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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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FORM 10-Q


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

For the quarterly period ended: March 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)


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  þ  No  
o

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

The number of outstanding common shares par value U.S. $0.01 per share of IPC
Holdings, Ltd., as of April 29, 2003, was 48,179,805.

Exhibit Index Located on page 17



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TABLE OF CONTENTS



|                                                              |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                
|                                                              | Item 1. Financial Statements                                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                   
|                                                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|RESULTS OF OPERATIONS, QUARTERS ENDED MARCH 31, 2003 AND 2002
|LIQUIDITY AND CAPITAL RESOURCES                              
|                                                              | Item 3. Quantitative and Qualitative Disclosure about Market Risk                            
|                                                              | Item 4. Controls and Procedures                                                              
|PART II-OTHER INFORMATION                                    
|                                                              | Item 1. Legal Proceedings                                                                    
|                                                              | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                              | Item 3. Defaults upon Senior Securities                                                      
|                                                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                              | Item 5. Other Information                                                                    
|                                                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                   
|CERTIFICATIONS                                               
|EXHIBIT INDEX                                                
|EX-10.1: AMENDED UNDERWRITING AGENCY AGREEMENTS              
|EX-11.1: BASIC & DILUTED NET INCOME PER SHARE                



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PART I. FINANCIAL INFORMATION




Item 1. Financial Statements

IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


(Expressed in thousands of United States dollars, except for per share amounts)

|                                                                                                          |                                                                                     |   |                |           |                   |   |           |           | 
|--------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | - | -------------- | --------- | ----------------- | - | --------- | --------- | 
|                                                                                                          |                                                                                     |   | As of          |           | As of            
|                                                                                                          |                                                                                     |   | March 31, 2003 |           | December 31, 2002
|                                                                                                          |                                                                                     |   |                |           |                  
|                                                                                                          |                                                                                     |   | (unaudited)    |           | (audited)        
|ASSETS:                                                                                                   |                                                                                     |   |                |           |                   |   |           |          
|Fixed maturity investments:                                                                               |                                                                                     |   |                |           |                   |   |           |          
|                                                                                                          | Available for sale, at fair value
(amortized cost 2003 $1,184,129; 2002
$1,113,432) |   | $              | 1,229,039 |                   |   | $         | 1,153,609 | 
|Equity investments, available for sale at fair
value (cost 2003 $216,987; 2002: $216,815)                 |                                                                                     |   | 210,190        |           |                   |   | 216,897   |          
|Cash and cash equivalents                                                                                 |                                                                                     |   | 19,490         |           |                   |   | 16,656    |          
|Reinsurance premiums receivable                                                                           |                                                                                     |   | 137,390        |           |                   |   | 50,328    |          
|Deferred premiums ceded                                                                                   |                                                                                     |   | 7,471          |           |                   |   | 819       |          
|Loss and loss adjustment expenses recoverable                                                             |                                                                                     |   | 2,918          |           |                   |   | 405       |          
|Accrued investment income                                                                                 |                                                                                     |   | 25,539         |           |                   |   | 24,163    |          
|Deferred acquisition costs                                                                                |                                                                                     |   | 17,155         |           |                   |   | 6,095     |          
|Prepaid expenses and other assets                                                                         |                                                                                     |   | 7,576          |           |                   |   | 5,003     |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |           | 
|TOTAL ASSETS                                                                                              |                                                                                     | $ | 1,656,768      |           |                   | $ | 1,473,975 |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |          
|LIABILITIES:                                                                                              |                                                                                     |   |                |           |                   |   |           |          
|Reserve for losses and loss adjustment expenses                                                           |                                                                                     | $ | 118,171        |           |                   | $ | 119,355   |          
|Unearned premiums                                                                                         |                                                                                     |   | 166,127        |           |                   |   | 51,902    |          
|Reinsurance premiums payable                                                                              |                                                                                     |   | 9,363          |           |                   |   | 1,555     |          
|Deferred fees and commissions                                                                             |                                                                                     |   | 2,653          |           |                   |   | 127       |          
|Accounts payable and accrued liabilities                                                                  |                                                                                     |   | 11,217         |           |                   |   | 9,553     |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |          
|                                                                                                          |                                                                                     |   | 307,531        |           |                   |   | 182,492   |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |          
|SHAREHOLDERS EQUITY:                                                                                     |                                                                                     |   |                |           |                   |   |           |          
|Share capital (Common shares outstanding, par
value U.S. $0.01: 2003 48,179,805; 2002: 48,179,805 shares) |                                                                                     |   | 482            |           |                   |   | 482       |          
|Additional paid-in capital                                                                                |                                                                                     |   | 846,478        |           |                   |   | 846,397   |          
|Retained earnings                                                                                         |                                                                                     |   | 464,164        |           |                   |   | 404,345   |          
|Accumulated other comprehensive income                                                                    |                                                                                     |   | 38,113         |           |                   |   | 40,259    |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |          
|                                                                                                          |                                                                                     |   | 1,349,237      |           |                   |   | 1,291,483 |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |           | 
|TOTAL SHAREHOLDERS EQUITY AND LIABILITIES                                                                |                                                                                     | $ | 1,656,768      |           |                   | $ | 1,473,975 |          
|                                                                                                          |                                                                                     |   |                |           |                   |   |           |          

The accompanying notes are an integral part of these consolidated financial statements

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(Expressed in thousands of United States dollars, except for per share amounts)

|                                                   |  |                              |            |             |  |   |            |  
|-------------------------------------------------- |  | ---------------------------- | ---------- | ----------- |  | - | ---------- | -
|                                                   |  | Three months ended March 31,
|                                                   |  |                             
|                                                   |  | 2003                         |            | 2002       
|                                                   |  |                              |            |            
|                                                   |  | (unaudited)                  |            | (unaudited)
|REVENUES:                                          |  |                              |            |             |  |   |            |  
|Gross premiums written                             |  | $                            | 191,852    |             |  | $ | 147,048    |  
|Change in unearned premiums                        |  |                              | (114,225   | )           |  |   | (98,834    | )
|                                                   |  |                              |            |             |  |   |            |  
|Premiums earned                                    |  |                              | 77,627     |             |  |   | 48,214     |  
|                                                   |  |                              |            |             |  |   |            |  
|Reinsurance premiums ceded                         |  |                              | (9,979     | )           |  |   | (3,040     | )
|Change in deferred premiums ceded                  |  |                              | 6,652      |             |  |   | 1,237      |  
|                                                   |  |                              |            |             |  |   |            |  
|Premiums ceded                                     |  |                              | (3,327     | )           |  |   | (1,803     | )
|                                                   |  |                              |            |             |  |   |            |  
|Net premiums earned                                |  |                              | 74,300     |             |  |   | 46,411     |  
|Net investment income                              |  |                              | 11,525     |             |  |   | 11,882     |  
|Other income                                       |  |                              | 666        |             |  |   | 1,407      |  
|Net realized gains (losses) on investments         |  |                              | 3,726      |             |  |   | (767       | )
|                                                   |  |                              |            |             |  |   |            |  
|                                                   |  |                              | 90,217     |             |  |   | 58,933     |  
|                                                   |  |                              |            |             |  |   |            |  
|EXPENSES:                                          |  |                              |            |             |  |   |            |  
|Losses and loss adjustment expenses, net           |  |                              | 11,156     |             |  |   | 7,607      |  
|Acquisition costs, net                             |  |                              | 7,723      |             |  |   | 5,044      |  
|General and administrative expenses                |  |                              | 4,365      |             |  |   | 2,857      |  
|Exchange (gain)                                    |  |                              | (555       | )           |  |   | (82        | )
|                                                   |  |                              |            |             |  |   |            |  
|                                                   |  |                              | 22,689     |             |  |   | 15,426     |  
|                                                   |  |                              |            |             |  |   |            |  
|NET INCOME                                         |  | $                            | 67,528     |             |  | $ | 43,507     |  
|                                                   |  |                              |            |             |  |   |            |  
|Basic net income per common share                  |  | $                            | 1.40       |             |  | $ | 0.90       |  
|Diluted net income per common share                |  | $                            | 1.40       |             |  | $ | 0.90       |  
|Weighted average number of common shares  basic   |  |                              | 48,179,805 |             |  |   | 48,172,776 |  
|Weighted average number of common shares 
diluted |  |                              | 48,259,651 |             |  |   | 48,265,701 |  

The accompanying notes are an integral part of these consolidated financial statements

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of United States dollars)

|                                   |                                                                       |   |                              |        |             |   |         |         |  
|---------------------------------- | --------------------------------------------------------------------- | - | ---------------------------- | ------ | ----------- | - | ------- | ------- | -
|                                   |                                                                       |   | Three Months ended March 31,
|                                   |                                                                       |   |                             
|                                   |                                                                       |   | 2003                         |        | 2002       
|                                   |                                                                       |   |                              |        |            
|                                   |                                                                       |   | (unaudited)                  |        | (unaudited)
|NET INCOME                         |                                                                       | $ | 67,528                       |        |             | $ | 43,507  |        
|                                   |                                                                       |   |                              |        |             |   |         |        
|Other comprehensive (loss) income: |                                                                       |   |                              |        |             |   |         |        
|                                   | Net holding gains (losses) on
investments during period               |   |                              | 1,580  |             |   |         | (15,255 | )
|                                   | Reclassification adjustment for
(gains) losses included in net
income |   |                              | (3,726 | )           |   |         | 767     |  
|                                   |                                                                       |   |                              |        |             |   |         |        
|                                   |                                                                       |   | (2,146                       | )      |             |   | (14,488 | )      
|                                   |                                                                       |   |                              |        |             |   |         |        
|COMPREHENSIVE INCOME               |                                                                       | $ | 65,382                       |        |             | $ | 29,019  |        
|                                   |                                                                       |   |                              |        |             |   |         |        

The accompanying notes are an integral part of these consolidated financial statements

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States dollars)

|                                                                              |                                                         |                                                 |          |                              |         |             |          |       |         |  
|----------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------------------------------------- | -------- | ---------------------------- | ------- | ----------- | -------- | ----- | ------- | -
|                                                                              |                                                         |                                                 |          | Three months ended March 31,
|                                                                              |                                                         |                                                 |          |                             
|                                                                              |                                                         |                                                 |          | 2003                         |         | 2002       
|                                                                              |                                                         |                                                 |          |                              |         |            
|                                                                              |                                                         |                                                 |          | (unaudited)                  |         | (unaudited)
|CASH FLOWS FROM OPERATING ACTIVITIES:                                         |                                                         |                                                 |          |                              |         |             |          |      
|Net income                                                                    |                                                         | $                                               | 67,528   |                              |         | $           | 43,507   |      
|Adjustments to reconcile net income to cash provided
by operating activities: |                                                         |                                                 |          |                              |         |             |          |      
|                                                                              | Amortization of fixed maturity premiums (discount),
net |                                                 |          | 3,354                        |         |             |          | 1,703 |        
|                                                                              | Net realized (gains) losses on investments              |                                                 |          | (3,726                       | )       |             |          | 767   |        
|                                                                              | Stock option compensation                               |                                                 |          | 81                           |         |             |          | 0     |        
|                                                                              | Changes in:                                             |                                                 |          |                              |         |             |          |       |        
|                                                                              |                                                         | Reinsurance premiums receivable                 |          |                              | (87,062 | )           |          |       | (68,071 | )
|                                                                              |                                                         | Deferred premiums ceded                         |          |                              | (6,652  | )           |          |       | (1,237  | )
|                                                                              |                                                         | Loss and loss adjustment expenses recoverable   |          |                              | (2,513  | )           |          |       | 121     |  
|                                                                              |                                                         | Accrued investment income                       |          |                              | (1,376  | )           |          |       | (1,409  | )
|                                                                              |                                                         | Deferred acquisition costs                      |          |                              | (11,060 | )           |          |       | (10,611 | )
|                                                                              |                                                         | Prepaid expenses and other assets               |          |                              | (2,573  | )           |          |       | (2,657  | )
|                                                                              |                                                         | Reserve for losses and loss adjustment expenses |          |                              | (1,184  | )           |          |       | (21,937 | )
|                                                                              |                                                         | Unearned premiums                               |          |                              | 114,225 |             |          |       | 98,834  |  
|                                                                              |                                                         | Reinsurance premiums payable                    |          |                              | 7,808   |             |          |       | 1,498   |  
|                                                                              |                                                         | Deferred fees and commissions                   |          |                              | 2,526   |             |          |       | (17     | )
|                                                                              |                                                         | Accounts payable and accrued liabilities        |          |                              | 1,664   |             |          |       | 2,161   |  
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|Cash provided by operating activities                                         |                                                         |                                                 | 81,040   |                              |         |             | 42,652   |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         |                                                         |                                                 |          |                              |         |             |          |      
|Purchases of fixed maturity investments                                       |                                                         |                                                 | (300,366 | )                            |         |             | (414,493 | )    
|Proceeds from sale of fixed maturity investments                              |                                                         |                                                 | 194,145  |                              |         |             | 138,405  |      
|Proceeds from maturities of fixed maturity investments                        |                                                         |                                                 | 35,896   |                              |         |             | 0        |      
|Purchases of equity investments                                               |                                                         |                                                 | (172     | )                            |         |             | (54,359  | )    
|Proceeds from sale of equity investments                                      |                                                         |                                                 | 0        |                              |         |             | 227      |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|Cash used in investing activities                                             |                                                         |                                                 | (70,497  | )                            |         |             | (330,220 | )    
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|CASH FLOWS FROM FINANCING ACTIVITES:                                          |                                                         |                                                 |          |                              |         |             |          |      
|Cash dividends paid to shareholders                                           |                                                         |                                                 | (7,709   | )                            |         |             | 0        |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|Cash used by financing activities                                             |                                                         |                                                 | (7,709   | )                            |         |             | 0        |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|Net increase (decrease) in cash and cash equivalents                          |                                                         |                                                 | 2,834    |                              |         |             | (287,568 | )    
|Cash and cash equivalents, beginning of period                                |                                                         |                                                 | 16,656   |                              |         |             | 315,207  |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      
|Cash and cash equivalents, end of period                                      |                                                         | $                                               | 19,490   |                              |         | $           | 27,639   |      
|                                                                              |                                                         |                                                 |          |                              |         |             |          |      

The accompanying notes are an integral part of these consolidated financial statements

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of United States dollars, except for per share amounts)
(unaudited)

1. GENERAL:



| | The consolidated interim financial statements presented herein have been
prepared on the basis of accounting principles generally accepted in the
United States of America (GAAP) and include the accounts of IPC
Holdings, Ltd. (the Company), and its wholly owned subsidiaries, IPCRe
Limited (IPCRe) and IPCRe Underwriting Services Limited (IPCUSL and,
together with the Company and IPCRe, IPC) and IPCRe Europe Limited,
which is a wholly-owned subsidiary of IPCRe. In the opinion of
management, these financial statements reflect all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations for the three month periods
ended March 31, 2003 and 2002, respectively, the balance sheet as of
March 31, 2003 and the cash flows for the three month periods ended
March 31, 2003 and 2002, respectively. These interim consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements for the year ended December 31, 2002,
incorporated by reference in our report on Form 10-K. The results of
operations for any interim period are not necessarily indicative of
results for the full year.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2. DIVIDENDS:



| | On March 5, 2003 we paid a dividend of $0.16 per share to shareholders of
record on February 19, 2003.                             
| | -----------------------------------------------------------------------------------------------------------------------------------
|
| | On April 22, 2003 we declared a dividend of $0.16 per share, payable on June
26th, 2003 to shareholders of record on June 10, 2003.

3. ACCOUNTING FOR STOCK-BASED
COMPENSATION AND DISCLOSURE:



| | On December 31, 2002, the Financial Accounting Standards Board (FASB)
issued Statement No. 148, Accounting for Stock-Based Compensation and
Disclosure (SFAS 148), which is effective for fiscal years ending after
December 31, 2002. SFAS 148 amends SFAS 123, to provide alternative methods
of transition for a voluntary change to the fair value method of accounting
for stock-based employee compensation. In addition, SFAS 148 amends
disclosure requirements of SFAS 123 to require prominent disclosure about the
method of accounting for stock based employee compensation and the effect of
the method used to report results. SFAS 148 permits two additional
transition methods for entities that adopt the preferable fair value method
of accounting for stock-based employee compensation. In addition, the
original prospective method of transition for changes to the fair value
method under SFAS 123 will no longer be permitted in fiscal periods beginning
after December 15, 2003. Management has adopted the fair value method of
accounting for stock-based employee compensation on a prospective basis for
all awards granted, modified or settled after January 1, 2003. The amount
of the charge recorded in the three months ended March 31, 2003 was $81.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



| | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The following is a summary of the accounting policies for the three main
components of our balance sheet and statement of income: premiums, losses
(claims) including reserves and investments/investment income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | Premiums                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Premiums are recorded as written at the beginning of each policy, based upon
information received from ceding companies and their brokers, and are earned
over the policy period. For excess of loss contracts, the amount of premium
is contractually documented at inception, and no management judgement is
necessary in accounting for this. Premiums are earned on a pro rata basis
over the policy period. For proportional treaties, the amount of premium is
normally estimated at inception by the ceding company. We account for such
premium using the initial estimates, which are reviewed regularly with
respect to the actual premium reported by the ceding company. For the
quarter ended March 31, 2003 the net amount of premium written resulting from
estimate accruals was approximately 6% of total premiums written. We also
accrue for reinstatement premiums (premiums paid to reinstate reinsurance
coverage following a claim). Such accruals are based upon actual
contractual terms applied to the amount of loss reserves expected to be paid,
and the only element of management judgement involved is with respect to the
amount of loss reserves, as described below. The amount accrued at March 31,
2003 for reinstatement premiums on Reported But Not Enough losses (RBNE)
and Incurred But Not Reported (IBNR) loss reserves was $2.2 million, the
majority of which related to claims from the terrorist attack on the World
Trade Center.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | Loss Reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Under accounting principles generally accepted 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. As a result, only loss reserves
applicable to losses incurred up to the reporting date may be established,
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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | Estimating appropriate loss reserves for catastrophes is an inherently
uncertain process. Loss reserves represent our estimates, at a given point
in time, of ultimate settlement and administration costs of losses incurred
(including IBNR losses). We regularly review and update these estimates,
using the most current information available to us. Consequently, the
ultimate liability for a catastrophic loss is likely to differ from the
original estimate. Whenever we determine that any existing loss reserves are
inadequate, we are required to increase the loss reserves with a
corresponding reduction, which could be material, in our operating results in
the period in which the deficiency is identified. The establishment of new
reserves, or the adjustment of reserves for reported claims, could result in
significant upward or downward changes to our financial condition or results
of operations in any particular period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | The reserve for losses and loss adjustment expenses is based upon reports
from industry sources, individual case estimates received from ceding
companies, output from commercially available catastrophe loss models and
managements estimates. When a catastrophic event occurs, we first determine
which treaties may be affected using our geographic database of exposures.
We then contact the respective brokers and ceding companies involved with
those treaties, to determine their estimate of involvement and the extent to
which the reinsurance program is affected. We may also use computer modeling
to measure and estimate loss exposure under the actual event scenario, if
available. Since 1993, we have contracted Applied Insurance Research, Inc.
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.
Once an event occurs, we establish a specific reserve for that event, based
upon estimates of total losses incurred by the ceding insurers as a result of
the event and a specific estimate of the portion of such loss we have
reinsured. Managements estimates are used mostly for IBNR or RBNE loss
amounts. For certain catastrophic events there is considerable uncertainty
underlying the assumptions and associated estimated reserves for losses and
loss adjustment expenses. Reserves are reviewed regularly and, as experience
develops and additional information becomes known, the reserves are adjusted
as necessary. Such adjustments, if necessary, are reflected in results of
operations in the period in which they become known. For excess of loss
business, which is generally over 90% of the premium we write, we are aided
by the fact that each treaty has a defined limit of liability arising from
one event. Once that limit has been reached, we have no further exposure to
additional losses from that treaty for the same event. For proportional
treaties, we generally use an initial estimated loss and loss expense ratio
(the ratio of losses and loss adjustment expenses incurred to premiums
earned), based upon information provided by the ceding company and our
historical experience of that treaty, if any. The estimate is adjusted as
actual experience becomes known.
|
| | At March 31, 2003 managements estimates for IBNR/RBNE represented
approximately 34.5% of total loss reserves. The majority of the estimate
related to reserves for claims from the attack on the World Trade Center, the
floods which                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

7



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| | affected central and eastern Europe in August 2002, Tropical Storm Allison
which affected parts of Texas in June 2001 and reserves for proportional
treaties. In accordance with IPCRes registration under the Bermuda
Insurance Act 1978 and Related Regulations (the Insurance Act), the loss
reserves are certified annually by an independent loss reserve specialist.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Investments
| | -----------



| | In accordance with our investment guidelines, our investments consist of
certain marketable equity securities and high-grade marketable fixed income
securities. Investments are carried at fair value as determined by the most
recently traded price of each security at the balance sheet date. In
accordance with SFAS 115, unrealized gains and losses are included within
Accumulated Other Comprehensive Income as a separate component of
Shareholders Equity. Realized gains and losses on sales of investments are
determined on a first-in, first-out basis. Investment income is recorded
when earned and includes the amortization of premiums and discounts on
investments.                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 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                                                               



| | At March 31, 2003 our equity investments comprised three mutual funds: a U.S.
equity fund, a global equity growth fund and a fund with attributes similar
to those of the S & P 500 Index. None of the funds have a significant
concentration in any business sector; accordingly, the value of our equity
funds is principally influenced by macro economic factors rather than
issuer-specific factors. Our investment in mutual funds is subject to the
same analyses as described above for the determination of
other-than-temporary declines in value. Since there is a portfolio of
securities within a mutual fund, the qualitative issues are usually broader
than those for individual securities and therefore the assessment of
impairment is inherently more difficult and requires more management
judgement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | At March 31, 2003 we determined that there was no other-than-temporary
impairment of securities. At March 31, 2003 we did not hold any securities
that are not investment grade, not rated or not traded on a recognized
exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         






| | RESULTS OF OPERATIONS, QUARTERS ENDED MARCH 31, 2003 AND 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The following is a discussion of the results of operations and financial
position of IPC Holdings, Ltd. References to we, our or IPC mean
IPC Holdings together with its wholly-owned subsidiaries, IPCRe and
IPCUSL. This discussion should be read in conjunction with our
Consolidated Financial Statements and related notes for the three months
ended March 31, 2003.                                                                                                                                                                                                                                    
|
| | Our net income for the quarter ended March 31, 2003 was $67.5 million,
compared to $43.5 million for the first quarter of 2002, an increase of 55%.
Our net operating income, which is net income less net realized gains and
losses from investments, for the quarter ended March 31, 2003 was $63.8
million, compared to $44.3 million for the first quarter of 2002, an increase
of 44%. This increase is primarily the result of the significant increase in
premiums, as discussed below.                                                                                                                       
|
| | In the quarters ended March 31, 2003 and 2002, we wrote premiums of
$191.9 million and $147.0 million, respectively, an increase of 30%.
Written premiums in the quarter were higher primarily because we wrote
additional business for our existing clients, as well as new business.
Premiums were also higher because of increases in premium rates, which
were generally in the range of 5% to 10% for loss-free contracts, and
greater increases for loss-impacted contracts affected by the summer
flood losses in Eastern and Central Europe and fires in Canada. The
additional premium from existing clients

8



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##### Table of Contents





| | resulting from additional business written, rate increases and foreign
exchange rate differences amounted to approximately $24.0 million. Premiums
from new business amounted to $21.2 million. These increases were partly
offset by business which was not renewed because of unsatisfactory terms and
conditions, which totaled approximately $8.1 million. Adjustment premiums,
which are adjustments generally arising from differences between cedents
actual premium income and the original estimates thereof, were $4.1 million
higher in the first quarter of 2003 compared to the first quarter of 2002.
Reinstatement premiums were $3.6 million higher in the first quarter of 2003
in comparison to the corresponding quarter in 2002, primarily because of
adjustments (as described above) being applied to reinstatement premiums. We
retroceded premiums of $10.0 million in the first quarter of 2003, compared
to $3.0 million ceded in the first quarter of 2002. The increase reflects
increased cessions to our Property Catastrophe Aggregate Excess of Loss
facility, as well as the increase in retrocedents participation for our
proportional reinsurance facility, which has increased from 37% in 2002 to
60% in 2003. Net premiums earned in the three months ended March 31, 2003
were $74.3 million, compared to $46.4 million in the same period in 2002, an
increase of 60%. Earned premiums were higher due to the increase in written
premiums over the past twelve months, as well as the fact that reinstatement
premiums and adjustment premiums are fully earned when written.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Net investment income was $11.5 million in the quarter ended March 31,
2003, compared to $11.9 million for the quarter ended March 31, 2002.
The overall yield of the fixed income portfolio was less for the quarter
ended March 31, 2003 than for the corresponding quarter in 2002, due to
lower interest rates and their impact on the reinvestment of maturing
fixed income securities. This negative factor was offset in part by the
increase in the average balance of invested assets in the first quarter
of 2003, which was 14% higher than the first quarter of 2002, because of
positive operating cash flow in the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | There was a net realized gain from investments in the quarter ended March
31, 2003 of $3.7 million, compared to a net realized loss of $(0.8)
million in the first quarter of 2002. Generally, net realized gains and
losses fluctuate from period to period, depending on the individual
securities sold, as recommended by IPCRes investment advisor. The loss
for the first quarter 2002 included a write-down of $1.3 million in the
cost basis of certain stocks where management had determined there had
been a decline in value which was other than temporary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | In the three months ended March 31, 2003, we incurred losses of $11.2
million, compared to $7.6 million in the first quarter of 2002. Losses in
the quarter ended March 31, 2003 included approximately $5.9 million in
respect of an increase in the ultimate expected losses for Tropical Storm
Allison which took place in June, 2001. This was the result of a recent
unfavourable court ruling, regarding an insurance policy coverage dispute
between a cedant and the original insured under the policy, for which first
notice of loss was provided to us on March 28, 2003. We also established a
$3.0 million net reserve ($5.5 million gross) for claims arising from
bush-fires which occurred in Australia in January of this year. Our loss and
loss expense ratio (the ratio of losses and loss adjustment expenses to
premiums earned) was 15.0% in the first quarter of 2003, compared to 16.4% in
the first quarter of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | Acquisition costs incurred, which consist primarily of commissions and
brokerage fees paid to intermediaries for the production of business,
were $7.7 million for the quarter ended March 31, 2003, compared to $5.0
million in the corresponding period of 2002, an increase of 54%.
Acquisition costs have increased primarily because of the increase in
earned premiums. General and administrative expenses were $4.4 million
in the quarter ended March 31, 2003, compared to the $2.9 million
incurred in the first quarter of 2002. This increase is due primarily
to an increase in administrative fees which are based on earned
premiums, as well as some increases for certain operating expenses,
including salaries and benefits, which include the impact of expensing
stock options granted to certain officers in January 2003, the increased
cost of Directors and Officers liability insurance and increased fees
for auditors and lawyers because of increased corporate governance
requirements under the Sarbanes-Oxley Act of 2002. IPCs expense ratio
(the ratio of acquisition costs plus general and administrative expenses
to premiums earned) was 16.3% for the quarter ended March 31, 2003
compared to 17.0% for the quarter ended March 31, 2002.                                                                                                                                                                                                                                                                                                                                      
|
| | The following table summarizes the loss and loss expense ratio, expense ratio
and combined ratio (sum of loss and loss expense ratio, plus expense ratio)
for the quarters ended March 31, 2003 and 2002, respectively:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                          |  |                         |      |      |  |  |      |  
|------------------------- |  | ----------------------- | ---- | ---- |  |  | ---- | -
|                          |  | Quarter ended March 31,
|                          |  |                        
|                          |  | 2003                    |      | 2002
|                          |  |                         |      |     
|Loss & loss expense ratio |  |                         | 15.0 | %    |  |  | 16.4 | %
|Expense ratio             |  |                         | 16.3 | %    |  |  | 17.0 | %
|Combined ratio            |  |                         | 31.3 | %    |  |  | 33.4 | %



| | Diluted book value per share (shareholders equity divided by the number of
shares outstanding and equivalents thereof) at March 31, 2003 was $27.96,
compared to $26.75 at December 31, 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






| | LIQUIDITY AND CAPITAL RESOURCES                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | IPC Holdings is a holding company that conducts no reinsurance operations of
its own. Its cash flows are limited to distributions from IPCRe and IPCUSL
by way of loans or dividends. The dividends that IPCRe may pay are limited

9



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| | under Bermuda legislation and IPCRes revolving credit facility. The Bermuda
Insurance Act of 1978, and subsequent amendments thereto, require IPCRe to
maintain a minimum solvency margin and a minimum liquidity ratio. The
maximum dividend payable by IPCRe in accordance with Bermuda regulations as
of March 31, 2003 was approximately $331 million. The maximum amount IPCRe
could have paid in the first quarter under the terms of the credit facility
was $156.5 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | IPCRes sources of funds consist of premiums written, investment income, paid
losses recovered from retrocedants and proceeds from sales and redemptions of
investments. Cash is used primarily to pay losses and loss adjustment
expenses, premiums retroceded, brokerage commissions, excise taxes, general
and administrative expenses and dividends. The potential for a large
catastrophe means that unpredictable and substantial payments may need to be
made within relatively short periods of time, and therefore our cash flows
fluctuate significantly from period to period.                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Net cash flows from operating activities in the quarter ended March 31, 2003
were $81.0 million compared to $42.7 million in the first quarter of 2002.
The increase is primarily the result of the significant increase in premium
volume, combined with a reduction in claims paid during the period, which
were $15.6 million in the quarter ended March 31, 2003, compared to $28.6
million in the first quarter of 2002. A significant proportion of the claims
paid in 2003 relate to the attack on the World Trade Center. We expect to
continue to pay significant amounts in respect of that event during the next
six to nine months.                                                                                                                                                                                                                                                                                                                              
|
| | Net cash outflows from investing activities in the three months ended March
31, 2003 were $70.5 million. Cash and cash equivalents increased by $2.8
million in the three months ended March 31, 2003, resulting in a balance of
$19.5 million at March 31, 2003. At March 31, 2003, 41.8% of IPCs fixed
maturity investment portfolio (based on fair value) was held in cash, United
States Government/Agency issues and in securities rated AAA, and 34.7% was
held in securities rated AA. The average modified duration of IPCs fixed
maturity portfolio was 2.5 years. We believe that IPCRes $150 million
revolving credit facility which expires in June 2003, and the relatively
short duration and high quality of IPCs investment portfolio, will provide
sufficient liquidity to meet IPCs cash demands.                                                                                                                                                     
|
| | IPCRe is not a licensed insurer in the United States and therefore, under the
terms of most of its contracts with U.S.-based companies, must provide
security to reinsureds to cover unpaid liabilities in a form acceptable to
state insurance commissioners. Typically, this type of security takes the
form of a letter of credit issued by an acceptable bank, the establishment of
a trust, or a cash advance. Currently IPCRe obtains letters of credit
through one commercial bank pursuant to a $100.0 million facility. In turn,
IPCRe provides the bank security by giving the bank a lien over certain of
IPCRes investments in an amount not to exceed the aggregate letters of
credit outstanding to a maximum of $118.0 million. At March 31, 2003, there
were outstanding letters of credit of $63.2 million. If we were unable to
obtain the necessary credit, IPCRe could be limited in its ability to write
business for our clients in the United States.
|
| | Our investment portfolio does not currently include options, warrants, swaps,
collars or similar derivative instruments. 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, only as part of a defensive strategy to protect the market
value of the portfolio. Also, our portfolio does not contain any investments
in real estate or mortgage loans. Neither the Company nor any of its
subsidiaries has any other forms of off-balance sheet arrangements, or cash
obligations or commitments.                                                                                                                                                                                                                                                                                                                      
|
| | Neither the Company, IPCRe nor IPCUSL have any material commitments for
capital expenditures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | Transactions with Non-Independent Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | The following is a summary of amounts in respect of significant
non-independent party transactions during the three month periods ended March
31, 2003 and March 31, 2002, respectively, (expressed in thousands of U.S.
dollars):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                     |  |                |        |                |  |   |        | 
|-------------------------------------------------------------------- |  | -------------- | ------ | -------------- |  | - | ------ | 
|                                                                     |  | March 31, 2003 |        | March 31, 2002
|                                                                     |  |                |        |               
|Administrative services fees (included in General & Admin.
expenses) |  | $              | 1,943  |                |  | $ | 1,214  | 
|Investment fees netted against investment income:                    |  | $              | 742    |                |  | $ | 636    | 
|Underwriting services fee income (included in Other income)          |  | $              | 666    |                |  | $ | 1,407  | 
|Premiums written                                                     |  | $              | 29,271 |                |  | $ | 28,584 | 
|Premiums ceded                                                       |  | $              | 476    |                |  | $ | 305    | 



| | Underwriting services fee income is a percentage of the premiums written on
behalf of one client, which is related to shareholders of the Company. Fees
are accrued and taken into income based on the premiums earned each quarter.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



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##### Table of Contents





| | In addition, IPCRe assumes premiums through brokers related to shareholders
of the Company. Generally, such premiums represent less than 5% of total
premiums assumed. Brokerage fees incurred on such premiums are generally 10%
of the premium.                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | For a discussion of certain of our contractual relationships with
non-independent parties, please see Certain Relationships and Related
Transactions in our definitive Proxy Statement on Schedule 14A, filed with
the Securities and Exchange Commission on April 28, 2003 and incorporated by
reference into our Form 10-K for the year ended December 31, 2002.
|
| | All transactions with related parties are conducted at arms length, with
normal terms and conditions applicable. Neither the Company nor any of its
subsidiaries have entered into any other significant transactions with
non-independent parties.                                                                                                                




Item 3. Quantitative and Qualitative Disclosure about Market Risk



| | The investment portfolio of IPCRe is exposed to market risk. Market risk is
the risk of loss of fair value resulting from adverse fluctuations in
interest rates, foreign currency exchange rates and equity prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Measuring potential losses in fair values has become the focus of risk
management efforts by many companies. Such measurements are performed
through the application of various statistical techniques. One such
technique is Value at Risk (VaR). VaR is a summary statistical measure
that uses historical interest and foreign currency exchange rates and equity
prices and estimates of the volatility and correlation of each of these rates
and prices to calculate the maximum loss that could occur within a given
statistical confidence level and time horizon.                                                                                                                                                                                                                                                                 
|
| | We believe that statistical models alone do not provide a reliable method of
monitoring and controlling market risk. While VaR models are relatively
sophisticated, the quantitative market risk information is limited by the
assumptions and parameters established in creating the related models.
Therefore, such models are tools and do not substitute for the experience or
judgement of senior management.                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | Our investment managers performed a VaR analysis to estimate the maximum
potential loss of fair value for each segment of market risk for our
investment portfolio, as of March 31, 2003 and December 31, 2002. The
analysis calculated the VaR with respect to the net fair value of our
financial instrument assets, which includes cash and cash equivalents,
certain equity and high grade fixed maturity securities, as of March 31, 2003
using historical simulation methodology. As of March 31, 2003 the VaR of
IPCRes investment portfolio was approximately $17.2 million, which
represents a 95th percentile value change over a one-month time horizon.
This result was obtained through historical simulation using approximately
750 days (3 years) of historical interest rate, foreign exchange rate and
equity market data.
|
| | The following table presents the VaR of each component of market risk of
IPCRes investment portfolio as of March 31, 2003 and December 31, 2002,
respectively, and the average for the three months ended March 31, 2003
calculated using the beginning and ending points (expressed in thousands of
U.S. dollars):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|                        |  |           |        |              |  |                   |         |   |  |   |        |  
|----------------------- |  | --------- | ------ | ------------ |  | ----------------- | ------- | - |  | - | ------ | -
|                        |  |           |        |              |  | Average for three
|                        |  | March 31, |        | December 31, |  | months ended     
|Market Risk             |  | 2003      |        | 2002         |  | March 31, 2003   
|                        |  |           |        |              |  |                  
|Currency                |  | $         | 1,042  |              |  | $                 | 1,093   |   |  | $ | 1,067  |  
|Interest Rate           |  |           | 7,193  |              |  |                   | 7,938   |   |  |   | 7,565  |  
|Equity                  |  |           | 18,393 |              |  |                   | 18,397  |   |  |   | 18,395 |  
|                        |  |           |        |              |  |                   |         |   |  |   |        |  
|Sum of Risk             |  |           | 26,628 |              |  |                   | 27,428  |   |  |   | 27,027 |  
|Diversification Benefit |  |           | (9,434 | )            |  |                   | (10,102 | ) |  |   | (9,767 | )
|                        |  |           |        |              |  |                   |         |   |  |   |        |  
|Total Net Risk          |  | $         | 17,194 |              |  | $                 | 17,326  |   |  | $ | 17,260 |  
|                        |  |           |        |              |  |                   |         |   |  |   |        |  



| | IPCRes premiums receivable and liabilities for losses from reinsurance
contracts it has written, are also exposed to the risk of changes in value
resulting from adverse fluctuations in foreign currency exchange rates. To
an extent, the impact on loss reserves of a movement in an exchange rate,
will be partly offset by the impact on assets (receivables and
cash/investments) denominated in the same currency, or vice versa. As of
March 31, 2003 an estimated 36% or $50 million (March 31, 2002 - 30% or $33
million) of reinsurance premiums receivable, and an estimated $30 million
(March 31, 2002 - $24 million) of loss reserves, were denominated in non-U.S.
currencies. In addition, we held U.S.$3.3 million of Australian dollar cash
deposits which are to be used to settle hailstorm claims from 1999.
Accordingly, we do not believe that the impact of exchange rate movements in
respect of receivables or loss reserves on our overall VaR as of March 31,
2003 to be material.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 4. Controls and Procedures



| | Within the 90-day period prior to the filing of this report, an evaluation
was carried out under the supervision and with the participation of the
Company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-14(c) under the
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



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| | Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note on Forward-Looking Statements



| | 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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##### Table of Contents






PART IIOTHER INFORMATION




Item 1.             Legal Proceedings

NONE




Item 2.             Changes in Securities and Use of Proceeds

NONE




Item 3.             Defaults upon Senior Securities

NONE




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

NONE




Item 5.             Other Information

NONE




Item 6.             Exhibits and Reports on Form 8-K

| |  |                                                                                                                                                                                            
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) Exhibits                                                                                                                                                                               
| |  |                                                                                                                                                                                            
| |  | Unless otherwise indicated, exhibits are incorporated by
reference to the corresponding numbered exhibits to the Companys
Registration Statement on Form S-1 (Registration No. 333-00088).

|        |                         |             |                                                                                                     |                                                                                                   
|------- | ----------------------- | ----------- | --------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------
|Exhibit |                         |            
|Number  |                         | Description
|        |                         |            
|        | 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                                                   
|        |                         |             |                                                                                                     |                                                                                                   
|        | 10.1                    | o           |                                                                                                     | Amendments to
underwriting agency agreements between Allied World Assurance Company
Ltd and IPCUSL
|        | 11.1                    | o           |                                                                                                     | Reconciliation of basic and diluted net income per common share (EPS).                          
|        |                         |             |                                                                                                     |                                                                                                   
|        |                         | o           | Filed herewith                                                                                     
|        |                         |             |                                                                                                     |                                                                                                   
|        |                         | +           | Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-3 (No. 333-73828).
|        |                         |             |                                                                                                     |                                                                                                   
|        | (b) Reports on Form 8-K
|        |                         |             |                                                                                                     |                                                                                                   
|
|        | None                   

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##### Table of Contents



IPC HOLDINGS, LTD.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|     |  |                  |  |                                                                
|---- |  | ---------------- |  | ---------------------------------------------------------------
|     |  |                  |  | IPC Holdings, Ltd.
(Registrant)                                
|     |  |                  |  |                                                                
|     |  |                  |  |                                                                
|Date |  | April 29th, 2003 |  | /s/ James P. Bryce                                             
|     |  |                  |  |                                                                
|     |  |                  |  | James P. Bryce
President and Chief Executive Officer           
|     |  |                  |  |                                                                
|Date |  | April 29th, 2003 |  | /s/ John R. Weale                                              
|     |  |                  |  |                                                                
|     |  |                  |  | John R. Weale
Senior Vice President and Chief Financial Officer

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##### Table of Contents






CERTIFICATIONS

I, James P. Bryce, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IPC Holdings, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: April 29, 2003

| |  |                         | 
| |  | ----------------------- | 
| |  | /s/ James P. Bryce      | 
| |  |                         | 
| |  | James P.
Bryce          | 
| |  | Chief Executive Officer | 

15



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##### Table of Contents



I, John R. Weale, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IPC Holdings, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: April 29, 2003

| |                         | 
| | ----------------------- | 
| | /s/ John R. Weale       | 
| |                         | 
| | John R.
Weale           | 
| | Chief Financial Officer | 

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##### Table of Contents






EXHIBIT INDEX

Unless otherwise indicated, exhibits are incorporated by reference to the
corresponding numbered exhibits to the Companys Registration Statement on
Form S-1 (Registration No. 333-00088).

|        |      |             |                                                                                                     |                                                                                                    
|------- | ---- | ----------- | --------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 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                                                    
|        |      |             |                                                                                                     |                                                                                                    
|        | 10.1 | o           |                                                                                                     | Amendments to
underwriting agency agreements between Allied World Assurance Company
Ltd and IPCUSL.
|        |      |             |                                                                                                     |                                                                                                    
|        | 11.1 | o           |                                                                                                     | Reconciliation of basic and diluted net income per common share (EPS)                            
|        |      |             |                                                                                                     |                                                                                                    
|        |      | o           | Filed herewith                                                                                     
|        |      |             |                                                                                                     |                                                                                                    
|        |      | +           | Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-3 (No. 333-73828).

17