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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 September 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 October 26, 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)



|                                                                                                                                       |  |                         |           |   |                        |   |          
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | --------- | - | ---------------------- | - | ---------
|                                                                                                                                       |  | As ofSeptember 30, 2007 |           |   | As ofDecember 31, 2006
|                                                                                                                                       |  | (unaudited)             |           |   |                       
|ASSETS:                                                                                                                                |  |                         |           |   |                        |   |          
|                                                                                                                                       |  |                        
|Fixed maturity investments, at fair value (amortized cost 2007: $1,834,904; 2006: $1,808,917)                                          |  | $                       | 1,853,442 |   |                        | $ | 1,819,561
|Equity investments, at fair value (cost 2007: $484,959; 2006: $460,197)                                                                |  |                         | 635,827   |   |                        |   | 577,549  
|Cash and cash equivalents                                                                                                              |  |                         | 50,252    |   |                        |   | 88,415   
|Reinsurance premiums receivable                                                                                                        |  |                         | 149,780   |   |                        |   | 113,811  
|Deferred premiums ceded                                                                                                                |  |                         | 5,403     |   |                        |   | 2,823    
|Losses and loss adjustment expenses recoverable                                                                                        |  |                         | 27,434    |   |                        |   | 1,989    
|Accrued investment income                                                                                                              |  |                         | 26,900    |   |                        |   | 28,469   
|Deferred acquisition costs                                                                                                             |  |                         | 17,115    |   |                        |   | 9,551    
|Prepaid expenses and other assets                                                                                                      |  |                         | 4,790     |   |                        |   | 3,261    
|                                                                                                                                       |  |                         |           |   |                        |   |          
|TOTAL ASSETS                                                                                                                           |  | $                       | 2,770,943 |   |                        | $ | 2,645,429
|                                                                                                                                       |  |                         |           |   |                        |   |          
|                                                                                                                                       |  |                        
|LIABILITIES:                                                                                                                           |  |                         |           |   |                        |   |          
|                                                                                                                                       |  |                        
|Reserve for losses and loss adjustment expenses                                                                                        |  | $                       | 526,419   |   |                        | $ | 548,627  
|Unearned premiums                                                                                                                      |  |                         | 154,214   |   |                        |   | 80,043   
|Reinsurance premiums payable                                                                                                           |  |                         | 6,735     |   |                        |   | 4,680    
|Deferred fees and commissions                                                                                                          |  |                         | 866       |   |                        |   | 1,150    
|Accounts payable and accrued liabilities                                                                                               |  |                         | 19,743    |   |                        |   | 19,974   
|                                                                                                                                       |  |                         |           |   |                        |   |          
|TOTAL LIABILITIES                                                                                                                      |  |                         | 707,977   |   |                        |   | 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                                                                                                             |  |                         | 1,404,180 |   |                        |   | 1,474,092
|Retained earnings                                                                                                                      |  |                         | 658,775   |   |                        |   | 388,826  
|Accumulated other comprehensive (loss) income                                                                                          |  |                         | (686      | ) |                        |   | 127,310  
|                                                                                                                                       |  |                         |           |   |                        |   |          
|TOTAL SHAREHOLDERS EQUITY                                                                                                             |  |                         | 2,062,966 |   |                        |   | 1,990,955
|                                                                                                                                       |  |                         |           |   |                        |   |          
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                             |  | $                       | 2,770,943 |   |                        | $ | 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)



|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|-------------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------------- | - | ---------- | ----------- |  | - | ----------- | - |  | - | ---------- | -
|                                                   |  | Quarter ended September 30, |            |   | Nine months ended September 30, |  
|                                                   |  | 2007                        |            |   | 2006                            |   |            | 2007        |  |   | 2006        |  
|                                                   |  | (unaudited)                 |            |   | (unaudited)                     |   |            | (unaudited) |  |   | (unaudited) |  
|REVENUES:                                          |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Gross premiums written                             |  | $                           | 43,386     |   |                                 | $ | 56,288     |             |  | $ | 388,888     |   |  | $ | 412,206    |  
|Change in unearned premiums                        |  |                             | 58,227     |   |                                 |   | 56,617     |             |  |   | (74,171     | ) |  |   | (102,023   | )
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Premiums earned                                    |  |                             | 101,613    |   |                                 |   | 112,905    |             |  |   | 314,717     |   |  |   | 310,183    |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Reinsurance premiums ceded                         |  |                             | (1,656     | ) |                                 |   | (1,585     | )           |  |   | (16,374     | ) |  |   | (16,974    | )
|Change in deferred premiums ceded                  |  |                             | (2,570     | ) |                                 |   | (3,480     | )           |  |   | 2,580       |   |  |   | 2,344      |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Premiums ceded                                     |  |                             | (4,226     | ) |                                 |   | (5,065     | )           |  |   | (13,794     | ) |  |   | (14,630    | )
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Net premiums earned                                |  |                             | 97,387     |   |                                 |   | 107,840    |             |  |   | 300,923     |   |  |   | 295,553    |  
|Net investment income                              |  |                             | 32,451     |   |                                 |   | 25,383     |             |  |   | 97,465      |   |  |   | 81,051     |  
|Net gains on investments                           |  |                             | 30,719     |   |                                 |   | 9,072      |             |  |   | 41,264      |   |  |   | 979        |  
|Other income                                       |  |                             | 160        |   |                                 |   | 979        |             |  |   | 1,047       |   |  |   | 2,741      |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             | 160,717    |   |                                 |   | 143,274    |             |  |   | 440,699     |   |  |   | 380,324    |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|EXPENSES:                                          |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Net losses and loss adjustment expenses            |  |                             | 30,426     |   |                                 |   | 7,918      |             |  |   | 170,589     |   |  |   | 43,401     |  
|Net acquisition costs                              |  |                             | 9,817      |   |                                 |   | 9,869      |             |  |   | 30,402      |   |  |   | 27,701     |  
|General and administrative expenses                |  |                             | 5,840      |   |                                 |   | 10,435     |             |  |   | 19,798      |   |  |   | 25,556     |  
|Net exchange loss (gain)                           |  |                             | 1,422      |   |                                 |   | 87         |             |  |   | 1,519       |   |  |   | (2,768     | )
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             | 47,505     |   |                                 |   | 28,309     |             |  |   | 222,308     |   |  |   | 93,890     |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|NET INCOME                                         |  |                             | 113,212    |   |                                 |   | 114,965    |             |  |   | 218,391     |   |  |   | 286,434    |  
|                                                   |  |                             |            |  
|Dividends on preferred shares                      |  |                             | 4,329      |   |                                 |   | 4,329      |             |  |   | 12,893      |   |  |   | 12,941     |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Net income available to common shareholders        |  | $                           | 108,883    |   |                                 | $ | 110,636    |             |  | $ | 205,498     |   |  | $ | 273,493    |  
|                                                   |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                   |  |                             |            |  
|Basic net income per common share                  |  | $                           | 1.80       |   |                                 | $ | 1.74       |             |  | $ | 3.29        |   |  | $ | 4.30       |  
|Diluted net income per common share                |  | $                           | 1.63       |   |                                 | $ | 1.60       |             |  | $ | 3.06        |   |  | $ | 3.99       |  
|                                                   |  |                             |            |  
|Weighted average number of common shares - basic   |  |                             | 60,564,354 |   |                                 |   | 63,646,666 |             |  |   | 62,485,316  |   |  |   | 63,629,883 |  
|Weighted average number of common shares - diluted |  |                             | 69,552,695 |   |                                 |   | 71,855,963 |             |  |   | 71,477,568  |   |  |   | 71,838,779 |  

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)



|                                                             |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  
|------------------------------------------------------------ |  | --------------------------- | ------- | ----------- | ------------------------------- | ------- | ----------- |  | ----------- | ------- |  | - | ------- | -
|                                                             |  | Quarter ended September 30, |         |             | Nine months ended September 30, |        
|                                                             |  | 2007                        |         | 2006        |                                 |         | 2007        |  | 2006        |        
|                                                             |  | (unaudited)                 |         | (unaudited) |                                 |         | (unaudited) |  | (unaudited) |        
|NET INCOME                                                   |  | $                           | 113,212 |             | $                               | 114,965 |             |  | $           | 218,391 |  | $ | 286,434 |  
|                                                             |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  
|Other comprehensive income:                                  |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  
|Net holding gains on investments during period               |  |                             |        |             |                                 | 49,606  |             |  |             |        |  |   | 22,311  |  
|Reclassification adjustment for gains included in net income |  |                             |        |             |                                 | (9,072  | )           |  |             |        |  |   | (979    | )
|                                                             |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  
|                                                             |  |                             |        |             |                                 | 40,534  |             |  |             |        |  |   | 21,332  |  
|                                                             |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  
|COMPREHENSIVE INCOME                                         |  | $                           | 113,212 |             | $                               | 155,499 |             |  | $           | 218,391 |  | $ | 307,766 |  
|                                                             |  |                             |         |             |                                 |         |             |  |             |         |  |   |         |  

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)



|                                                  |  |                         |           |   |                        |   |           |  
|------------------------------------------------- |  | ----------------------- | --------- | - | ---------------------- | - | --------- | -
|                                                  |  | As ofSeptember 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                  |  |                         | 5,199     |   |                        |   | 2,217     |  
|Net change in deferred compensation               |  |                         | (1,134    | ) |                        |   | 1,051     |  
|                                                  |  |                         |           |   |                        |   |           |  
|Balance, end of period                            |  | $                       | 1,404,180 |   |                        | $ | 1,474,092 |  
|                                                  |  |                         |           |   |                        |   |           |  
|                                                  |  |                        
|RETAINED EARNINGS:                                |  |                         |           |   |                        |   |           |  
|Balance, beginning of year                        |  | $                       | 388,826   |   |                        | $ | 52,126    |  
|Cumulative-effect adjustment of adopting SFAS 159 |  |                         | 127,996   |   |                        |   |          |  
|Net income                                        |  |                         | 218,391   |   |                        |   | 394,585   |  
|Reduction on common share repurchase              |  |                         | (25,991   | ) |                        |   |          |  
|Dividends paid and accrued                        |  |                         | (50,447   | ) |                        |   | (57,885   | )
|                                                  |  |                         |           |   |                        |   |           |  
|Balance, end of period                            |  | $                       | 658,775   |   |                        | $ | 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                        |  | $                       | 2,062,966 |   |                        | $ | 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)



|                                                                                        |  |                                |          |   |             |   |            |  
|--------------------------------------------------------------------------------------- |  | ------------------------------ | -------- | - | ----------- | - | ---------- | -
|                                                                                        |  | Nine months endedSeptember 30, |         
|                                                                                        |  | 2007                           |          |   | 2006        |  
|                                                                                        |  | (unaudited)                    |          |   | (unaudited) |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                   |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|Net income                                                                              |  | $                              | 218,391  |   |             | $ | 286,434    |  
|Adjustments to reconcile net income to cash provided by (used in) operating activities: |  |                                |          |   |             |   |            |  
|Amortization of fixed maturity discounts, net                                           |  |                                | (3,042   | ) |             |   | (8,095     | )
|Net gains on investments                                                                |  |                                | (41,264  | ) |             |   | (979       | )
|Stock compensation                                                                      |  |                                | 4,067    |   |             |   | 2,542      |  
|Changes in:                                                                             |  |                                |          |   |             |   |            |  
|Reinsurance premiums receivable                                                         |  |                                | (35,969  | ) |             |   | (2,119     | )
|Deferred premiums ceded                                                                 |  |                                | (2,580   | ) |             |   | (2,343     | )
|Loss and loss adjustment expenses recoverable                                           |  |                                | (25,445  | ) |             |   | (1,083     | )
|Accrued investment income                                                               |  |                                | 1,569    |   |             |   | (3,052     | )
|Deferred acquisition costs                                                              |  |                                | (7,564   | ) |             |   | (10,790    | )
|Prepaid expenses and other assets                                                       |  |                                | (1,529   | ) |             |   | 1,501      |  
|Reserve for losses and loss adjustment expenses                                         |  |                                | (22,208  | ) |             |   | (420,041   | )
|Unearned premiums                                                                       |  |                                | 74,171   |   |             |   | 102,024    |  
|Reinsurance premiums payable                                                            |  |                                | 2,055    |   |             |   | 4,707      |  
|Deferred fees and commissions                                                           |  |                                | (284     | ) |             |   | 985        |  
|Accounts payable and accrued liabilities                                                |  |                                | (278     | ) |             |   | (1,963     | )
|                                                                                        |  |                                |          |   |             |   |            |  
|Cash provided by (used in) operating activities                                         |  |                                | 160,090  |   |             |   | (52,272    | )
|                                                                                        |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                   |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|Purchases of fixed maturity investments                                                 |  |                                | (871,344 | ) |             |   | (1,396,085 | )
|Proceeds from sale of fixed maturity investments                                        |  |                                | 757,827  |   |             |   | 1,040,990  |  
|Proceeds from maturities of fixed maturity investments                                  |  |                                | 90,425   |   |             |   | 461,450    |  
|Purchases of equity investments                                                         |  |                                | (24,762  | ) |             |   | (104,059   | )
|Proceeds from sale of equity investments                                                |  |                                |         |   |             |   | 113,683    |  
|                                                                                        |  |                                |          |   |             |   |            |  
|Cash (used in) provided by investing activities                                         |  |                                | (47,854  | ) |             |   | 115,979    |  
|                                                                                        |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                   |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|Repurchases of common shares                                                            |  |                                | (100,000 | ) |             |   |           |  
|Net proceeds from share issuance                                                        |  |                                |         |   |             |   | (3         | )
|Cash dividends paid to shareholders                                                     |  |                                | (50,399  | ) |             |   | (43,901    | )
|                                                                                        |  |                                |          |   |             |   |            |  
|Cash used in financing activities                                                       |  |                                | (150,399 | ) |             |   | (43,904    | )
|                                                                                        |  |                                |          |   |             |   |            |  
|                                                                                        |  |                               
|Net (decrease) increase in cash and cash equivalents                                    |  |                                | (38,163  | ) |             |   | 19,803     |  
|Cash and cash equivalents, beginning of period                                          |  |                                | 88,415   |   |             |   | 31,113     |  
|                                                                                        |  |                                |          |   |             |   |            |  
|Cash and cash equivalents, end of period                                                |  | $                              | 50,252   |   |             | $ | 50,916     |  
|                                                                                        |  |                                |          |   |             |   |            |  

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)



|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 nine-month periods ended September 30, 2007 and 2006, respectively,
the consolidated balance sheet as of September 30, 2007 and the consolidated statements of cash flows for the nine months ended September 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 and subsequent quarterly filings. 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 August 15, 2007 we paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of record on August 1, 2007.

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

On October 23, 2007 we declared a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share, to be paid on November 15,
2007 to preferred shareholders of record on November 1, 2007.

On October 23, 2007 we declared a common stock dividend of $0.20
per share, to be paid on December 13, 2007 to shareholders of record on November 28, 2007.



|3. | ACCOUNTING FOR STOCK-BASED COMPENSATION AND DISCLOSURE:
|-- | -------------------------------------------------------

The Company adopted a Stock Option Plan (the Option Plan), effective February 15, 1996 and the Company adopted a Stock Incentive Plan (the 2003 Stock Incentive Plan), effective June 13, 2003. 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 of 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 under the 2007 Incentive Plan,



7



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nor does the Company currently expect to make any awards under the 2007 Incentive Plan until the fiscal year beginning on January 1, 2008.

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



|                                                           |  |                                 |  |                              |       |                 |         |                              |   |      
|---------------------------------------------------------- |  | ------------------------------- |  | ---------------------------- | ----- | --------------- | ------- | ---------------------------- | - | -----
|                                                           |  | Nine months ended September 30,
|                                                           |  | 2007                            |  | 2006                        
|                                                           |  | Number ofshares                 |  | Weightedaverageexerciseprice |       | Number ofshares |         | WeightedaverageexercisePrice
|Outstanding, beginning of period                           |  | 611,625                         |  | $                            | 34.30 |                 | 452,125 |                              | $ | 36.47
|Granted                                                    |  |                                |  | $                            |      |                 | 162,500 |                              | $ | 28.00
|Exercised                                                  |  |                                |  | $                            |      |                 | 1,500   |                              | $ | 16.54
|Forfeited                                                  |  |                                |  | $                            |      |                 |        |                              | $ |     
|Outstanding, end of period                                 |  | 611,625                         |  | $                            | 34.30 |                 | 613,125 |                              | $ | 34.27
|Exercisable, end of period                                 |  | 379,750                         |  | $                            | 34.16 |                 | 233,750 |                              | $ | 26.60
|                                                           |  |                                 |  |                             
|Weighted average fair value of options granted (per share) |  |                                 |  | $                            |      |                 |         |                              | $ | 8.99 

The total intrinsic value of stock options exercised for the nine-month period ended
September 30, 2007 was $nil (2006: $12). The weighted average remaining contractual period as of September 30, 2007 was 6.5 years and 5.7 years for outstanding and exercisable options respectively. The aggregate intrinsic value as of
September 30, 2007 was $358 and $255 for outstanding and exercisable options respectively.

There were no options granted during the
nine months ended September 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 |  | Outstanding atSeptember 30,2007 |  | Weightedaveragecontractualperiod inyears |  | Weightedaverageexerciseprice /$ |  | Exercisable atSeptember 30,2007 |  | Weightedaverageexerciseprice /$
|$13-19                  |  | 6,000                           |  | 2.25                                     |  | 15.38                           |  | 6,000                           |  | 15.38                          
|$19-25                  |  | 10,000                          |  | 2.45                                     |  | 21.73                           |  | 10,000                          |  | 21.73                          
|$25-31                  |  | 230,625                         |  | 7.07                                     |  | 27.96                           |  | 108,750                         |  | 27.91                          
|$31-37                  |  | 83,750                          |  | 4.43                                     |  | 31.65                           |  | 83,750                          |  | 31.65                          
|$37-43                  |  | 128,750                         |  | 6.25                                     |  | 38.90                           |  | 95,000                          |  | 38.90                          
|$43-49                  |  | 152,500                         |  | 7.25                                     |  | 43.03                           |  | 76,250                          |  | 43.03                          
|                        |  |                                 |  |                                          | 
|Total                   |  | 611,625                         |  |                                          |  |                                 |  | 379,750                         |  |                                
|                        |  |                                 |  |                                          |  |                                 |  |                                 |  |                                

As of September 30, 2007, there was $4,105 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 1.42 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 Critical Accounting PoliciesInvestments within
Managements Discussion and Analysis of Financial Condition and Results of Operations.

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.



9



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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 audited financial statements for the fiscal year ended December 31, 2006, included in our 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 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 September 30, 2007 the amount of premium accrued resulting from managements estimates for proportional treaties was 3.7% of total gross premiums written for the nine 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 (including the associated rates on linei.e. price) applied to the amount of loss reserves expected to be paid, and the only element of management judgement involved is with respect to the amount of loss reserves as
described below. The amount accrued at September 30, 2007 for estimated reinstatement premiums on Reported But Not Enough losses (RBNE) and Incurred But Not Reported (IBNR) loss reserves, as described below, was $18.1
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 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,



10



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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 had 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          | % |  | 144          | % |  | 144             | % |  | 117,450                                             |  
|Hurricane Katrina        |  | 1.5                                                    | % |  | 1.6         | % |  | -0.4         | % |  |              |   |  | -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 will not be 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 September 30, 2007 managements estimates for IBNR/RBNE represented 47% of total loss reserves. The majority of the estimate relates to
reserves for claims from hurricanes Katrina that affected various parts of Gulf coast states in August 2005, the storm and flooding that affected parts of New South Wales, Australia in early June 2007, and the flooding events that affected various
parts of the United Kingdom in June and July 2007. 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
September 30, 2007 was inaccurate by a factor of 10%, our results of operations would be impacted by a positive or negative movement of $24.8 million. If our total reserve for losses at September 30, 2007 was inaccurate by a factor of 10%,
our incurred losses would be impacted by $52.6 million, which represents 2.6% of shareholders equity at September 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.



|                           |  |                                                      |  |                                          |  |                                              
|-------------------------- |  | ---------------------------------------------------- |  | ---------------------------------------- |  | ---------------------------------------------
|($ in thousands)           |  | Fair Value Measurement at September 30, 2007, using:
|Description                |  | Fair Value Measurements at September 30, 2007        |  | Quoted Prices in Active Markets(Level 1) |  | Significant Other Observable Inputs (Level
2)
|Fixed maturity investments |  | 1,853,442                                            |  | 1,853,442                                |  |                                              
|Equity investments         |  | 635,827                                              |  |                                          |  | 635,827                                      

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 (i.e. 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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 (i.e. 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 September 30, 2007 we did not hold any fixed maturity securities that were 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 $128.0 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.

As investments are now reported as trading, the change in their fair value during the nine months ended September 30, 2007 of $41.4 million is
included in net gains on investments within our consolidated statements of income. The increase is made up of an increase from equity investments of $33.5 million and an increase from fixed maturity investments of $7.9 million.

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 on investments for the nine months ended September 30, 2006, was $26.6 million. Had we been able to apply the same SFAS 159 accounting in 2006, we would have had an increase in net gains on investments of $21.3 million,
and therefore net income would have been $155.5 million for the quarter ended September 30, 2006 and $307.8 million for the nine months ended September 30, 2006.



13



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RESULTS OF OPERATIONS, QUARTERS ENDED SEPTEMBER 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 September 30, 2007.

Our net income for the quarter ended September 30, 2007 was $113.2 million, compared to $115.0
million for the quarter ended September 30, 2006. The primary reason for the decrease is the increase in incurred losses, primarily resulting from floods in the United Kingdom. In addition, we earned less premiums in the third quarter of 2007
compared to the third quarter of 2006, but this was offset by improved investment income and net gains from investments, and a reduction in general and administrative expenses, all the details of which are discussed below.

In the quarter ended September 30, 2007, we wrote gross premiums of $43.4 million, compared to $56.3 million in the third quarter of 2006. We wrote
premiums in respect of new business totaling $10.1 million, but premiums from existing business were $20.6 million less in the third quarter of 2007 in comparison to the third quarter of 2006, mostly due to program re-structuring, including changes
to inception dates, increased client retentions, changes to layering within reinsurance programs and rates on line. Business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection,
totaled $0.4 million. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants actual exposure base and the original estimates thereof, were $0.2 million less in the third quarter of 2007 in
comparison to the corresponding period of 2006. Reinstatement premiums in the third quarter of 2007 were $1.8 million less than in the corresponding period of 2006, primarily due to accrual adjustments for reinstatement premiums from prior year
events where estimated ultimate losses have reduced.

In the quarter ended September 30, 2007, we ceded $1.7 million of premiums to
our retrocessional facilities, compared with $1.6 million in the third 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 $0.3 million, were also ceded to our retrocessionnaires, for those
contracts where we had benefited from retrocessional recoveries. Net premiums earned in the quarter ended September 30, 2007 were $97.4 million, compared to $107.8 million in the third quarter of 2006.

Net investment income was $32.5 million in the quarter ended September 30, 2007, compared to $25.4 million in the third quarter of 2006. In the
third quarter of 2007 we received dividends of $7.8 million from our investment in a fund of hedge funds. We did not receive any dividends from this investment in the third quarter of 2006.

We recognized a net gain of $30.7 million from investments in the quarter ended September 30, 2007, compared to a net gain of $9.1 million in the
third quarter of 2006. The unrealized appreciation included in the net gain from investments was $31.7 million. 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
July 2006 we sold a $20.0 million portion from our investment in a global equity fund, realizing a gain of $8.2 million. In addition, our net gain in the third quarter of 2006 included a write-down of $0.9 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
September 30, 2007, we incurred net losses and loss adjustment expenses of $30.4 million, compared to $7.9 million in the third quarter of 2006. Net incurred losses in the third quarter of 2007 included $59.3 million with respect to the
flooding that impacted various parts of the United Kingdom in July of this year. This was offset in part by reductions to reserves for prior events totaling $26.9 million, the largest components of which were a reduction of $12.1 million to our
estimate of ultimate loss from the earlier U.K. flood losses and an $11.0 million reduction in our estimate of ultimate loss from windstorm Kyrill. We also benefitted from a $3.9 million release of reserves from our proportional aviation portfolio,
offset in part by normal attritional losses from other proportional treaties.



14



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Net acquisition costs incurred, which consist primarily of commissions and brokerage fees paid to
intermediaries for the production of business, were $9.8 million for the quarter ended September 30, 2007, compared to $9.9 million in the third quarter of 2006. These costs have increased in relation to earned premiums partly as a result of a
larger proportion of earned premium being generated from the United States, on which federal excise tax (FET) is applicable and partly because of increases 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 $5.8 million in the quarter ended September 30, 2007, compared to $10.4 million in the corresponding period
of 2006. The primary area of decrease was administrative service fee expense, which was $5.3 million less in the third quarter of 2007 compared to the third quarter of 2006. This was the result of a one-time adjustment following the expiration of
our previous administrative services agreement in the third quarter of 2006. This saving was offset in part by increases to legal fees, audit fees and other professional or consulting fees.

RESULTS OF OPERATIONS, NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

Our net income for the nine months ended September 30, 2007 was $218.4 million, compared to $286.4 million for the nine months ended September 30, 2006. The primary reason for the decrease is the increase in
incurred losses, primarily resulting from floods in the United Kingdom and storm/flooding that affected New South Wales, Australia. This decrease was partially offset by the increase in net gains on investments, the increase in investment income and
the increase in earned premiums.

In the nine months ended September 30, 2007, we wrote premiums of $388.9 million, compared to $412.2
million in the first nine months of 2006, a decrease of 6%. The effect of changes to business written for existing clients, including pricing, changes to program structure and/or renewal dates, as well as changes to foreign exchange rates, was an
increase of $1.0 million. Business that was not renewed in the nine months ended September 30, 2007 totalled $59.9 million and this was only partly offset by new business written totaling $28.1 million during the same period. Adjustment
premiums were $5.9 million in the first nine months of 2007 compared to $9.0 million in the first nine months of 2006. Reinstatement premiums were $10.6 million higher in the first nine months of 2007, compared to the first nine months of 2006,
primarily due to accruals resulting from anticipated claims from U.K. floods in June and July, and windstorm Kyrill.

In the nine months
ended September 30, 2007, we ceded $16.4 million of premiums to our retrocessional facilities, compared with $17.0 million for the nine months ended September 30, 2006, a decrease of 4%. 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 $1.9 million were also ceded to our retrocessionnaires, for those contracts where we had benefited from retrocessional recoveries. Net premiums earned in the nine months ended September 30, 2007 were
$300.9 million, compared to $295.6 million in the first nine months of 2006, an increase of 2%, which was mostly due to the impact of increased reinstatement premiums as a result of increased loss activity during the period, offset in part by
reduced excess of loss premium adjustments.

Net investment income was $97.5 million in the nine months ended September 30, 2007,
compared to $81.1 million in the first nine months of 2006. Investment income in the nine months ended September 30, 2007 included $22.4 million in dividends from our investments in equity fund and a fund of hedge funds. In the first nine
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 nine months ended September 30, 2007 of $41.3 million, compared to $1.0 million in the first nine
months of 2006. The unrealized appreciation included in the net gain from investments was $41.4 million. 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 and July 2006,
we realized gains from the sales of investments in two equity funds, in the aggregate amount of $36.0 million. However, net gains in the first nine months of 2006 included a write-down of $26.6 million in the cost basis of certain fixed income
securities where management determined there had been a decline in value that was other than temporary.



15



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In the nine months ended September 30, 2007, we incurred net losses and loss adjustment expenses of
$170.6 million, compared to $43.4 million in the first nine months of 2006. In addition to the event noted above, net incurred losses included $35.0 million from windstorm Kyrill that swept across northern Europe in late January; $50.7 million with
respect to the storm and subsequent flooding that affected parts of New South Wales, Australia in early June 2007; and $50.5 million with respect to the flooding that impacted parts of northern England in June 2007. However, we benefited from
reductions in the ultimate estimated losses for prior year events which totaled $20.1 million, as well as a release of pro rata aviation reserves. Net incurred losses in the first nine months of 2006 included claims from cyclone Larry that struck
Queensland, Australia in March 2006, for which we had estimated total net claims in the amount of $7.3 million. The balance of the incurred losses in the first nine months of 2006 related to minor development from the major windstorms of 2005 ($17.0
million), two accidents that occurred in 2005an explosion that occurred in the United Kingdom in December 2005, and a train wreck and associated chemical spill that took place in South Carolina in January 2005 (combined amount $7.3 million) -
and reserves established for pro rata treaty business.

Net acquisition costs incurred were $30.4 million for the nine months ended
September 30, 2007, compared to $27.7 million in the first nine months of 2006. In addition to the impact of the profit commissions and FET previously discussed, acquisition costs have also increased because earned premiums have increased.
General and administrative expenses were $19.8 million in the nine months ended September 30, 2007, compared to $25.6 million in the first nine months of 2006. The primary area of decrease was administrative service fee expense, which was $8.8
million less in the first nine months of 2007 compared to the first nine months of 2006. Other areas of decrease were reductions in bank charges, letters of credit and credit facility fees, and legal fees. These reductions were partly offset by an
increase in salaries and compensation, audit fees, directors fees and other professional or consulting fees.

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 September 30, 2007 was $512.1 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 nine months ended September 30, 2007 were $160.1 million compared to net cash outflows of $52.3
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 $221.9 million in the nine months ended September 30, 2007, compared to $466.0
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 United Kingdom and Australia, as well as the windstorms that took place in 2005.

Net cash outflows from investing
activities in the nine months ended September 30, 2007 were $47.9 million compared to net cash inflows of $116.0 million in the corresponding period of 2006. Net cash outflows from financing activities in the nine months ended
September 30, 2007 were $150.4 million compared to $43.9 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 $38.2 million in the nine months ended September 30, 2007, resulting in a balance of $50.3 million at September 30, 2007.

At
September 30, 2007, 60% 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 September 30, 2007 the average modified duration of IPCs fixed maturity portfolio was 3.3 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.



16



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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 establishment of a trust, or a cash
advance. At September 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 September 30, 2007 and
December 31, 2006, there were outstanding letters of credit of $209.4 million and $375.9 million, respectively. The majority of the amount at the end of September 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 September 30, 2007 and December 31, 2006 was $243.4 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 September 30, 2007 the maximum dividend payable by IPC Holdings under the terms of the facility was $795.6 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.

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.



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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.

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 September 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 September 30, 2007 and 2006 using the historical simulation methodology. At September 30, 2007 the VaR of IPCRes investment portfolio was $28.0 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 September 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 the beginning, quarterly and ending points for the twelve months ended September 30, 2007, and the average thereof (expressed in thousands of U.S. dollars):



|                          |  |                       |         |   |                  |   |         |                   |  |   |                      |   |  |                       |         |   |                                              |   |         |   |  |   |         |  
|------------------------- |  | --------------------- | ------- | - | ---------------- | - | ------- | ----------------- |  | - | -------------------- | - |  | --------------------- | ------- | - | -------------------------------------------- | - | ------- | - |  | - | ------- | -
|Market Risk               |  | At September 30, 2007 |         |   | At June 30, 2007 |   |         | At March 31, 2007 |  |   | At December 31, 2006 |   |  | At September 30, 2006 |         |   | Average for 12months endedSeptember 30, 2007 |  
|Currency                  |  | $                     | 2,508   |   |                  | $ | 2,669   |                   |  | $ | 2,703                |   |  | $                     | 2,628   |   |                                              | $ | 2,749   |   |  | $ | 2,651   |  
|Interest Rate             |  |                       | 22,889  |   |                  |   | 25,917  |                   |  |   | 25,444               |   |  |                       | 27,270  |   |                                              |   | 31,210  |   |  |   | 26,546  |  
|Equity (incl. hedge fund) |  |                       | 21,509  |   |                  |   | 20,023  |                   |  |   | 18,814               |   |  |                       | 18,963  |   |                                              |   | 17,793  |   |  |   | 19,421  |  
|                          |  |                       |         |   |                  |   |         |                   |  |   |                      |   |  |                       |         |   |                                              |   |         |   |  |   |         |  
|Sum of Risk               |  |                       | 46,906  |   |                  |   | 48,609  |                   |  |   | 46,961               |   |  |                       | 48,861  |   |                                              |   | 51,752  |   |  |   | 48,618  |  
|Diversification Benefit   |  |                       | (18,913 | ) |                  |   | (19,330 | )                 |  |   | (17,254              | ) |  |                       | (15,885 | ) |                                              |   | (18,757 | ) |  |   | (18,028 | )
|                          |  |                       |         |   |                  |   |         |                   |  |   |                      |   |  |                       |         |   |                                              |   |         |   |  |   |         |  
|Total Net Risk            |  | $                     | 27,993  |   |                  | $ | 29,279  |                   |  | $ | 29,707               |   |  | $                     | 32,976  |   |                                              | $ | 32,995  |   |  | $ | 30,590  |  
|                          |  |                       |         |   |                  |   |         |                   |  |   |                      |   |  |                       |         |   |                                              |   |         |   |  |   |         |  

From December 2006 to September 2007, interest rate net VaR decreased primarily due a reduction in
both the level and volatility of interest rates in the U.S. In addition, equity VaR increased due to the increase in volatility of the U.S. equity market, particularly during the third quarter of 2007. 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 September 30, 2007 an estimated $50 million (December 31, 2006 - $25 million) of net reinsurance
premiums receivable, and an estimated $213 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 U.K. sterling, Australian dollar and Euro.
If the dollar weakened 10% against these currencies, our net adverse exchange exposure would be approximately $17 million.



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|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 third-quarter review of
controls we found some exceptions in the effectiveness of controls relating to the recording of outstanding loss reserves. We have therefore conducted additional loss reserve verification procedures and are presently enhancing certain of our
internal controls around the recording of outstanding loss reserves.

During the second-quarter review of controls we 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 enhanced certain of our internal
controls around ceded reinsurance balances and reinstatement premium accruals and believe that the issue has been remediated.

Except for
the preceding items, 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.
|------- | -----------------------------------------------------------

(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                                                                              
|July 1-31, 2007      |  |                               |  |                              |  |                                                                        |  | 100,000                                                                              
|August 1-31, 2007    |  |                               |  |                              |  |                                                                        |  | 100,000                                                                              
|September 1-30, 2007 |  |                               |  |                              |  |                                                                        |  | 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 third quarter of 2007, the Company did not
repurchase any of its common shares.



20



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

NONE



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

NONE



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

NONE



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

(a) Exhibits



|              |  |                 |  |                                                                                                       
|------------- |  | --------------- |  | ------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Methodof Filing |  | Description                                                                                           
|3.1           |  | (2)             |  | Memorandum of Association of the Company                                                              
|              |  |                
|3.2           |  | (3)             |  | Amended and Restated Bye-Laws of the Company                                                          
|              |  |                
|3.3           |  | (2)             |  | Form of Memorandum of Increase of Share Capital                                                       
|              |  |                
|10.1          |  | (1)             |  | Resolution of the Board of Directors Regarding Meeting Attendance Fees                                
|              |  |                
|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          |  | (4)             |  | Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
|              |  |                
|32.2          |  | (4)             |  | 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) | Incorporated by reference to Exhibit 3.2 to our quarterly report on Form 10-Q for the six-months ended June 30, 2007 filed with the SEC on July 30, 2007 (File No.
0-27662).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

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 October 26, 2007 |  | /s/ James P. Bryce                               
|                      |  | James P. Bryce                                   
|                      |  | President and Chief Executive Officer            
|                      | 
|Date October 26, 2007 |  | /s/ John R. Weale                                
|                      |  | John R. Weale                                    
|                      |  | Senior Vice President and Chief Financial Officer



22



---

EXHIBIT INDEX



|              |  |                 |  |                                                                                                       
|------------- |  | --------------- |  | ------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Methodof Filing |  | Description                                                                                           
|3.1           |  | (2)             |  | Memorandum of Association of the Company                                                              
|              |  |                
|3.2           |  | (3)             |  | Amended and Restated Bye-Laws of the Company                                                          
|              |  |                
|3.3           |  | (2)             |  | Form of Memorandum of Increase of Share Capital                                                       
|              |  |                
|10.1          |  | (1)             |  | Resolution of the Board of Directors Regarding Meeting Attendance Fees                                
|              |  |                
|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          |  | (4)             |  | Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
|              |  |                
|32.2          |  | (4)             |  | 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) | Incorporated by reference to Exhibit 3.2 to our quarterly report on Form 10-Q for the six-months ended June 30, 2007 filed with the SEC on July 30, 2007 (File No.
0-27662).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23