | 47,089 |           |  | $            | 54,382  |  |  | $ | 30,867 |  |  | $ | 17,532 |  |  | $ | 322,762 | 
|2002:   |  | Property & Similar |  | $               | 6,095 |                |  | $             | 119,355 |         |  | $          | 51,902 |            |  | $           | 226,404 |            |  | $        | 49,320 |           |  | $            | 38,775  |  |  | $ | 24,521 |  |  | $ | 12,633 |  |  | $ | 259,685 | 
|2001:   |  | Property & Similar |  | $               | 2,833 |                |  | $             | 162,207 |         |  | $          | 24,440 |            |  | $           | 123,375 |            |  | $        | 32,244 |           |  | $            | 137,551 |  |  | $ | 12,686 |  |  | $ | 8,443  |  |  | $ | 133,057 | 





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SCHEDULE IV

REINSURANCE
(Expressed in thousands of United States Dollars)

|      |  |                    |  |   |   |              |  |           |        |           |  |                |         |                |  |   |         |               |  |  |     |   |  | 
|----- |  | ------------------ |  | - | - | ------------ |  | --------- | ------ | --------- |  | -------------- | ------- | -------------- |  | - | ------- | ------------- |  |  | --- | - |  | 
|      |  |                    |  |   |   |              |  |           |        | Ceded to  |  | Assumed from   |         |                |  |   |         | Percentage of
|      |  |                    |  |   |   |              |  |           |        | other     |  | other          |         |                |  |   |         | amount       
|      |  |                    |  |   |   | Gross Amount |  | companies |        | companies |  | Net Amount (1) |         | assumed to net
|      |  |                    |  |   |   |              |  |           |        |           |  |                |         |               
|2003: |  | Property & Similar |  | $ |  |              |  | $         | 14,466 |           |  | $              | 322,762 |                |  | $ | 308,296 |               |  |  | 105 | %
|2002: |  | Property & Similar |  | $ |  |              |  | $         | 5,410  |           |  | $              | 259,685 |                |  | $ | 254,275 |               |  |  | 102 | %
|2001: |  | Property & Similar |  | $ |  |              |  | $         | 4,418  |           |  | $              | 133,057 |                |  | $ | 128,639 |               |  |  | 103 | %

(1)  Premiums Written





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IPC HOLDINGS, LTD.




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized, in
Pembroke, Bermuda, on the 27th day of February, 2004.

| |  |                                       |  | 
| |  | ------------------------------------- |  | 
| |  | IPC HOLDINGS, LTD.                   
| |  |                                       |  | 
| |  | /s/ JAMES P. BRYCE                    |  | 
| |  |                                       |  | 
| |  | By:         James P. Bryce            |  | 
| |  | President and Chief Executive Officer |  | 

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of
the Registrant and in the capacities indicated and on the dates indicated.

|                                                         |  |                                                                                 |  |                  
|-------------------------------------------------------- |  | ------------------------------------------------------------------------------- |  | -----------------
|Signature                                                |  | Title                                                                           |  | Date             
|                                                         |  |                                                                                 |  |                  
|/s/ JOSEPH C.H. JOHNSON

Joseph C.H. Johnson             |  | Chairman of the
Board of Directors                                              |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ JAMES P. BRYCE

James P. Bryce                       |  | President, Chief
Executive Officer
and Director                                 |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ JOHN R. WEALE

John R. Weale                         |  | Senior Vice
President, Chief
Financial Officer
and principal
accounting officer |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ FRANK MUTCH

Frank Mutch                             |  | Deputy Chairman of
the Board of  Directors                                      |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ ANTHONY PILLING

Anthony M. Pilling                  |  | Director                                                                        |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ CLARENCE JAMES

Dr. The Honourable Clarence E. James |  | Director                                                                        |  | February 27, 2004
|                                                         |  |                                                                                 |  |                  
|/s/ JACKIE CLEGG

Jackie Clegg                           |  | Director                                                                        |  | February 27, 2004





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EXHIBIT INDEX

|        |  |                                                                                                                                |  |                 
|------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----------------
|Exhibit |  |                                                                                                                                |  |                 
|Number  |  | Description                                                                                                                    |  | Method of filing
|        |  |                                                                                                                                |  |                 
|3.1     |  | Memorandum of Association of the Company                                                                                       |  | *               
|        |  |                                                                                                                                |  |                 
|3.2     |  | Amended and Restated Bye-Laws of the Company                                                                                   |  | §               
|        |  |                                                                                                                                |  |                 
|3.3     |  | Form of Memorandum of Increase of Share Capital                                                                                |  | *               
|        |  |                                                                                                                                |  |                 
|3.4     |  | Form of Registration Rights Agreement                                                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|4.1     |  | Form of Share Certificate                                                                                                      |  | *               
|        |  |                                                                                                                                |  |                 
|10.1    |  | Termination Agreement among the Company and its previous shareholders                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|10.2    |  | Form of Amended and Restated Option Agreement entered into between the
Company and AIG                                         |  | *               
|        |  |                                                                                                                                |  |                 
|10.3   |  | Amended and Restated IPC Holdings, Ltd. Stock Option Plan                                                                      |  | ¤¤              
|        |  |                                                                                                                                |  |                 
|10.4   |  | IPCRe Defined Contribution Plan                                                                                                |  | *               
|        |  |                                                                                                                                |  |                 
|10.5    |  | Amended and Restated Administrative Services Agreement among the Company,
IPCRe and AICL                                       |  | *               
|        |  |                                                                                                                                |  |                 
|10.6    |  | Investment Management Agreement between IPCRe and AIGIC, as amended                                                            |  | **              
|        |  |                                                                                                                                |  |                 
|10.7    |  | Investment Sub-Advisory Agreement between AIGIC and AIGIC (Europe)
(formerly known as Dempsey & Company International Limited) |  | *               
|        |  |                                                                                                                                |  |                 
|10.8    |  | Custodial Agreement between AIGTS and IPCRe                                                                                    |  | *               
|        |  |                                                                                                                                |  |                 
|10.9   |  | Retirement Agreement between IPCRe and James P. Bryce                                                                          |  | *               
|        |  |                                                                                                                                |  |                 
|10.10  |  | Retirement Agreement between IPCRe and Peter J.A. Cozens                                                                       |  | *               
|        |  |                                                                                                                                |  |                 
|10.11  |  | Amended and Restated IPC Holdings, Ltd. Deferred Compensation Plan                                                             |  | ¤               
|        |  |                                                                                                                                |  |                 
|10.12   |  | Credit Agreement between IPCRe Limited, Bank One NA, and other Lenders
named therein, as amended                               |  | +               
|        |  |                                                                                                                                |  |                 
|10.13   |  | Purchase Agreement between the Company and AIG                                                                                 |  | #               
|        |  |                                                                                                                                |  |                 
|10.14   |  | Underwriting Agency Agreement between Allied World Assurance Company Ltd
and IPCUSL                                            |  | §§§             
|        |  |                                                                                                                                |  |                 
|10.15   |  | Amended Schedule I (Investment Policy Guideline) to Investment Management
Agreement between IPCRe and AIGIC                    |  | §§§             
|        |  |                                                                                                                                |  |                 
|10.16   |  | IPC Holdings, Ltd. Stock Incentive Plan                                                                                        |  | §§              
|        |  |                                                                                                                                |  |                 
|11.1    |  | Statement regarding Computation of Per Share Earnings                                                                          |  | Filed herewith  
|        |  |                                                                                                                                |  |                 
|13.1    |  | Portions of the Annual Report incorporated herein by reference                                                                 |  | Filed herewith  
|        |  |                                                                                                                                |  |                 
|16.1    |  | Letter of Arthur Andersen, dated June 21, 2002                                                                                 |  | ##              
|        |  |                                                                                                                                |  |                 
|21.1    |  | Subsidiaries of the Registrant                                                                                                 |  | Filed herewith  





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|        |  |                                                                                                        |  |                 
|------- |  | ------------------------------------------------------------------------------------------------------ |  | ----------------
|Exhibit |  |                                                                                                        |  |                 
|Number  |  | Description                                                                                            |  | Method of filing
|        |  |                                                                                                        |  |                 
|23.1    |  | Consent of KPMG                                                                                        |  | Filed herewith  
|        |  |                                                                                                        |  |                 
|31.1    |  | Certification by Chief Executive Officer, as required by Section 302 of
the Sarbanes-Oxley Act of 2002 |  | Filed herewith  
|        |  |                                                                                                        |  |                 
|31.2    |  | Certification by Chief Financial Officer, as required by Section 302 of
the Sarbanes-Oxley Act of 2002 |  | Filed herewith  
|        |  |                                                                                                        |  |                 
|32.1 ©  |  | Certification by Chief Executive Officer, as required by Section 906 of
the Sarbanes-Oxley Act of 2002 |  | Filed herewith  
|        |  |                                                                                                        |  |                 
|32.2 ©  |  | Certification by Chief Financial Officer, as required by Section 906 of
the Sarbanes-Oxley Act of 2002 |  | Filed herewith  

|    |  |                                                                                                                                                                                                                                                       |  |  |  | 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|*   |  | Incorporated by reference to the corresponding exhibit in our
Registration Statement on Form S-1 (No. 333-00088).                                                                                                                                    
|    |  |                                                                                                                                                                                                                                                      
|+   |  | Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the quarter
ended June 30, 2003 (File No. 0-27662).                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|**  |  | Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the quarter
ended June 30, 1997 (File No. 0-27662).                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|¤   |  | Incorporated by reference to Exhibits 10.1 and 10.2 to our Form 10-Q for the quarter ended September 30, 1999
(File No. 0-27662).                                                                                                                    
|    |  |                                                                                                                                                                                                                                                      
|¤¤  |  | Incorporated by reference to Exhibit 10.3 to our Form 10-K for the year ended December 31, 1999 (File No. 0-27662).                                                                                                                                  
|    |  |                                                                                                                                                                                                                                                      
|#   |  | Incorporated by reference to Exhibit 10 to our Registration Statement on Form S-3 (No. 333-73828).                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|§§§ |  | Incorporated by reference to Exhibits 10.15 and 10.16 to our Form 10-K for the year ended December 31, 2001 (File No. 0-27662).                                                                                                                      
|    |  |                                                                                                                                                                                                                                                      
|##  |  | Incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K, dated as of June 14, 2002.                                                                                                                                              
|    |  |                                                                                                                                                                                                                                                      
|§   |  | Incorporated by reference to Exhibit 3.2 to our Form 10-K for the year ended December 31, 2002 (File No. 0-27662).                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|§§  |  | Incorporated by reference to Exhibit 4.2 to our filing on Form S-8 of July 15, 2003.                                                                                                                                                                 
|    |  |                                                                                                                                                                                                                                                      
|   |  | Management contract or compensatory plan, contract or arrangement.                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                      
|©   |  | These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(sub-sections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), and are not being filed as
exhibits to this report.