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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

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



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IPC Holdings, Ltd.

(Exact name of registrant as specified in its charter)



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



|                                                                     |  |           
|-------------------------------------------------------------------- |  | ----------
|American International Building, 29 Richmond Road, Pembroke, Bermuda |  | HM 08     
|(Address of principal executive offices)                             |  | (Zip Code)

(441) 298-5100

(Registrants telephone number, including area code)



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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.    x  Yes ̈No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.

x  Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). ̈Yes    x  No

The number of outstanding common shares, par value U.S. $0.01 per share of IPC Holdings, Ltd., as of July 30, 2007 was 60,466,762.



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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)



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|                                                                                                                                       |  |                    |           |   |                        |   |          
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | - | ---------------------- | - | ---------
|                                                                                                                                       |  | As ofJune 30, 2007 |           |   | As ofDecember 31, 2006
|                                                                                                                                       |  | (unaudited)        |           |   |                       
|ASSETS:                                                                                                                                |  |                    |           |   |                        |   |          
|Fixed maturity investments, at fair value (amortized cost 2007: $1,785,964; 2006: $1,808,917)                                          |  | $                  | 1,774,705 |   |                        | $ | 1,819,561
|Equity investments, at fair value (cost 2007: $476,863; 2006: $460,197)                                                                |  |                    | 625,865   |   |                        |   | 577,549  
|Cash and cash equivalents                                                                                                              |  |                    | 35,948    |   |                        |   | 88,415   
|Reinsurance premiums receivable                                                                                                        |  |                    | 219,208   |   |                        |   | 113,811  
|Deferred premiums ceded                                                                                                                |  |                    | 7,973     |   |                        |   | 2,823    
|Losses and loss adjustment expenses recoverable                                                                                        |  |                    | 25,572    |   |                        |   | 1,989    
|Accrued investment income                                                                                                              |  |                    | 28,243    |   |                        |   | 28,469   
|Deferred acquisition costs                                                                                                             |  |                    | 22,876    |   |                        |   | 9,551    
|Prepaid expenses and other assets                                                                                                      |  |                    | 4,429     |   |                        |   | 3,261    
|                                                                                                                                       |  |                    |           |   |                        |   |          
|TOTAL ASSETS                                                                                                                           |  | $                  | 2,744,819 |   |                        | $ | 2,645,429
|                                                                                                                                       |  |                    |           |   |                        |   |          
|                                                                                                                                       |  |                   
|LIABILITIES:                                                                                                                           |  |                    |           |   |                        |   |          
|Reserve for losses and loss adjustment expenses                                                                                        |  | $                  | 536,019   |   |                        | $ | 548,627  
|Unearned premiums                                                                                                                      |  |                    | 212,441   |   |                        |   | 80,043   
|Reinsurance premiums payable                                                                                                           |  |                    | 9,889     |   |                        |   | 4,680    
|Deferred fees and commissions                                                                                                          |  |                    | 1,347     |   |                        |   | 1,150    
|Accounts payable and accrued liabilities                                                                                               |  |                    | 19,693    |   |                        |   | 19,974   
|                                                                                                                                       |  |                    |           |   |                        |   |          
|TOTAL LIABILITIES                                                                                                                      |  |                    | 779,389   |   |                        |   | 654,474  
|                                                                                                                                       |  |                    |           |   |                        |   |          
|                                                                                                                                       |  |                   
|SHAREHOLDERS EQUITY:                                                                                                                  |  |                    |           |   |                        |   |          
|Common shares outstanding, par value U.S. $0.01: 2007: 60,659,489; 2006: 63,706,567 shares                                             |  |                    | 607       |   |                        |   | 637      
|Preferred shares  Series A mandatory convertible preferred shares outstanding, par value U.S. $0.01: 2007: 9,000,000; 2006: 9,000,000 |  |                    | 90        |   |                        |   | 90       
|Additional paid-in capital                                                                                                             |  |                    | 1,403,434 |   |                        |   | 1,474,092
|Retained earnings                                                                                                                      |  |                    | 561,985   |   |                        |   | 388,826  
|Accumulated other comprehensive (loss) income                                                                                          |  |                    | (686      | ) |                        |   | 127,310  
|                                                                                                                                       |  |                    |           |   |                        |   |          
|TOTAL SHAREHOLDERS EQUITY                                                                                                             |  |                    | 1,965,430 |   |                        |   | 1,990,955
|                                                                                                                                       |  |                    |           |   |                        |   |          
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                             |  | $                  | 2,744,819 |   |                        | $ | 2,645,429
|                                                                                                                                       |  |                    |           |   |                        |   |          

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



2



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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)



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|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|------------------------------------------------ |  | ---------------------- | ---------- | - | ------------------------- | - | ---------- | ----------- |  | - | ----------- | - |  | - | ---------- | -
|                                                 |  | Quarter ended June 30, |            |   | Six months ended June 30, |  
|                                                 |  | 2007                   |            |   | 2006                      |   |            | 2007        |  |   | 2006        |  
|                                                 |  | (unaudited)            |            |   | (unaudited)               |   |            | (unaudited) |  |   | (unaudited) |  
|REVENUES:                                        |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|Gross premiums written                           |  | $                      | 109,259    |   |                           | $ | 120,325    |             |  | $ | 345,502     |   |  | $ | 355,918    |  
|Change in unearned premiums                      |  |                        | (5,284     | ) |                           |   | (14,614    | )           |  |   | (132,398    | ) |  |   | (158,640   | )
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|Premiums earned                                  |  |                        | 103,975    |   |                           |   | 105,711    |             |  |   | 213,104     |   |  |   | 197,278    |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        |            |  
|Reinsurance premiums ceded                       |  |                        | (7,062     | ) |                           |   | (6,964     | )           |  |   | (14,718     | ) |  |   | (15,389    | )
|Change in deferred premiums ceded                |  |                        | 1,936      |   |                           |   | 2,023      |             |  |   | 5,150       |   |  |   | 5,824      |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|Premiums ceded                                   |  |                        | (5,126     | ) |                           |   | (4,941     | )           |  |   | (9,568      | ) |  |   | (9,565     | )
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        |            |  
|Net premiums earned                              |  |                        | 98,849     |   |                           |   | 100,770    |             |  |   | 203,536     |   |  |   | 187,713    |  
|Net investment income                            |  |                        | 31,904     |   |                           |   | 31,064     |             |  |   | 65,014      |   |  |   | 55,668     |  
|Net gains (losses) on investments                |  |                        | 1,868      |   |                           |   | 4,521      |             |  |   | 10,545      |   |  |   | (8,093     | )
|Other income                                     |  |                        | 261        |   |                           |   | 925        |             |  |   | 887         |   |  |   | 1,762      |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        | 132,882    |   |                           |   | 137,280    |             |  |   | 279,982     |   |  |   | 237,050    |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        |            |  
|EXPENSES:                                        |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|Net losses and loss adjustment expenses          |  |                        | 87,210     |   |                           |   | 13,387     |             |  |   | 140,163     |   |  |   | 35,483     |  
|Net acquisition costs                            |  |                        | 10,437     |   |                           |   | 9,043      |             |  |   | 20,585      |   |  |   | 17,832     |  
|General and administrative expenses              |  |                        | 6,799      |   |                           |   | 8,772      |             |  |   | 13,958      |   |  |   | 15,121     |  
|Net exchange loss (gain)                         |  |                        | 464        |   |                           |   | (2,744     | )           |  |   | 97          |   |  |   | (2,855     | )
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        | 104,910    |   |                           |   | 28,458     |             |  |   | 174,803     |   |  |   | 65,581     |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        |            |  
|NET INCOME                                       |  |                        | 27,972     |   |                           |   | 108,822    |             |  |   | 105,179     |   |  |   | 171,469    |  
|Dividends on preferred shares                    |  |                        | 4,378      |   |                           |   | 4,378      |             |  |   | 8,564       |   |  |   | 8,612      |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|Net income available to common shareholders      |  | $                      | 23,594     |   |                           | $ | 104,444    |             |  | $ | 96,615      |   |  | $ | 162,857    |  
|                                                 |  |                        |            |   |                           |   |            |             |  |   |             |   |  |   |            |  
|                                                 |  |                        |            |  
|Basic net income per common share                |  | $                      | 0.37       |   |                           | $ | 1.64       |             |  | $ | 1.52        |   |  | $ | 2.56       |  
|Diluted net income per common share              |  | $                      | 0.37       |   |                           | $ | 1.50       |             |  | $ | 1.48        |   |  | $ | 2.36       |  
|                                                 |  |                        |            |  
|Weighted average number of common sharesbasic   |  |                        | 63,194,240 |   |                           |   | 63,630,224 |             |  |   | 63,445,797  |   |  |   | 63,621,492 |  
|Weighted average number of common sharesdiluted |  |                        | 63,210,001 |   |                           |   | 72,635,057 |             |  |   | 70,979,971  |   |  |   | 72,626,599 |  

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



3



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IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of
United States dollars)



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|                                                                      |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  
|--------------------------------------------------------------------- |  | ---------------------- | ------ | ----------- | ------------------------- | ------- | ----------- |  | ----------- | ------- |  | - | ------- | -
|                                                                      |  | Quarter ended June 30, |        |             | Six months ended June 30, |        
|                                                                      |  | 2007                   |        | 2006        |                           |         | 2007        |  | 2006        |        
|                                                                      |  | (unaudited)            |        | (unaudited) |                           |         | (unaudited) |  | (unaudited) |        
|NET INCOME                                                            |  | $                      | 27,972 |             | $                         | 108,822 |             |  | $           | 105,179 |  | $ | 171,469 |  
|                                                                      |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  
|Other comprehensive (loss) income:                                    |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  
|Net holding (losses) on investments during period                     |  |                        |       |             |                           | (28,567 | )           |  |             |        |  |   | (27,295 | )
|Reclassification adjustment for (gains) losses included in net income |  |                        |       |             |                           | (4,521  | )           |  |             |        |  |   | 8,093   |  
|                                                                      |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  
|                                                                      |  |                        |       |             |                           | (33,088 | )           |  |             |        |  |   | (19,202 | )
|                                                                      |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  
|COMPREHENSIVE INCOME                                                  |  | $                      | 27,972 |             | $                         | 75,734  |             |  | $           | 105,179 |  | $ | 152,267 |  
|                                                                      |  |                        |        |             |                           |         |             |  |             |         |  |   |         |  

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



4



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IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

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



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|                                                  |  |                    |           |   |                        |   |           |  
|------------------------------------------------- |  | ------------------ | --------- | - | ---------------------- | - | --------- | -
|                                                  |  | As ofJune 30, 2007 |           |   | As ofDecember 31, 2006 |  
|                                                  |  | (unaudited)        |           |   |                        |  
|COMMON SHARES PAR VALUE $0.01:                    |  |                    |           |   |                        |   |           |  
|Balance, beginning of year                        |  | $                  | 637       |   |                        | $ | 637       |  
|Additional shares issued                          |  |                    | 2         |   |                        |   |          |  
|Shares repurchased                                |  |                    | (32       | ) |                        |   |          |  
|                                                  |  |                    |           |   |                        |   |           |  
|Balance, end of period                            |  | $                  | 607       |   |                        | $ | 637       |  
|                                                  |  |                    |           |   |                        |   |           |  
|                                                  |  |                   
|PREFERRED SHARES PAR VALUE $0.01:                 |  |                    |           |   |                        |   |           |  
|Balance beginning of year                         |  | $                  | 90        |   |                        | $ | 90        |  
|Additional shares issued                          |  |                    |          |   |                        |   |          |  
|                                                  |  |                    |           |   |                        |   |           |  
|Balance, end of period                            |  | $                  | 90        |   |                        | $ | 90        |  
|                                                  |  |                    |           |   |                        |   |           |  
|                                                  |  |                   
|ADDITIONAL PAID-IN CAPITAL:                       |  |                    |           |   |                        |   |           |  
|Balance, beginning of year                        |  | $                  | 1,474,092 |   |                        | $ | 1,470,765 |  
|Shares issued                                     |  |                    |          |   |                        |   | 59        |  
|Common shares repurchased                         |  |                    | (73,977   | ) |                        |   |          |  
|Stock options and grants awarded                  |  |                    | 4,855     |   |                        |   | 2,217     |  
|Net change in deferred compensation               |  |                    | (1,536    | ) |                        |   | 1,051     |  
|                                                  |  |                    |           |   |                        |   |           |  
|Balance, end of period                            |  | $                  | 1,403,434 |   |                        | $ | 1,474,092 |  
|                                                  |  |                    |           |   |                        |   |           |  
|                                                  |  |                   
|RETAINED EARNINGS:                                |  |                    |           |   |                        |   |           |  
|Balance, beginning of year                        |  | $                  | 388,826   |   |                        | $ | 52,126    |  
|Cumulative-effect adjustment of adopting SFAS 159 |  |                    | 127,996   |   |                        |   |          |  
|Net income                                        |  |                    | 105,179   |   |                        |   | 394,585   |  
|Reduction on common share repurchase              |  |                    | (25,991   | ) |                        |   |          |  
|Dividends paid and accrued                        |  |                    | (34,025   | ) |                        |   | (57,885   | )
|                                                  |  |                    |           |   |                        |   |           |  
|Balance, end of period                            |  | $                  | 561,985   |   |                        | $ | 388,826   |  
|                                                  |  |                    |           |   |                        |   |           |  
|                                                  |  |                   
|ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:    |  |                    |           |   |                        |   |           |  
|Balance, beginning of year                        |  | $                  | 127,310   |   |                        | $ | 92,782    |  
|Cumulative-effect adjustment of adopting SFAS 159 |  |                    | (127,996  | ) |                        |   |          |  
|Other comprehensive income                        |  |                    |          |   |                        |   | 34,528    |  
|                                                  |  |                    |           |   |                        |   |           |  
|Balance, end of period                            |  | $                  | (686      | ) |                        | $ | 127,310   |  
|                                                  |  |                    |           |   |                        |   |           |  
|                                                  |  |                   
|TOTAL SHAREHOLDERS EQUITY                        |  | $                  | 1,965,430 |   |                        | $ | 1,990,955 |  
|                                                  |  |                    |           |   |                        |   |           |  

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



5



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IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States
dollars)

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|                                                                                        |  |                           |          |   |             |   |          |  
|--------------------------------------------------------------------------------------- |  | ------------------------- | -------- | - | ----------- | - | -------- | -
|                                                                                        |  | Six months ended June 30, |         
|                                                                                        |  | 2007                      |          |   | 2006        |  
|                                                                                        |  | (unaudited)               |          |   | (unaudited) |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                   |  |                           |          |   |             |   |          |  
|Net income                                                                              |  | $                         | 105,179  |   |             | $ | 171,469  |  
|Adjustments to reconcile net income to cash provided by (used in) operating activities: |  |                           |          |   |             |   |          |  
|Amortization of fixed maturity discounts, net                                           |  |                           | (2,055   | ) |             |   | (5,385   | )
|Net (gains) losses on investments                                                       |  |                           | (10,545  | ) |             |   | 8,093    |  
|Stock compensation                                                                      |  |                           | 3,321    |   |             |   | 1,787    |  
|Changes in:                                                                             |  |                           |          |   |             |   |          |  
|Reinsurance premiums receivable                                                         |  |                           | (105,397 | ) |             |   | (91,343  | )
|Deferred premiums ceded                                                                 |  |                           | (5,150   | ) |             |   | (5,824   | )
|Loss and loss adjustment expenses recoverable                                           |  |                           | (23,583  | ) |             |   | (346     | )
|Accrued investment income                                                               |  |                           | 226      |   |             |   | (3,153   | )
|Deferred acquisition costs                                                              |  |                           | (13,325  | ) |             |   | (16,528  | )
|Prepaid expenses and other assets                                                       |  |                           | (1,168   | ) |             |   | (3,800   | )
|Reserve for losses and loss adjustment expenses                                         |  |                           | (12,608  | ) |             |   | (284,607 | )
|Unearned premiums                                                                       |  |                           | 132,398  |   |             |   | 158,640  |  
|Reinsurance premiums payable                                                            |  |                           | 5,209    |   |             |   | 6,298    |  
|Deferred fees and commissions                                                           |  |                           | 197      |   |             |   | 2,026    |  
|Accounts payable and accrued liabilities                                                |  |                           | (281     | ) |             |   | 2,691    |  
|                                                                                        |  |                           |          |   |             |   |          |  
|Cash provided by (used in) operating activities                                         |  |                           | 72,418   |   |             |   | (59,982  | )
|                                                                                        |  |                           |          |   |             |   |          |  
|                                                                                        |  |                          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                   |  |                           |          |   |             |   |          |  
|Purchases of fixed maturity investments                                                 |  |                           | (614,579 | ) |             |   | (759,948 | )
|Proceeds from sale of fixed maturity investments                                        |  |                           | 567,384  |   |             |   | 596,866  |  
|Proceeds from maturities of fixed maturity investments                                  |  |                           | 73,000   |   |             |   | 276,450  |  
|Purchases of equity investments                                                         |  |                           | (16,666  | ) |             |   | (103,832 | )
|Proceeds from sale of equity investments                                                |  |                           |         |   |             |   | 93,681   |  
|                                                                                        |  |                           |          |   |             |   |          |  
|Cash provided by investing activities                                                   |  |                           | 9,139    |   |             |   | 103,217  |  
|                                                                                        |  |                           |          |   |             |   |          |  
|                                                                                        |  |                          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                   |  |                           |          |   |             |   |          |  
|Repurchases of common shares                                                            |  |                           | (100,000 | ) |             |   |         |  
|Net proceeds from share issuance                                                        |  |                           |         |   |             |   | (28      | )
|Cash dividends paid to shareholders                                                     |  |                           | (34,024  | ) |             |   | (29,441  | )
|                                                                                        |  |                           |          |   |             |   |          |  
|Cash used in financing activities                                                       |  |                           | (134,024 | ) |             |   | (29,469  | )
|                                                                                        |  |                           |          |   |             |   |          |  
|                                                                                        |  |                          
|Net (decrease) increase in cash and cash equivalents                                    |  |                           | (52,467  | ) |             |   | 13,766   |  
|Cash and cash equivalents, beginning of period                                          |  |                           | 88,415   |   |             |   | 31,113   |  
|                                                                                        |  |                           |          |   |             |   |          |  
|Cash and cash equivalents, end of period                                                |  | $                         | 35,948   |   |             | $ | 44,879   |  
|                                                                                        |  |                           |          |   |             |   |          |  

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



6



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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)



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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 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 quarter and six-month periods ended June 30, 2007 and 2006, respectively, the consolidated balance sheet as of June 30, 2007 and the consolidated statements of cash flows for the six
months ended June 30, 2007 and 2006, respectively. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2006, included in the
Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 27, 2007. The results of operations for any interim period are not necessarily indicative of results for the full year.

2. DIVIDENDS:

On February 15,
2007 we paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of record on January 31, 2007.

On March 22, 2007 we paid a common stock dividend of $0.20 per share to shareholders of record on March 6, 2007.

On May 15, 2007 we paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of record on May 1, 2007.

On June 21, 2007 we paid a common stock dividend of $0.20 per share to shareholders of record on June 5, 2007.

On July 25, 2007 we declared a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share, to be paid on August 15, 2007
to preferred shareholders of record on August 1, 2007.

On July 25, 2007 we declared a common stock dividend of $0.20 per share,
to be paid on September 20, 2007 to shareholders of record on September 4, 2007.

3. ACCOUNTING FOR STOCK-BASED COMPENSATION AND DISCLOSURE:

The Company adopted a Stock Option Plan (the Option Plan), effective February 15, 1996. This Option Plan was amended
and approved by the shareholders in 1999 and further amended and approved in 2003 and 2005, prior to its termination. The Company adopted a Stock Incentive Plan that was approved by shareholders on June 13, 2003 (the 2003 Stock Incentive
Plan).

On February 20, 2007, the Board of Directors terminated the Option Plan pursuant to its terms, with respect to the common
shares not at that time subject to options under the Option Plan and on July 25, 2007, the Board of Directors terminated the 2003 Stock Incentive Plan pursuant to its terms with respect to common shares not at that time subject to awards
thereunder. On April 24, 2007, upon the recommendation of the Compensation Committee to the Board of Directors, the Board of Directors unanimously adopted and approved the IPC Holdings, Ltd. 2007 Incentive Plan (the 2007 Incentive
Plan). The 2007 Incentive Plan was subsequently approved by shareholders at the Companys Annual General Meeting of shareholders, which was held on June 22, 2007. The 2007 Incentive Plan is designed to replace the terminated Option
Plan and the terminated 2003 Stock Incentive Plan. To date, no awards have been made or are intended to be made under the 2007 Incentive Plan, nor does the Company currently expect to make any awards under the 2007 Incentive Plan until the fiscal
year beginning on January 1, 2008.



7



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A summary of the status of the Companys Option Plan as of June 30, 2007 and 2006 and changes
during the six-month periods then ended is presented in the tables and narrative below.



|                                                           |  |                           |  |                              |       |                 |         |                              |   |      
|---------------------------------------------------------- |  | ------------------------- |  | ---------------------------- | ----- | --------------- | ------- | ---------------------------- | - | -----
|                                                           |  | Six months ended June 30,
|                                                           |  | 2007                      |  | 2006                        
|                                                           |  | Numberof shares           |  | Weightedaverageexerciseprice |       | Numberof shares |         | Weightedaverageexerciseprice
|Outstanding, beginning of period                           |  | 611,625                   |  | $                            | 34.30 |                 | 452,125 |                              | $ | 36.47
|Granted                                                    |  |                          |  | $                            |      |                 | 162,500 |                              | $ | 28.00
|Exercised                                                  |  |                          |  | $                            |      |                 |        |                              | $ |     
|Forfeited                                                  |  |                          |  | $                            |      |                 |        |                              | $ |     
|Outstanding, end of period                                 |  | 611,625                   |  | $                            | 34.30 |                 | 614,625 |                              | $ | 34.23
|Exercisable, end of period                                 |  | 379,750                   |  | $                            | 34.16 |                 | 235,250 |                              | $ | 26.64
|Weighted average fair value of options granted (per share) |  |                           |  | $                            |      |                 |         |                              | $ | 8.99 

The total intrinsic value of stock options exercised was $nil for the six-month periods ended
June 30, 2007 and 2006. The weighted average remaining contractual period as of June 30, 2007 was 6.7 years and 6.0 years for outstanding and exercisable options respectively. The aggregate intrinsic value as of June 30, 2007 was
$1,261 and $738 for outstanding and exercisable options respectively.

There were no options granted during the six months ended
June 30, 2007, and as noted above, the Option Plan was terminated on February 20, 2007. The fair value of options granted on March 17, 2006 was estimated using the Black-Scholes option pricing model, using an assumed risk-free
interest rate of 4.71%; an expected dividend yield of 2.286%; an expected life of 7 years; an expected volatility of 31.0%; and a forfeiture rate of 16%.

The assumed risk-free interest rate is the market yield on U.S. Treasury securities at 7-year constant maturity to match the expected life. The expected life is estimated based on a 4-year vesting period and a 10-year
exercising period together with a review of actual exercising patterns. The expected dividend yield is calculated using the share price and the last dividend per share amount at the date of grant. The expected volatility was calculated using the
Companys own historic price volatility over the previous 5.6 years. The forfeiture rate is obtained from the Companys actual historic experience.



|                        |  |                            |  |                                            |  |                                   |  |                            |  |                                  
|----------------------- |  | -------------------------- |  | ------------------------------------------ |  | --------------------------------- |  | -------------------------- |  | ---------------------------------
|Range of exercise price |  | Outstandingat June 30,2007 |  | Weighted averagecontractualperiod in years |  | Weighted averageexercise price /$ |  | Exercisableat June 30,2007 |  | Weighted averageexercise price /$
|$13-19                  |  | 6,000                      |  | 2.50                                       |  | 15.38                             |  | 6,000                      |  | 15.38                            
|$19-25                  |  | 10,000                     |  | 2.70                                       |  | 21.73                             |  | 10,000                     |  | 21.73                            
|$25-31                  |  | 230,625                    |  | 7.32                                       |  | 27.96                             |  | 108,750                    |  | 27.91                            
|$31-37                  |  | 83,750                     |  | 4.68                                       |  | 31.65                             |  | 83,750                     |  | 31.65                            
|$37-43                  |  | 128,750                    |  | 6.50                                       |  | 38.90                             |  | 95,000                     |  | 38.90                            
|$43-49                  |  | 152,500                    |  | 7.50                                       |  | 43.03                             |  | 76,250                     |  | 43.03                            
|Total                   |  | 611,625                    |  |                                            |  |                                   |  | 379,750                    |  |                                  
|                        |  |                            |  |                                            |  |                                   |  |                            |  |                                  

As of June 30, 2007, there was $4,851 of total unrecognized compensation cost related to
unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.64 years.



8



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4. NEW ACCOUNTING PRONOUNCEMENTS:

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 159 The
Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The statement is effective as of the beginning
of an entitys first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions
of FASB Statement No. 157, Fair Value Measurements (SFAS 157). Commencing January 1, 2007, the Company elected for early adoption of the fair value option for all fixed maturity and equity investments and therefore also adopted
SFAS 157. The effects of the adoption are shown in Managements Discussion and Analysis of Financial Condition and Results of Operations in Critical Accounting Policies under Investments.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement 109, Accounting for Income Taxes. FIN 48 prescribes a
two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not
to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of
being realized upon ultimate settlement. The provisions of FIN 48 became effective for the Company on January 1, 2007. The adoption of FIN 48 did not have any material impact on the Companys consolidated financial statements.



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

Critical Accounting Policies

Our
significant accounting policies are described in Note 2 to our Companys audited financial statements for the fiscal year ended December 31, 2006, included in the Companys Annual Report on Form 10-K filed with the SEC on
February 27, 2007. The following is a summary of the accounting policies for the three main components of our consolidated balance sheet and consolidated statements 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 deposit premium is contractually documented at inception, and management uses this as its best estimate for accounting for these premiums. Premiums are earned on a pro rata basis over the policy period. Premiums may be adjusted upwards or
downwards over the policy period as a result of changes in the cedants actual exposure base and the original estimates thereof, although most contracts do provide for a minimum premium in the contract terms. We refer to such changes in
premiums as adjustment premiums. For proportional treaties, the amount of premium is normally estimated at inception using data provided by the ceding company. We account for such premium using our initial estimates, which are reviewed regularly for
reasonableness by management with respect to the actual premium reported by the ceding company. At June 30, 2007 the amount of premium accrued resulting from managements estimates for proportional treaties was approximately 4% of total
gross premiums written for the six months then ended. Reinstatement premiums are recognized and accrued at the time we incur a loss and where coverage of the original contract is reinstated under pre-defined contract terms, and are earned pro-rata
over the reinstated coverage period. 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, and associated rates on line (i.e. price). The amount accrued at June 30, 2007 for estimated reinstatement premiums on Reported But Not Enough losses (RBNE) and Incurred But Not Reported
(IBNR) loss reserves was $22.9 million.

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 that may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date are 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 and RBNE 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.

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. For excess of loss business, which is generally over 90% of the premiums 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/or their broker and our historical experience of
that treaty, if any, and such estimate is adjusted as actual experience becomes known.

We establish reserves based upon estimates of
losses incurred by the ceding companies, including reserves where we believe that the ultimate loss amount is greater than that reported to us by the ceding company. These reserves, which provide for development on reported losses, are also known as
RBNE reserves. We also establish reserves for losses incurred as a result of an event known but not reported to us. These IBNR reserves, together with RBNE reserves, are established for both catastrophe and other losses. To estimate the portion of
losses and loss adjustment expenses relating to these claims for



10



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the year, we review our portfolio of business to determine where the potential for loss may exist. Industry loss data, as well as actual experience,
knowledge of the business written by us and general market trends in the reinsurance industry, are considered. Since 1993, we have contracted AIR Worldwide Corporation for the use of their proprietary modelscurrently CATRADER ®as part of our modeling approach. These
computer-based loss modeling systems utilize A.M. Bests data and direct exposure information obtained from our clients. We may also use CATRADER ® to measure and estimate loss exposure under the actual event scenario, if available. The sum of the individual estimates derived from the
above methodology provides us with an overall estimate of the loss reserves for IPC as a whole. Our reserving methodology uses a process that calculates a point estimate, as opposed to a methodology that develops a range of estimates.

As a broker market reinsurer, we are reliant on loss information reported to brokers by primary insurers who must estimate their own losses at the policy
level. These estimates are sometimes derived from the output of computer-based modelling systems, and often based upon incomplete and changing information, especially during the period immediately following a catastrophic event. The information we
receive varies by cedant and broker and may include paid losses and estimated case reserves. We may also receive an estimated provision for IBNR reserves, especially when the cedant is providing data in support of a request for collateral for
reserves ceded. Information can be received on a monthly, quarterly or transactional basis. As a reinsurer, our reserve estimates may be inherently less reliable than the reserve estimates of our primary insurer cedants.

There is a time lag inherent in reporting from the original claimant to the primary insurer to the broker and then to the reinsurer. Reporting of
property claims arising from catastrophes in general tends to be prompt (as compared to reporting of claims for casualty or other long-term lines of business). However, the timing of claims reporting can vary depending on various
factors, including: the nature of the event (e.g. hurricane, earthquake, hail, man-made events such as terrorism or rioting); the geographic area involved; the quality of the cedants claims management and reserving practices; and whether the
claims arise under reinsurance contracts for primary companies, or reinsurance of other reinsurance companies (i.e. retrocession). Because the events from which claims arise are typically prominent, public occurrences, we are often able to use
independent reports of such events to augment our loss reserve estimation process. Because of the degree of reliance that we place on ceding companies for claims reporting, the associated time lag, the low frequency/high severity nature of the
business we underwrite and the varying reserving practices among ceding companies, our reserve estimates are highly dependent on management judgement and are therefore subject to significant variability. During the loss settlement period, additional
facts regarding individual claims and trends may become known, and current laws and case law may change.

IPCs controls in place
require that claim payments and reserves must be authorized by an underwriter upon processing. Large claims must also be approved by senior management prior to a claims payment being made. While we have the right to audit client data, most of our
claims result from events that are well known such as hurricanes or earthquakes, and in assessing the reasonableness of reported claims, our claims processors and underwriters ask follow-up questions as necessary. We also cross reference and verify
amounts requested as collateral by ceding companies, in comparison to amounts previously reported to us.

For certain catastrophic events,
there is greater uncertainty underlying the assumptions and associated estimated reserves for losses and loss adjustment expenses reported by our cedants. Complexity resulting from problems such as policy coverage issues, multiple events affecting
one geographic area and the resulting impact on claims adjusting (including allocation of claims to event and the effect of demand surge on the cost of building materials and labour) by, and communications from, ceding companies, can cause greater
uncertainty in the reserve estimates reported to us by our cedants, as well as delays to the timing with which we are notified of cedants changes to their loss estimates, resulting in greater uncertainty in our reserve estimates. In
particular, the estimate for hurricane Katrina has been based on estimates by cedants of their exposure, industry insured loss estimates, output from both industry and proprietary models, a review of contracts potentially affected by the events,
information received from both clients and brokers, and management judgement, which includes consideration of the physical factors noted above, in aggregate. It has been assumed that underlying policy terms and conditions are upheld during our
clients loss adjustment process. However, the unique circumstances and severity of this devastating catastrophe, including the extent of flooding and resultant initial limited access by claims adjusters, introduce additional uncertainty to the
normally difficult process of estimating catastrophe losses, which is compounded by the potential for legal and regulatory issues arising regarding the scope of coverage.



11



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To illustrate the potential variability of estimates for individual catastrophe losses, the following
table outlines the percent changes from IPCs first reported estimates for certain specific catastrophes, over specified time horizons:



|                         |  |                                                        |   |  |             |   |  |              |   |  |              |   |  |                 |   |  |                                                    |  
|------------------------ |  | ------------------------------------------------------ | - |  | ----------- | - |  | ------------ | - |  | ------------ | - |  | --------------- | - |  | -------------------------------------------------- | -
|                         |  | Percentage increase of development from initial report |   |  |             |  
|                         |  | After 6months                                          |   |  | After 1year |   |  | After 2years |   |  | After 3years |   |  | Latest /Final % |   |  | Total Development initial report to latest $(000) |  
|Cyclones Lothar / Martin |  | 61                                                     | % |  | 66          | % |  | 71           | % |  | 73           | % |  | 69              | % |  | 24,100                                             |  
|Cat # 48 (WTC)           |  | 6                                                      | % |  | 7           | % |  | 9            | % |  | 9            | % |  | 4               | % |  | 4,500                                              |  
|2004 Florida hurricanes  |  | 113                                                    | % |  | 137         | % |  | 145          | % |  |              |   |  | 143             | % |  | 116,250                                            |  
|Hurricane Katrina        |  | 1.5                                                    | % |  | 1.6         | % |  |              |   |  |              |   |  | -0.4            | % |  | (3,000                                             | )

Generally, the most significant development arises within six to nine months of an event, due to
the limited amount of information usually available immediately after the event.

Cyclones Lothar and Martin struck France and other parts
of Europe in the last week of 1999. As such, many parts of the affected areas were still devastated, inaccessible and without power at the time we were attempting to establish reserves for 1999 year-end reporting. In many cases, our French cedants
were unable to provide us with much information regarding their potential claims, and we relied more heavily on industry loss estimates, which themselves were based on very limited information. Consequently, there was significant development of our
own loss, as well as for the reported industry loss. As an example, the reported industry loss for cyclone Martin increased 150% from the original estimate.

Similarly, for the four hurricanes that struck Florida over a six-week period concluding in late September 2004, not only was the initial estimation process made difficult by the proximity to the end of the third
quarter 2004 reporting period, there were the added complexities of multiple events affecting one geographic area and the resulting impact on claims adjusting (as noted above) by, and communications from, ceding companies.

Sometimes, for extreme events such as the attack on the World Trade Center and hurricane Katrina, many excess of loss contracts that are impacted by the
event incur full limit losses, on which there can be no adverse development. However, because of the uncertainties associated with hurricane Katrina noted above, there can be no assurance that significant development will not occur on contracts
where the limits have not been exhausted, or that losses are reported for contracts for which we have not previously established a reserve. Generally, the size of a catastrophe is not necessarily an indicator of the amount of potential development
that might occur. However, for larger catastrophes, a small percentage of development can result in a larger dollar impact on a companys results of operations, than a larger percentage development on a smaller event.

As noted above, our methodology provides us with an overall estimate of loss reserves for IPC as a whole. For information on historical development of
IPCs overall loss reserves, please refer to the tables provided in Item 1, Business, Reserve for Losses and Loss Adjustment Expenses, in our Report on Form 10-K for the year ended December 31, 2006.

At June 30, 2007 managements estimates for IBNR/RBNE loss reserves represented approximately 52% of total loss reserves. The estimate mostly
relates to reserves for claims from hurricanes Katrina and Wilma, which affected various parts of Gulf coast states between August and October 2005, from windstorm Kyrill, which affected various parts of northern Europe in January 2007, from
flooding which impacted parts of northern England in June 2007, and the storm and subsequent flooding which affected parts of New South Wales, Australia in early June 2007. The initial estimation process for the June 2007 U.K. and Australian loss
events was made difficult by the proximity of the events to the end of the second quarter. The complexity resulting from the ongoing floods in several areas of England introduces additional uncertainty to the normally difficult process of estimating
IBNR/RBNE loss reserves. The resulting impact on claims adjusting (including allocation of claims to the multiple events because of the time periods covered and the effect of demand surge on the cost of building materials, labour and additional
living expenses), is likely to cause delays to the timing with which we are notified of loss estimates by ceding companies. As discussed above, our reserve estimates are not mathematically or formulaically derived from factors such as numbers of
claims or demand surge impact. If our estimate of IBNR/RBNE loss reserves at June 30, 2007 was inaccurate by a factor of 10%, our results of operations would be impacted by a positive or negative movement of approximately $28 million. If our
total reserve for losses at June 30, 2007 was inaccurate by a factor of 10%, our incurred losses would be impacted by approximately $54 million, which represents approximately 3% of shareholders equity at June 30, 2007. In accordance
with IPCRes registration under the Bermuda Insurance Act 1978 and Related Regulations (the Insurance Act), our loss reserves are certified annually by an independent loss reserve specialist.



12



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Investments

In accordance with our investment guidelines, our investments consist of certain equity investments in mutual funds and high-grade marketable fixed maturity investments. Prior to January 1, 2007, investments were
considered Available for Sale and were carried at fair value. Following the issuance by the FASB of SFAS 159, we elected to early adopt the fair value option for all fixed maturity and equity investments commencing January 1, 2007.
This election requires the investments to now be reported as Trading under SFAS 115 and this election also requires the Company to adopt SFAS 157 regarding fair value measurements. The Company elected to early adopt the fair value option
to simplify the accounting, as this election reduces the burden of the monitoring of differences between the cost and fair value of our investments, including the assessment as to whether declines in value are temporary in nature, mitigates a
potential volatility in earnings and further removes an element of management judgement.

This SFAS 159 election does not amend the
carrying value of our fixed maturity and equity investments as they were previously carried at fair value. Fixed maturity investments are stated at fair value as determined by the quoted market price of these securities and as provided either by
independent pricing services or, when such prices are not available, by reference to broker or underwriter bid indications (Level 1). Equity investments in mutual funds are stated at fair value as determined by either the most recently published net
asset value  being the funds holdings in quoted securities (Level 1)or the most recently advised net asset value as advised by the fund  where the funds holdings can be in various quoted and unquoted investments (Level
2). The difference in accounting arising as a result of the election of the fair value option is in respect of the treatment of unrealized gains and losses. Prior to January 1, 2007, unrealized gains and losses were included within accumulated
other comprehensive income as a separate component of shareholders equity. On January 1, 2007, a cumulative-effect adjustment was made to reclassify the unrealized gains and losses from accumulated other comprehensive income as at
December 31, 2006 into retained earnings. Subsequent to January 1, 2007 any movement in unrealized gains and losses is now recorded within net gains (losses) on investments within the consolidated statements of income. Realized gains and
losses on sales of investments continue to be determined on a first-in, first-out basis. Net investment income includes interest income on fixed maturity investments, recorded when earned, dividend income on equity investments, recorded when
declared, and the amortization of premiums and discounts on investments.

At June 30, 2007 we did not hold any fixed maturity
securities that are not investment grade or not rated.

The cumulative-effect adjustment reclassifying unrealized gains and losses from
accumulated other comprehensive income to retained earnings within the consolidated balance sheets at January 1, 2007 was $128 million which represented the difference between the cost or amortized cost of our investments and the fair value of
those investments at December 31, 2006, as shown in the Companys audited financial statements for the fiscal year ended December 31, 2006, included in the Companys Annual Report on Form 10-K filed with the SEC on
February 27, 2007.



|                           |  |                                                 |  |                                          |  |                                            
|-------------------------- |  | ----------------------------------------------- |  | ---------------------------------------- |  | -------------------------------------------
|($ in thousands)           |  | Fair Value Measurement at June 30, 2007, using:
|Description                |  | Fair ValueMeasurements atJune 30, 2007          |  | Quoted Prices in ActiveMarkets (Level 1) |  | Significant OtherObservable Inputs(Level 2)
|Fixed maturity investments |  | 1,774,705                                       |  | 1,774,705                                |  |                                            
|Equity investments         |  | 625,865                                         |  | 434,802                                  |  | 191,063                                    

As investments are now reported as trading, the change in their fair value during the six months
ended June 30, 2007 of $9.7 million is included in net gains (losses) on investments within the statement of income. The increase is made up of an increase of $31.6 million from equity investments, offset by a decrease of $21.9 million from
fixed maturity investments.

In 2006, investments were reported as available for sale. The decline in the value of individual securities
considered to be other than temporary and included in net gains (losses) on investments for the six months ended June 30, 2006, was $25.7 million. Had we been able to apply the same SFAS 159 accounting in 2006, we would have had a decrease in
net gains (losses) on investments of $19.2 million, and therefore net income would have been $152.3 million for the six months ended June 30, 2006.



13



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RESULTS OF OPERATIONS, QUARTERS ENDED JUNE 30, 2007 AND 2006

The following is a discussion of the results of operations and financial position of IPC Holdings, Ltd. References to we, our,
IPC, or the Company 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 quarter
ended June 30, 2007.

Our net income for the quarter ended June 30, 2007 was $28.0 million, compared to $108.8 million for
the quarter ended June 30, 2006. The primary reason for the decrease is the increase in incurred losses, primarily resulting from floods in the U.K. and storm/flooding which affected New South Wales, Australia, the details of which are
discussed below.

In the quarter ended June 30, 2007, we wrote gross premiums of $109.3 million, compared to $120.3 million in the
second quarter of 2006. We wrote premiums in respect of new business totaling $4.1 million, but premiums from existing business were approximately $6.7 million less in the second quarter of 2007 in comparison to the second quarter of 2006, mostly
due to program re-structuring. Furthermore, business which was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled approximately $6.7 million. Excess of loss adjustment premiums
were $3.1 million less in the quarter ended June 30, 2007 in comparison to the second quarter of 2006. Reinstatement premiums in the second quarter of 2007 were $1.2 million higher than in the second quarter of 2006, primarily due to accruals
resulting from anticipated claims from the U.K. floods, offset in part by a reduction in reinstatement premiums for prior year events where estimated ultimate losses have reduced, as noted below.

In the quarter ended June 30, 2007, we ceded $7.1 million of premiums to our retrocessional facilities, compared with $7.0 million in the second
quarter of 2006. The actual contracts ceded are at IPCs underwriters judgement in optimizing the risk profile of the portfolio, which can cause premiums ceded to vary as a proportion of our gross writings, from quarter to quarter. In
addition, a proportion of reinstatement premiums, accrued as a result of U.K. flood losses, in the amount of $1.6 million, were also ceded to our retrocessionnaires, for those contracts where we had benefited from retrocessional recoveries. Net
premiums earned in the quarter ended June 30, 2007 were $98.8 million, compared to $100.8 million in the second quarter of 2006.

Net
investment income was $31.9 million in the quarter ended June 30, 2007, compared to $31.1 million in the second quarter of 2006. In the second quarter of 2007 we received dividends of $6.7 million from our investments in equity funds and a fund
of hedge funds, compared to dividends of $7.3 million from these investments in the second quarter of 2006. In addition, we also benefited from an increase in the average yield of our fixed income investment portfolio.

We recognized a net gain of $1.9 million from investments in the quarter ended June 30, 2007, compared to $4.5 million in the second quarter of
2006. As previously discussed, effective January 1, 2007, we early-adopted SFAS 159, the Fair Value Option for Financial Assets and Financial Liabilities, with respect to our investment portfolio. As a result all unrealized gains and losses in
our investment portfolio were reclassified from accumulated other comprehensive income within shareholders equity on our consolidated balance sheets to retained earnings as of January 1, 2007. Further, all subsequent changes to the fair
value of our investment portfolio are recorded as net gains (losses) on investments in our consolidated statements of income. In June 2006, we sold our investment in an equity fund with attributes similar to those of the S & P 500 Index,
realizing a $27.8 million gain. However, realized losses in the second quarter of 2006 included a write-down of $18.0 million in the cost basis of certain fixed income securities where management had determined there had been a decline in value,
which was other than temporary.

In the quarter ended June 30, 2007, we incurred net losses and loss adjustment expenses of $87.2
million, compared to $13.4 million in the second quarter of 2006. Net incurred losses in the second quarter of 2007 included $62.6 million with respect to the flooding, which impacted parts of northern England in June of this year, and $50.1 million
with respect to the storm and subsequent flooding, which affected parts of New South Wales, Australia in early June 2007. These losses were offset in part by reductions to reserves for prior events totaling $26.0 million, the largest component of
which was a reduction of $16.0 million to our estimate of ultimate loss from hurricane Katrina. Our loss ratio, which is the ratio of net losses and loss adjustment expenses to net premiums earned, was 88.2% for the quarter ended June 30, 2007,
compared to 13.3% for the second quarter of 2006.

Net acquisition costs incurred, which consist primarily of commissions and brokerage
fees paid to intermediaries for the production of business, were $10.4 million for the quarter ended June 30, 2007, compared to $9.0 million in the second quarter of 2006. These costs have increased disproportionately to earned premiums as a
result of an increase to our accrual for profit commissions payable to cedants for prior year business, in particular relating to several pro rata treaties where estimated losses have been reduced. General and administrative expenses were $6.8
million in the quarter ended June 30, 2007, compared to $8.8 million in the second quarter of 2006. The primary area of decrease was administrative service fee expense, which was $1.8 million less in the second quarter of 2007 compared to the
second quarter of 2006, as a result of amendments made to the Administrative Service agreement which were effective July 1, 2006. In addition there were reductions in bank charges, letter of credit and credit facility fees, and legal fees,
offset in part by an increase in salaries and other compensation.



14



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RESULTS OF OPERATIONS, SIX MONTHS ENDED JUNE 30, 2007 AND 2006

Our net income for the six months ended June 30, 2007 was $105.2 million, compared to $171.5 million for the six months ended June 30, 2006. The
primary reason for the decrease is the increase in incurred losses, primarily resulting from floods in the U.K. and storm/flooding, which affected New South Wales, Australia, the details of which are discussed above. This decrease was partially
offset by the increase in earned premiums, the increase in investment income and the increase in net gains (losses) on investments.

In the
six months ended June 30, 2007, we wrote premiums of $345.5 million, compared to $355.9 million in the first six months of 2006, a decrease of 3%. We wrote premiums in respect of new business totaling $18.0 million and premiums from existing
business were approximately $21.5 million more in the first six months of 2007 in comparison to the first six months of 2006, due to increased pricing, program re-structuring, changes in renewal dates and/or foreign exchange rate differences. This
was more than offset by business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, which totaled approximately $59.5 million. Adjustment premiums, were $3.2 million in the
first six months of 2007 compared to $6.1 million in the first six months of 2006. Reinstatement premiums were $12.5 million higher in the first six months of 2007, compared to the first six months of 2006, primarily due to accruals resulting from
anticipated claims from U.K. floods and windstorm Kyrill.

In the six months ended June 30, 2007, we ceded $14.7 million of premiums
to our retrocessional facilities, compared with $15.4 million for the six months ended June 30, 2006. The actual contracts ceded are at IPCs underwriters judgement in optimizing the risk profile of the portfolio, which can cause
premiums ceded to vary as a proportion of our gross writings, from quarter to quarter. In addition, a proportion of reinstatement premiums accrued as a result of U.K. flood losses in the amount of $1.6 million, were also ceded to our
retrocessionnaires, for those contracts where we had benefited from retrocessional recoveries. Net premiums earned in the six months ended June 30, 2007 were $203.5 million, compared to $187.7 million in the first six months of 2006, an
increase of 8%, which was mostly due to the impact of increased reinstatement premiums as a result of increased loss activity in the period.

Net investment income was $65.0 million in the six months ended June 30, 2007, compared to $55.7 million in the first six months of 2006. Investment income in the current six months included $14.6 million in dividends from our
investments in equity funds and a fund of hedge funds. In the first six months of 2006 we received dividends of $9.4 million from these investments. In addition, we also benefited from an increase in the average yield of our fixed income investment
portfolio.

There was a net gain from investments in the six months ended June 30, 2007 of $10.5 million, compared to a net loss from
investments of $(8.1) million in the first six months of 2006. As previously discussed, effective January 1, 2007, we early-adopted SFAS 159, the Fair Value Option for Financial Assets and Financial Liabilities, with respect to our investment
portfolio. As a result all unrealized gains and losses in our investment portfolio were reclassified from accumulated other comprehensive income within shareholders equity on our consolidated balance sheets, to retained earnings as of
January 1, 2007. Further, all subsequent changes to the fair value of our investment portfolio are recorded as net gains (losses) on investments in our consolidated statements of income. In June 2006, we sold our investment in an equity fund
with attributes similar to those of the S & P 500 Index, realizing a $27.8 million gain. However, net realized losses in the first six months of 2006 included a write-down of $25.7 million in the cost basis of certain fixed income securities
where management determined there had been a decline in value, which was other than temporary.

In the six months ended June 30, 2007,
we incurred net losses and loss adjustment expenses of $140.2 million, compared to $35.5 million in the first six months of 2006. In addition to the events noted above, we incurred losses of $46 million from windstorm Kyrill, which swept across
northern Europe in late January 2007. Incurred losses in the first six months of 2006 included claims from cyclone Larry, which struck Queensland, Australia in March 2006, in the amount of $8 million. The balance of the incurred losses in the first
six months of 2006 related to development from the major windstorms of 2005 ($17 million), two accidents, which occurred in 2005an explosion, which occurred in the U.K. in December 2005, and a train wreck and associated chemical spill, which
took place in South Carolina in January 2005 (combined amount $7.3 million)and reserves established for pro rata treaty business. Our loss ratio, which is the ratio of net losses and loss adjustment expenses to net premiums earned, was 68.8%
for the first six months of 2007, compared to 18.9% for the first six months of 2006.

Net acquisition costs incurred, were $20.6 million
for the six months ended June 30, 2007, compared to $17.8 million in the first six months of 2006. In addition to the profit commission increase described above, acquisition costs have also increased because earned premiums have increased.
General and administrative expenses were $14.0 million in the six months ended June 30, 2007, compared to $15.1 million in the first six months of 2006. The primary area of decrease was administrative service fee expense, which was $3.6 million
less in the first six months of 2007 compared to the first six months of 2006, offset by an increase in salaries and other compensation. Other areas of decrease were reductions in bank charges, letter of credit and credit facility fees, and legal
fees.



15



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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. Under the Insurance Act, IPCRe is
required to maintain a solvency margin and a minimum liquidity ratio, and is prohibited from declaring or paying dividends if to do so would cause IPCRe to fail to meet its solvency margin and its minimum liquidity ratio. Under the Insurance Act,
IPCRe is prohibited from paying dividends of more than 25% of its total statutory capital and surplus at the end of the previous fiscal year unless it files an affidavit stating that the declaration of such dividends has not caused IPCRe to fail to
meet its solvency margin and minimum liquidity ratio. The Insurance Act also prohibits IPCRe from declaring or paying any dividend without the approval of the Supervisor of Insurance of Bermuda if IPCRe failed to meet its solvency margin and minimum
liquidity ratio on the last day of the previous fiscal year. In addition, IPCRe is prohibited under the Insurance Act from reducing its opening total statutory capital by more than 15% without the approval of the Authority. The maximum dividend
payable by IPCRe in accordance with the foregoing restrictions as of June 30, 2007 was approximately $510.1 million.

IPCRes
sources of funds consist of premiums written, investment income, paid losses recovered from retrocessionaires, underwriting agency commissions 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 may fluctuate significantly from period to period.

Net cash inflows from
operating activities in the six months ended June 30, 2007 were $72.4 million compared to net cash outflows of $(60.0) million in the corresponding period of 2006. The significant increase is primarily the result of the decrease in net claims
paid during the period, which were $177.6 million in the six months ended June 30, 2007, compared to $322.0 million in the corresponding period of 2006. The trend of significantly decreased claims payments is not expected to continue in 2008,
as we anticipate paying claims associated with the events that have taken place in 2007, primarily the summer storms and floods in the U.K. and Australia, as well as the windstorms that took place in 2005.

Net cash inflows from investing activities in the six months ended June 30, 2007 were $9.1 million compared to net cash inflows of $103.2 million in
the corresponding period of 2006. Net cash outflows from financing activities in the six months ended June 30, 2007 were $134.0 million compared to net cash outflows of $29.5 million in the corresponding period of 2006, primarily as a result of
the Companys repurchase of $100 million of its common shares in June 2007. Cash and cash equivalents decreased by $52.5 million in the six months ended June 30, 2007, resulting in a balance of $35.9 million at June 30, 2007.

At June 30, 2007, 58% of IPCs fixed maturity investment portfolio (based on fair value) was held in securities rated AAA, and
24% was held in securities rated AA. At December 31, 2006 the proportions of securities so rated were 52% and 24%, respectively. At June 30, 2007 the average modified duration of IPCs fixed maturity portfolio was 3.4 years, compared
to 3.2 years at December 31, 2006. We believe that because of the relatively short duration and high quality of IPCs investment portfolio, we have sufficient liquidity to meet IPCs cash demands.

On February 21, 2006, our shareholders approved an increase in the number of the Companys authorized common shares from 75,000,000 to
150,000,000 and an increase in the number of the Companys authorized preferred shares from 25,000,000 to 35,000,000. On April 27, 2006, IPC filed an omnibus registration statement with the United States Securities and Exchange Commission
(SEC) for the sale of securities including debt securities, common and preferred shares and other securities that IPC may wish to offer from time to time.

Ratings are an important factor in establishing the competitive position of reinsurance companies.
IPCRe and IPCRe Europe have an insurer financial strength rating of A (Excellent; 3rdof 15 categories)
from A.M. Best and are rated A- (Strong; 7thof 18 categories) for financial strength and counter-party
credit by Standard & Poors (S & P). A.M. Best and S & P ratings reflect their opinions of a reinsurance companys financial strength, operating performance, strategic position and ability to meet its
obligations to policyholders, but are not evaluations directed to investors in our securities and are not recommendations to buy, sell or hold our securities. Our ratings are subject to periodic review by A.M. Best and S & P, and we cannot
assure you that we will be able to retain those ratings. On April 19, 2007, S & P lowered IPCRe and IPCRe Europes A ratings (with a negative outlook) to A- ratings (with a stable outlook), as part of its annual
rating review.If these ratings are reduced from their current levels by A.M. Best and/or S & P, our competitive position in the insurance industry could suffer and it may be more difficult for us to market our products. A downgrade could
result in a loss of business as ceding companies move to other reinsurers with higher ratings, and a significant downgrade to a rating below A- by A.M. Best or S & P could trigger provisions allowing some cedants to opt to cancel
their reinsurance contracts with us.

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



16



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establishment of a trust, or a cash advance. At June 30, 2007 IPCRe obtained letters of credit through two commercial banks pursuant to two bilateral
facilities in amounts of $350 million and $100 million, respectively, and a $250 million senior secured syndicated facility discussed below. In turn, IPCRe provides the banks security by giving them liens over certain of IPCRes investments in
an amount not to exceed 118% of the aggregate letters of credit outstanding. Effective June 30, 2007 and December 31, 2006, there were outstanding letters of credit of $265.2 million and $375.9 million, respectively. The majority of the
amount at the end of June 2007 was due to the requirements of our clients as a result of claims arising from hurricanes Katrina, Rita and Wilma. The total amount of security required by the banks under the facilities at June 30, 2007 and
December 31, 2006 was approximately $307.8 million and $435.8 million respectively. Effective April 13, 2006 IPC entered into a five-year, $500 million credit agreement with a syndicate of lenders. The credit agreement consists of a $250
million senior unsecured credit facility available for revolving borrowings and letters of credit, and a $250 million senior secured credit facility available for letters of credit. The revolving line of credit is available for the working capital,
liquidity and general corporate requirements of the Company and its subsidiaries. Total letter of credit capacity available to IPC is at least $700 million, including the new facility. Under the terms of the $500 million credit agreement, IPC is
permitted to declare and pay dividends provided there are no defaults or unmatured defaults pending. One of the significant covenants of the facility requires IPC to maintain a minimum net worth (shareholders equity) of $1 billion, plus 25% of
any positive net income for each fiscal year, beginning with the fiscal year ending December 31, 2006, plus 25% of the net proceeds of any equity issuance or other capital contributions. As of June 30, 2007 the maximum dividend payable by
IPC Holdings under the terms of the facility was $729.0 million. As of the date of this report, no amounts have been drawn under the facility, and we are in compliance with all terms and covenants thereof.

Our investment portfolio does not currently include direct investments in options, warrants, swaps, collars or similar derivative instruments, although
such instruments may be included within the underlying investments of our fund of hedge funds. 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 IPCRe nor IPCUSL have any material commitments for capital expenditures.

Share Repurchase Program

On April 24, 2007, the
Board of Directors authorized a share repurchase of up to $200 million of the Companys common shares. Such repurchase may be conducted by means of open market repurchases, privately negotiated transactions (including accelerated share
repurchase plans or use of a forward contract to repurchase shares) or otherwise. During the second quarter of 2007, the Company repurchased and cancelled $100 million of its common shares. These repurchases, which were conducted in the open market,
amounted to 3,188,669 common shares, at an average price of $31.331 per share.

OFF-BALANCE SHEET ARRANGEMENTS

Neither the Company nor any of its subsidiaries have any forms of off-balance sheet arrangements, or cash obligations and commitments, as defined by
Item 303(a)(4) of Regulation S-K.

RELATIONSHIPS WITH AMERICAN INTERNATIONAL GROUP, INC.

For a discussion of certain of our contractual relationships with American International Group, Inc. (AIG), please see Certain
Relationships and Related Transactions in our Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 30, 2007 and incorporated by reference into our Form 10-K for the year ended
December 31, 2006, filed with the SEC on February 27, 2007. All transactions with AIG are conducted at arms length, with normal terms and conditions applicable.



|Item 3. | Quantitative and Qualitative Disclosures 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.



17



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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, which rely principally on historical data. Because of this,
such models may not accurately predict future market behaviour. 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, as of
June 30, 2007 and 2006. The analysis calculated the VaR with respect to the net fair value of our invested assets (cash and cash equivalents, equity and high-grade fixed income securities) as of June 30, 2007 and 2006 using the historical
simulation methodology. At June 30, 2007 the VaR of IPCRes investment portfolio was approximately $29.3 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 and equity market data. As of June 30, 2007 the VaR of IPCRes investment portfolio represented 1% of the total fair value of the investment portfolio.

The following table presents the VaR of each component of market risk of IPCRes investment portfolio as of June 30,
2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006, respectively, and the average for the twelve months ended June 30, 2007 calculated using the beginning, quarterly and ending
points (expressed in thousands of U.S. dollars):



|                          |  |                  |         |   |                   |   |         |                      |  |   |                       |   |  |                  |         |   |                                      |   |         |   |  |   |         |  
|------------------------- |  | ---------------- | ------- | - | ----------------- | - | ------- | -------------------- |  | - | --------------------- | - |  | ---------------- | ------- | - | ------------------------------------ | - | ------- | - |  | - | ------- | -
|Market Risk               |  | At June 30, 2007 |         |   | At March 31, 2007 |   |         | At December 31, 2006 |  |   | At September 30, 2006 |   |  | At June 30, 2006 |         |   | Averagefor 12monthsendedJune 30,2007 |  
|Currency                  |  | $                | 2,669   |   |                   | $ | 2,703   |                      |  | $ | 2,628                 |   |  | $                | 2,749   |   |                                      | $ | 3,097   |   |  | $ | 2,769   |  
|Interest Rate             |  |                  | 25,917  |   |                   |   | 25,444  |                      |  |   | 27,270                |   |  |                  | 31,210  |   |                                      |   | 35,593  |   |  |   | 29,087  |  
|Equity (incl. hedge fund) |  |                  | 20,023  |   |                   |   | 18,814  |                      |  |   | 18,963                |   |  |                  | 17,793  |   |                                      |   | 17,879  |   |  |   | 18,695  |  
|                          |  |                  |         |   |                   |   |         |                      |  |   |                       |   |  |                  |         |   |                                      |   |         |   |  |   |         |  
|Sum of Risk               |  |                  | 48,609  |   |                   |   | 46,961  |                      |  |   | 48,861                |   |  |                  | 51,752  |   |                                      |   | 56,569  |   |  |   | 50,551  |  
|Diversification Benefit   |  |                  | (19,330 | ) |                   |   | (17,254 | )                    |  |   | (15,885               | ) |  |                  | (18,757 | ) |                                      |   | (18,690 | ) |  |   | (17,984 | )
|                          |  |                  |         |   |                   |   |         |                      |  |   |                       |   |  |                  |         |   |                                      |   |         |   |  |   |         |  
|Total Net Risk            |  | $                | 29,279  |   |                   | $ | 29,707  |                      |  | $ | 32,976                |   |  |                  | 32,995  |   |                                      |   | 37,879  |   |  | $ | 32,567  |  
|                          |  |                  |         |   |                   |   |         |                      |  |   |                       |   |  |                  |         |   |                                      |   |         |   |  |   |         |  

From December 2006 to June 2007, total portfolio net VaR fell, mainly because the size of the
portfolio decreased. The interest rate VaR decreased primarily due a reduction in the volatility of interest rates in the U.S. This was offset by the rise in equity VaR, which resulted from the increase in the market value of equity positions as a
proportion of the portfolio, as well as a rise in equity volatility. 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
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 June 30, 2007 an estimated $71 million (December 31, 2006$25 million) of reinsurance premiums receivable, and an estimated $185 million (December 31, 2006$46 million) of loss reserves, were denominated in non-U.S.
currencies. The currencies to which IPC has the most net exposure are Australian dollar, U.K. sterling, and Japanese yen. If the dollar strengthened 10% against the yen, our net adverse exchange exposure would be approximately $0.7 million; if the
dollar weakened 10% against the Australian dollar and sterling, our net adverse exchange exposure would be approximately $4.6 million and $4.5 million respectively.



|Item 4. | Controls and Procedures
|------- | -----------------------

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-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the
design and operation of these disclosure controls and procedures were effective, except with respect to the following item.

Our internal
control testing is undertaken throughout the year in order to assist in managements review of the quarterly financial statements and predominantly as support for managements year-end evaluation. During the second-quarter review of
controls we have found some exceptions in the effectiveness of controls relating to the determination of ceded reinsurance balances and reinstatement premium accruals following the estimation of reserves for new loss events occurring in the quarter.
We have therefore enhanced certain of our internal controls around ceded reinsurance balances and reinstatement premium accruals.



18



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Except for the preceding item, no change in our internal control over financial reporting (as defined in
Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934) occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.

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, expects or other words of similar import 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 factors in our results have been and will continue to be the severity and/or frequency of catastrophic
events, which are 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 expectations; (ii) the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time; (iii) any lowering or loss of one of the
financial ratings of the Companys wholly-owned subsidiary, IPCRe Limited and/or IPCRe Europe Limited; (iv) a decrease in the level of demand for property catastrophe reinsurance, or increased competition owing to increased capacity of
property catastrophe reinsurers; (v) the payout for claims from hurricane Katrina, or other events, being faster than anticipated, which could result in a reduction in the amount of our investment portfolio; (vi) the effect of competition
on market trends and pricing; (vii) 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; (viii) challenges by
insurance regulators in the United States to our claim of exemption from insurance regulation under current laws; (ix) a contention by the United States Internal Revenue Service that we are engaged in the conduct of a trade or business within
the United States; (x) loss of services of any one of our executive officers; (xi) changes in interest rates and/or equity values in the United States of America and elsewhere; or (xii) changes in exchange rates and greater than
expected currency exposure.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

NONE



|Item 1A. | Risk Factors.
|-------- | -------------

As a result of the S & P
announcement on April 19, 2007 that IPCRes and IPCRe Europes A rating (with a negative outlook) would be lowered to A- (with a stable outlook), the following amends and restates in its entirety the risk
factor labeled We are rated by A.M. Best and S & P, and a decline in these ratings could affect our standing among customers and cause our sales and earnings to decrease in Part I, Item 1A of our annual report on Form
10-K for the year ended December 31, 2006 filed with the SEC on February 27, 2007.

We are rated by A.M. Best and S &
P, and a decline in these ratings could affect our standing among customers and cause our sales and earnings to decrease.

Ratings
are an important factor in establishing the competitive position of reinsurance companies. IPCRe and IPCRe Europe have an insurer financial strength rating of A (Excellent; 3rd of 15 categories) from A.M. Best and are rated A-
(Strong; 7th of 18 categories) for financial strength and counter-party credit by S & P. A.M. Best and S & P ratings reflect their opinions of a reinsurance companys financial strength, operating performance, strategic position
and ability to meet its obligations to policyholders, but are not evaluations directed to investors in our securities and are not recommendations to buy, sell or hold our securities. In November 2005, as a result of the devastation brought by
hurricane Katrina and the adverse effect on our financial condition, A.M. Best lowered our rating from A+ to A. Shortly thereafter, S & P also lowered their rating from A+ to A. Both of these ratings were affirmed during 2006. On April 19,
2007, S & P announced that IPCRes and IPCRe Europes A rating (with a negative outlook) would be lowered to A- (with a stable outlook), as part of its annual review. Our ratings are subject to periodic review
by A.M. Best and S & P, and we cannot assure you that we will be able to retain those ratings. If these ratings are reduced from their current levels by A.M. Best and/or S & P, our competitive position in the insurance industry could suffer
and it would be more difficult for us to market our products. A significant downgrade could result in a substantial loss of business as ceding companies move to other reinsurers with higher ratings, and a significant downgrade to a rating below A-
by A.M. Best or S & P could trigger provisions allowing some cedants to opt to cancel their reinsurance contracts with us.



|Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds.
|------- | -----------------------------------------------------------

(a) None.

(b) None.

(c) Issuer Purchases of Equity Securities.



|                 |  |                                |  |                                |  |                                                                         |  |                                                                                      
|---------------- |  | ------------------------------ |  | ------------------------------ |  | ----------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------
|Period           |  | Total Numberof SharesPurchased |  | AveragePrice Paid per Share /$ |  | Total Number ofShares Purchased asPart of the PubliclyAnnounced Program |  | Maximum Dollar value ofShares that may yet bePurchased under theProgram / 000s U.S. $
|April 1-30, 2007 |  |                               |  |                               |  |                                                                        |  | 200,000                                                                              
|May 1-31, 2007   |  |                               |  |                               |  |                                                                        |  | 200,000                                                                              
|June 1-30, 2007  |  | 3,188,669                      |  | 31.331                         |  | 3,188,669                                                               |  | 100,000                                                                              
|Total            |  | 3,188,669                      |  | 31.331                         |  | 3,188,669                                                               |  |                                                                                      

On April 24, 2007, the Company announced that its Board of Directors had authorized a share
repurchase of up to $200 million of the Companys common shares. Such repurchase may be conducted by means of open market repurchases, privately negotiated transactions (including accelerated share repurchase plans or use of a forward contract
to repurchase shares) or otherwise, at prices that are prevailing market prices and in accordance with applicable securities laws. The expiration date of the program is May 1, 2008. During the second quarter of 2007, the Company repurchased
$100 million of its common shares.



|Item 3. | Defaults upon Senior Securities.
|------- | --------------------------------

NONE



20



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

On June 22, 2007 the Annual General Meeting of shareholders was held. At the meeting, shareholders were asked to vote upon the resolutions set forth below. The following tabulation indicates the number of shares for or against, or
withheld, or abstaining with respect to each resolution after giving affect to the voting limitations contained in the Companys Bye-laws:

i) electing the following persons as directors to hold office until the Companys next Annual General Meeting or until their successors are elected or appointed or their offices are otherwise vacated:



|                                     |  |            |  |         
|------------------------------------ |  | ---------- |  | --------
|                                     |  | FOR        |  | WITHHELD
|Frank Mutch                          |  | 57,882,062 |  | 77,036  
|James P. Bryce                       |  | 57,868,262 |  | 90,836  
|Dr. the Honourable Clarence E. James |  | 57,902,539 |  | 56,559  
|Peter S. Christie                    |  | 57,775,498 |  | 183,600 
|Kenneth L. Hammond                   |  | 57,775,348 |  | 183,750 
|Antony P.D. Lancaster                |  | 57,889,664 |  | 69,434  

ii) authorizing the Board of Directors to fill vacancies in their number not filled at a general
meeting or arising as a result of an increase in the size of the Board:



|           |  |         |  |        
|---------- |  | ------- |  | -------
|FOR        |  | AGAINST |  | ABSTAIN
|57,076,312 |  | 849,281 |  | 33,505 

iii) re-appointing KPMG as the Companys independent auditors of the Company for its fiscal
year ending December 31, 2007 and authorizing the Audit Committee to set the compensation of the auditors:



|           |  |         |  |        
|---------- |  | ------- |  | -------
|FOR        |  | AGAINST |  | ABSTAIN
|57,782,711 |  | 166,606 |  | 9,781  

iv) approving the Companys 2007 Incentive Plan:



|           |  |            |  |        
|---------- |  | ---------- |  | -------
|FOR        |  | AGAINST    |  | ABSTAIN
|37,825,230 |  | 17,054,405 |  | 57,830 

v) approving the amendment of the Companys Bye-laws to remove provisions relating to American
International Group, Inc:



|           |  |         |  |        
|---------- |  | ------- |  | -------
|FOR        |  | AGAINST |  | ABSTAIN
|54,871,297 |  | 29,322  |  | 36,846 

vi) approving the amendment of the Companys Bye-laws to modernize the Bye-laws:



|           |  |            |  |        
|---------- |  | ---------- |  | -------
|FOR        |  | AGAINST    |  | ABSTAIN
|35,768,597 |  | 19,138,358 |  | 30,510 

All resolutions were passed by show of hands. No other business was transacted.



|Item 5. | Other Information.
|------- | ------------------

NONE



21



---

|Item 6. | Exhibits.
|------- | ---------

(a) Exhibits



|              |  |                 |  |                                                                                                       
|------------- |  | --------------- |  | ------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Methodof Filing |  | Description                                                                                           
|3.1           |  | (2)             |  | Memorandum of Association of the Company                                                              
|3.2           |  | (1)             |  | Amended and Restated Bye-Laws of the Company                                                          
|3.3           |  | (2)             |  | Form of Memorandum of Increase of Share Capital                                                       
|11.1          |  | (1)             |  | Reconciliation of basic and diluted net income per common share (EPS)                               
|12.1          |  | (1)             |  | Statement of Computation of Ratios of Earnings to Fixed Charges                                       
|31.1          |  | (1)             |  | Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
|31.2          |  | (1)             |  | Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
|32.1          |  | (3)             |  | Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
|32.2          |  | (3)             |  | Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002

---

|(1) | Filed herewith
|--- | --------------

|(2) | Incorporated by reference to the corresponding exhibit on our Registration Statement on Form S-1 (No. 333-00088).
|--- | -----------------------------------------------------------------------------------------------------------------

|(3) | These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and (b) of Section 1350, Chapter 63
of Title 18, United States Code), and are not being filed as exhibits to this report.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



---

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 July 30, 2007 |  |  |  | /s/ James P. Bryce                               
|                   |  |  |  | James P. Bryce                                   
|                   |  |  |  | President and Chief Executive Officer            
|                   |  | 
|Date July 30, 2007 |  |  |  | /s/ John R. Weale                                
|                   |  |  |  | John R. Weale                                    
|                   |  |  |  | Senior Vice President and Chief Financial Officer



23



---

EXHIBIT INDEX



|              |  |                 |  |                                                                                                       
|------------- |  | --------------- |  | ------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Methodof Filing |  | Description                                                                                           
|3.1           |  | (2)             |  | Memorandum of Association of the Company                                                              
|3.2           |  | (1)             |  | Amended and Restated Bye-Laws of the Company                                                          
|3.3           |  | (2)             |  | Form of Memorandum of Increase of Share Capital                                                       
|11.1          |  | (1)             |  | Reconciliation of basic and diluted net income per common share (EPS)                               
|12.1          |  | (1)             |  | Statement of Computation of Ratios of Earnings to Fixed Charges                                       
|31.1          |  | (1)             |  | Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
|31.2          |  | (1)             |  | Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
|32.1          |  | (3)             |  | Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
|32.2          |  | (3)             |  | Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002

---

|(1) | Filed herewith.
|--- | ---------------

|(2) | Incorporated by reference to the corresponding exhibit on our Registration Statement on Form S-1 (No. 333-00088).
|--- | -----------------------------------------------------------------------------------------------------------------

|(3) | These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and (b) of Section 1350, Chapter 63
of Title 18, United States Code), and are not being filed as exhibits to this report.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24