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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
   FORM 10-Q [X]
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2004 OR [  ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
 For the transition period from ________ to __________ Commission file number: 0-27662 IPC Holdings, Ltd.  Bermuda
    
    Not Applicable(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 American International Building, 29 Richmond Road, Pembroke, HM 08, Bermuda   (441) 298-5100  
 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes  [ü]   No [  ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act). Yes  [ü]   No [  ] The number of outstanding common shares par value U.S. $0.01 per share of
IPC Holdings, Ltd., as of November 8, 2004, was 48,290,579.




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF (LOSS) INCOMECONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOMECONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sale of Equity Securities and Use of ProceedsItem 3. Defaults upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. Exhibits and Reports on Form 8-KSIGNATURESEXHIBIT INDEXRECONCILIATION OF BASIC AND DILUTED NET INCOME PER COMMON SHARE ("EPS")CERTIFICATIONCERTIFICATIONCERTIFICATIONCERTIFICATION    Table of Contents  
 PART I. FINANCIAL INFORMATION 
 Item 1. Financial Statements 
 IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Expressed in thousands of United States dollars, except for per share amounts) As of
    
    As ofSeptember 30, 2004
    
    December 31, 2003(unaudited)ASSETS:Fixed maturity investments:Available for sale, at fair value
(amortized cost 2004: $1,438,926; 2003: $1,240,188)
    
    $
    1,444,747
    
    
    $
    1,260,467Equity investments, available for sale at fair
value (cost 2004: $333,997; 2003: $248,179)
    
    
    394,725
    
    
    
    319,007Cash and cash equivalents
    
    
    17,371
    
    
    
    91,949Reinsurance premiums receivable
    
    
    118,079
    
    
    
    61,194Deferred premiums ceded
    
    
    6,893
    
    
    
    1,317Loss and loss adjustment expenses recoverable
    
    
    4,226
    
    
    
    1,810Accrued investment income
    
    
    17,466
    
    
    
    19,821Deferred acquisition costs
    
    
    15,073
    
    
    
    8,035Prepaid expenses and other assets
    
    
    5,314
    
    
    
    5,858TOTAL ASSETS
    
    $
    2,023,894
    
    
    $
    1,769,458LIABILITIES:Reserve for losses and loss adjustment expenses
    
    $
    224,207
    
    
    $
    123,320Unearned premiums
    
    
    131,502
    
    
    
    61,795Reinsurance premiums payable
    
    
    8,692
    
    
    
    3,877Deferred fees and commissions
    
    
    2,545
    
    
    
    834Accounts payable and accrued liabilities
    
    
    10,681
    
    
    
    10,473377,627
    
    
    
    200,299SHAREHOLDERS EQUITY:Share capital (Common shares outstanding, par
value U.S. $0.01: 2004: 48,407,204; 2003: 48,292,270
shares)
    
    
    484
    
    
    
    483Additional paid-in capital
    
    
    854,563
    
    
    
    850,133Deferred stock grant compensation
    
    
    (3,191
    )
    
    
    (1,495
    )Retained earnings
    
    
    727,862
    
    
    
    628,931Accumulated other comprehensive income
    
    
    66,549
    
    
    
    91,1071,646,267
    
    
    
    1,569,159TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    2,023,894
    
    
    $
    1,769,458
 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 (LOSS) INCOME (Expressed in thousands of United States dollars, except for per share amounts) Quarter ended September 30,
    
    Nine months ended September 30,2004
    
    2003
    
    2004
    
    2003(unaudited)
    
    (unaudited)
    
    (unaudited)
    
    (unaudited)REVENUES:Gross premiums written
    
    $
    60,688
    
    
    $
    45,804
    
    
    $
    343,751
    
    
    $
    302,254Change in unearned premiums
    
    
    44,178
    
    
    
    35,566
    
    
    
    (69,707
    )
    
    
    (67,123
    )Premiums earned
    
    
    104,866
    
    
    
    81,370
    
    
    
    274,044
    
    
    
    235,131Reinsurance premiums ceded
    
    
    (1,395
    )
    
    
    (1,044
    )
    
    
    (17,958
    )
    
    
    (14,725
    )Change in deferred premiums ceded
    
    
    (3,515
    )
    
    
    (2,552
    )
    
    
    5,576
    
    
    
    3,951Premiums ceded
    
    
    (4,910
    )
    
    
    (3,596
    )
    
    
    (12,382
    )
    
    
    (10,774
    )Net premiums earned
    
    
    99,956
    
    
    
    77,774
    
    
    
    261,662
    
    
    
    224,357Net investment income
    
    
    11,958
    
    
    
    11,725
    
    
    
    37,603
    
    
    
    34,973Net realized (losses) gains on investments
    
    
    (404
    )
    
    
    292
    
    
    
    7,261
    
    
    
    6,432Other income
    
    
    1,296
    
    
    
    856
    
    
    
    3,118
    
    
    
    2,400112,806
    
    
    
    90,647
    
    
    
    309,644
    
    
    
    268,162EXPENSES:Net losses and loss adjustment expenses
    
    
    115,993
    
    
    
    15,778
    
    
    
    134,401
    
    
    
    38,450Net acquisition costs
    
    
    9,622
    
    
    
    7,810
    
    
    
    27,721
    
    
    
    22,629General and administrative expenses
    
    
    5,595
    
    
    
    4,678
    
    
    
    16,341
    
    
    
    13,583Net exchange (gain) loss
    
    
    (606
    )
    
    
    249
    
    
    
    1,203
    
    
    
    (1,748
    )130,604
    
    
    
    28,515
    
    
    
    179,666
    
    
    
    72,914NET (LOSS) INCOME
    
    $
    (17,798
    )
    
    $
    62,132
    
    
    $
    129,978
    
    
    $
    195,248Basic net (loss) income per common share
    
    $
    (0.37
    )
    
    $
    1.29
    
    
    $
    2.69
    
    
    $
    4.05Diluted net (loss) income per common share
    
    $
    (0.37
    )
    
    $
    1.29
    
    
    $
    2.69
    
    
    $
    4.04Weighted average number of common shares
- basic
    
    
    48,305,708
    
    
    
    48,214,793
    
    
    
    48,276,603
    
    
    
    48,194,170Weighted average number of common shares
- diluted
    
    
    48,305,708
    
    
    
    48,300,348
    
    
    
    48,362,411
    
    
    
    48,280,373
 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 (LOSS) INCOME (Expressed in thousands of United States dollars) Quarter ended September 30,
    
    Nine months ended September 30,2004
    
    2003
    
    2004
    
    2003(unaudited)
    
    (unaudited)
    
    (unaudited)
    
    (unaudited)NET (LOSS) INCOME
    
    $
    (17,798
    )
    
    $
    62,132
    
    
    $
    129,978
    
    
    $
    195,248Other comprehensive income (loss):Net holding gains (losses) on
investments during period
    
    
    3,653
    
    
    
    1,103
    
    
    
    (17,297
    )
    
    
    42,068Reclassification adjustment
for losses (gains) included in
net (loss) income
    
    
    404
    
    
    
    (292
    )
    
    
    (7,261
    )
    
    
    (6,432
    )4,057
    
    
    
    811
    
    
    
    (24,558
    )
    
    
    35,636COMPREHENSIVE (LOSS) INCOME
    
    $
    (13,741
    )
    
    $
    62,943
    
    
    $
    105,420
    
    
    $
    230,884
 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 of
    
    As ofSeptember 30, 2004
    
    December 31, 2003(unaudited)COMMON SHARES PAR VALUE $0.01:Balance, beginning of year
    
    $
    483
    
    
    $
    482Additional shares issued
    
    
    1
    
    
    
    1Balance, end of period
    
    $
    484
    
    
    $
    483ADDITIONAL PAID-IN CAPITAL:Balance, beginning of year
    
    $
    850,133
    
    
    $
    846,397Shares issued
    
    
    790
    
    
    
    2,719Shares repurchased
    
    
    (146
    )
    
    
    (1,321
    )Stock options and grants
    
    
    3,786
    
    
    
    2,338Balance, end of period
    
    $
    854,563
    
    
    $
    850,133DEFERRED STOCK GRANT
COMPENSATION:Balance, beginning of year
    
    $
    (1,495
    )
    
    $
    0Stock grants awarded
    
    
    (2,928
    )
    
    
    (2,011
    )Amortization
    
    
    1,232
    
    
    
    516Balance, end of period
    
    $
    (3,191
    )
    
    $
    (1,495
    )RETAINED EARNINGS:Balance, beginning of year
    
    $
    628,931
    
    
    $
    404,345Net income
    
    
    129,978
    
    
    
    260,629Reduction on share repurchase
    
    
    (155
    )
    
    
    (1,334
    )Dividends paid
    
    
    (30,892
    )
    
    
    (34,709
    )Balance, end of period
    
    $
    727,862
    
    
    $
    628,931ACCUMULATED OTHER COMPREHENSIVE
INCOME:Balance, beginning of year
    
    $
    91,107
    
    
    $
    40,259Other comprehensive (loss) income
    
    
    (24,558
    )
    
    
    50,848Balance, end of period
    
    $
    66,549
    
    
    $
    91,107TOTAL SHAREHOLDERS EQUITY
    
    $
    1,646,267
    
    
    $
    1,569,159
 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 ended September 30,2004
    
    2003(unaudited)
    
    (unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    129,978
    
    
    $
    195,248Adjustments to reconcile net income to cash provided
by operating activities:Amortization of fixed maturity premiums, net
    
    
    10,226
    
    
    
    11,167Net realized gains on investments
    
    
    (7,261
    )
    
    
    (6,432
    )Stock compensation
    
    
    1,936
    
    
    
    631Changes in:Reinsurance premiums receivable
    
    
    (56,885
    )
    
    
    (47,298
    )Deferred premiums ceded
    
    
    (5,576
    )
    
    
    (3,952
    )Loss and loss adjustment expenses recoverable
    
    
    (2,416
    )
    
    
    (1,907
    )Accrued investment income
    
    
    2,355
    
    
    
    1,699Deferred acquisition costs
    
    
    (7,038
    )
    
    
    (7,044
    )Prepaid expenses and other assets
    
    
    544
    
    
    
    (2,231
    )Reserve for losses and loss adjustment expenses
    
    
    100,887
    
    
    
    (2,196
    )Unearned premiums
    
    
    69,707
    
    
    
    67,123Reinsurance premiums payable
    
    
    4,815
    
    
    
    4,013Deferred fees and commissions
    
    
    1,711
    
    
    
    2,001Accounts payable and accrued liabilities
    
    
    208
    
    
    
    836Cash provided by operating activities
    
    
    243,191
    
    
    
    211,658CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of fixed maturity investments
    
    
    (1,316,124
    )
    
    
    (785,859
    )Proceeds from sale of fixed maturity investments
    
    
    1,094,273
    
    
    
    546,524Proceeds from maturities of fixed maturity investments
    
    
    14,862
    
    
    
    86,246Purchases of equity investments
    
    
    (100,532
    )
    
    
    (30,532
    )Proceeds from sale of equity investments
    
    
    20,000
    
    
    
    0Cash used in investing activities
    
    
    (287,521
    )
    
    
    (183,621
    )CASH FLOWS FROM FINANCING ACTIVITES:Net proceeds from share issuance
    
    
    644
    
    
    
    67Cash dividends paid to shareholders
    
    
    (30,892
    )
    
    
    (25,061
    )Cash used by financing activities
    
    
    (30,248
    )
    
    
    (24,994
    )Net (decrease) increase in cash and cash equivalents
    
    
    (74,578
    )
    
    
    3,043Cash and cash equivalents, beginning of period
    
    
    91,949
    
    
    
    16,656Cash and cash equivalents, end of period
    
    $
    17,371
    
    
    $
    19,699
 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 (GAAP) and include the accounts of IPC
Holdings, Ltd. (the Company) and its wholly-owned subsidiaries, IPCRe
Limited (IPCRe) and IPCRe Underwriting Services Limited (IPCUSL and,
together with the Company and IPCRe, IPC) and IPCRe Europe Limited,
which is a wholly-owned subsidiary of IPCRe. In the opinion of
management, these financial statements reflect all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations for the quarter and nine month
periods ended September 30, 2004 and 2003, respectively, the balance
sheet as of September 30, 2004 and the cash flows for the nine months
ended September 30, 2004 and 2003, respectively. These interim
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements for the year ended December
31, 2003, in our report on Form 10-K. The results of operations for any
interim period are not necessarily indicative of results for the full
year. 2. DIVIDENDS:  On March 25, 2004 we paid a dividend of $0.20 per share to shareholders of
record on March 9, 2004.On June 24, 2004 we paid a dividend of $0.20 per share to shareholders of
record on June 8, 2004.On September 23, 2004 we paid a dividend of $0.24 per share to shareholders
of record on September 7, 2004.On October 28, 2004 we declared a dividend of $0.24 per
share, to be paid on
December 16, 2004, to shareholders of record on November 30, 2004. 3. ACCOUNTING FOR STOCK-BASED COMPENSATION AND DISCLOSURE:  Management has adopted the fair value method of accounting for stock-based
employee compensation as prescribed by Financial Accounting Standards Board
(FASB) issued Statement No. 123 Accounting for Stock-Based Compensation
(SFAS 123) on a prospective basis for all awards granted, modified or
settled after January 1, 2003. The amount of the charges recorded in the
quarter and nine month periods ended September 30, 2004 were $235 and $704,
respectively. In the corresponding periods in 2003, the charges were $81
and $243, respectively.On June 13, 2003 the shareholders approved a new stock incentive plan. The
plan allows for the issuance of up to five hundred thousand shares as grants
of restricted stock to selected employees to compensate them for their
contributions to the long-term growth and profits of the Company. The charge
recorded for the quarter and nine month periods ended September 30, 2004 were
$292 and $1,232, respectively. For the corresponding periods in 2003, the
charges were $139 and $387, respectively. 7




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The following table illustrates the effect on net income and earnings per
share if the fair value based method had been applied to all outstanding and
unvested awards in each period in accordance with SFAS 123. Quarter ended September 30,
    
    Nine months ended September 30,2004
    
    2003
    
    2004
    
    2003(unaudited)
    
    (unaudited)
    
    (unaudited)
    
    (unaudited)Net (loss) income, as reported
    
    $
    (17,798
    )
    
    $
    62,132
    
    
    $
    129,978
    
    
    $
    195,248Add: Stock-based employee expense
    
    
    235
    
    
    
    81
    
    
    
    704
    
    
    
    243Deduct: Total stock-based
employee expense determined
under fair value based method
for all awards.
    
    
    (363
    )
    
    
    (255
    )
    
    
    (1,087
    )
    
    
    (765
    )Pro forma net (loss) income
    
    $
    (17,926
    )
    
    $
    61,958
    
    
    $
    129,595
    
    
    $
    194,726Earnings per share:Basic  as reported
    
    $
    (0.37
    )
    
    $
    1.29
    
    
    $
    2.69
    
    
    $
    4.05Basic  pro forma
    
    $
    (0.37
    )
    
    $
    1.29
    
    
    $
    2.68
    
    
    $
    4.05Diluted  as reported
    
    $
    (0.37
    )
    
    $
    1.29
    
    
    $
    2.69
    
    
    $
    4.04Diluted  pro forma
    
    $
    (0.37
    )
    
    $
    1.28
    
    
    $
    2.68
    
    
    $
    4.03
 4. NEW ACCOUNTING PRONOUNCEMENTS:  In December 2003, the FASB revised the previously issued Interpretation No.
46, Consolidation of Variable Interest Entities with Interpretation No. 46
(Revised December 2003), Consolidation of Variable Interest Entities (FIN
46-R). FIN 46-R requires a variable interest entity to be consolidated by a
company if that company is the primary beneficiary, as defined in FIN 46-R.
FIN 46-R was effective as of March 31, 2004. Certain disclosures in relation
to IPCs interests in variable interest entities were provided in the audited
consolidated financial statements for the year ended December 31, 2003 in
accordance with the transition requirements of FIN 46-R. The adoption of
this accounting pronouncement did not have any material impact on IPCs
financial position or results of operations.EITF Issue No. 03-01, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments (EITF 03-01) was issued in late 2003.
EITF 03-01 requires certain disclosures regarding fair values and associated
unrealized losses on available-for-sale debt and equity securities accounted
for under FASB Statement No. 115, Accounting for Certain Investments in Debt
and Equity Securities. These disclosures were effective in annual financial
statements for fiscal years ended after December 15, 2003 and, accordingly,
were provided in our financial statements for the year ended December 31,
2003. EITF 03-01 also provides guidance for evaluating whether an
investment is other-than-temporarily impaired. This guidance was scheduled
to be effective for reporting periods beginning after June 30, 2004.
However, in September 2004 the FASB delayed the effective date of the
requirement to record impairment losses in accordance with EITF 03-01 until
new guidance is issued and becomes effective. The Company will assess
whether this guidance will have a material impact on the Companys financial
position or results of operations once the new guidance is released. 8




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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations  Critical Accounting PoliciesThe following is a summary of the accounting policies for the three main
components of our balance sheet and statement of (loss) income: premiums,
losses (claims) including reserves and investments/investment income.PremiumsPremiums 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 no management judgement
is necessary in accounting for this. Premiums are earned on a pro rata
basis over the policy period. For proportional treaties, the amount of
premium is normally estimated at inception by the ceding company. We account
for such premium using the initial estimates, which are reviewed regularly
with respect to the actual premium reported by the ceding company. For the
nine months ended September 30, 2004 the net amount of premium recorded
resulting from managements estimates was less than 1% of total premiums
written. We also accrue for reinstatement premiums (premiums paid to
reinstate reinsurance coverage following a claim). Such accruals are based
upon actual contractual terms applied to the amount of loss reserves expected
to be paid, and the only element of management judgement involved is with
respect to the amount of loss reserves and associated rates on line, as
described below. The amount recorded for the nine months ended September 30,
2004 for estimated reinstatement premiums on Reported But Not Enough losses
(RBNE) and Incurred But Not Reported (IBNR) loss reserves was $15.7
million.Loss ReservesUnder accounting principles generally accepted in the United States of
America, we are not permitted to establish loss reserves until the occurrence
of an event which may give rise to a claim. As a result, only loss reserves
applicable to losses incurred up to the reporting date may be established,
with no allowance for the provision of a contingency reserve to account for
expected future losses. Claims arising from future catastrophic events can
be expected to require the establishment of substantial reserves from time to
time.Estimating appropriate loss reserves for catastrophes is an inherently
uncertain process. Loss reserves represent our estimates, at a given point
in time, of ultimate settlement and administration costs of losses incurred
(including IBNR 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.The reserve for losses and loss adjustment expenses is based upon reports
from industry sources, individual case estimates received from ceding
companies and/or their brokers, output from commercially available
catastrophe loss models and managements estimates. When a catastrophic
event occurs, we first determine which treaties may be affected using our
geographic database of exposures. We then contact the respective brokers and
ceding companies involved with those treaties, to determine their estimate of
involvement and the extent to which the reinsurance program is affected. We
may also use computer modeling to measure and estimate loss exposure under
the actual event scenario, if available. Since 1993, we have contracted with
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. Once an event occurs, we establish a specific
reserve for that event, based upon estimates of total losses incurred by the
ceding insurers as a result of the event and a specific estimate of the
portion of such loss we have reinsured. Managements estimates are used
mostly for IBNR or RBNE loss amounts. For certain catastrophic events there
is considerable uncertainty underlying the assumptions and associated
estimated reserves for losses and loss adjustment expenses. Reserves are
reviewed regularly and, as experience develops and additional information
becomes known, the reserves are adjusted as necessary. Such adjustments, if
necessary, are reflected in results of operations in the period in which they
become known. For excess of loss business, which is generally over 90% of
the premium we write, we are aided by the fact that each treaty has a defined
limit of liability arising from one event. Once that limit has been reached,
we have no further exposure to additional losses from that treaty for the
same event. For proportional treaties, we generally use an initial estimated
loss and loss expense ratio (the ratio of losses and loss adjustment expenses
incurred to premiums earned), based upon information provided by the ceding
company and/or their broker and our historical experience of that treaty, if
any. The estimate is adjusted as actual experience becomes known. 9




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At September 30, 2004 managements estimates for IBNR/RBNE represented
approximately 72% of total loss reserves. The majority of the estimate
relates to reserves for claims from the four hurricanes which struck Florida
and two of the typhoons which struck Japan, in August and September of this
year. If our estimate of IBNR/RBNE at September 30, 2004 was inaccurate by a
factor of 10%, our results of operations would be impacted by a positive or
negative movement of approximately $16.0 million. If our total reserve for
losses at September 30, 2004 was inaccurate by a factor of 10%, our incurred
losses would be impacted by approximately $22.4 million, which represents
approximately 1.4% of shareholders equity. In accordance with IPCRes
registration under the Bermuda Insurance Act 1978 and Related Regulations
(the Insurance Act), the loss reserves are certified annually by an
independent loss reserve specialist.InvestmentsIn accordance with our investment guidelines, our investments consist of
certain marketable equity securities and high-grade marketable fixed income
securities. Investments are considered Available for Sale and are carried
at fair value as determined by the most recently traded price of each
security at the balance sheet date. Unrealized gains and losses are included
within Accumulated other comprehensive income as a separate component of
shareholders equity. Realized gains and losses on sales of investments are
determined on a first-in, first-out basis. Investment income is recorded
when earned and includes the amortization of premiums and discounts on
investments.We regularly monitor the difference between the cost and fair value of our
investments, which involves uncertainty as to whether declines in value are
temporary in nature. If we believe a decline in value of a particular
investment is temporary, we record the decline as an unrealized loss as a
separate component of our shareholders equity. If we believe the decline is
other-than-temporary, we write down the cost basis of the investment to the
market price as of the reporting date and record a realized loss in our
statement of income. The determination that a security has incurred an
other-than-temporary decline in value requires the judgement of IPCs
management, which includes the views of our investment managers and a regular
review of our investments. Our assessment of a decline in value includes our
current judgement as to the financial position and future prospects of the
entity that issued the security. If that judgement changes in the future we
may ultimately record a realized loss, after having originally concluded that
the decline in value was temporary.Generally, we review all securities that are trading at a significant
discount to par, amortized cost (if lower) or cost for an extended period of
time. We generally focus our attention on all securities whose market value
is less than 75% of their cost. The specific factors we consider in
evaluating potential impairment include the following:  
    
    The extent of decline in value
    
    The length of time the security is below cost
    
    The future prospects of the issuer, or in the case of mutual funds, the future prospects of the fund
    
    Whether the decline appears to be related to general market or industry conditions, or is issuer-specific
    
    Our intent and ability to hold the security
    
    Other qualitative and quantitative factors  At September 30, 2004 our equity investments comprised investments in the
following: a U.S. equity fund, a global equity growth fund, a fund of hedge
funds and a fund with attributes similar to those of the S & P 500 Index.
None of the funds have a significant concentration in any one business
sector; accordingly, the value of our equity funds is principally influenced
by macro economic factors rather than issuer-specific factors. Our equity
investments are subject to the same analyses as described above for the
determination of other-than-temporary declines in value. Since there is a
portfolio of securities within each fund, the qualitative issues are usually
broader than those for individual securities and therefore the assessment of
impairment is inherently more difficult and requires more management
judgement.At September 30, 2004 we did not hold any fixed maturity securities that are
not investment grade, not rated or not traded on a recognized exchange.At September 30, 2004 we determined that there was no other-than-temporary
impairment of securities. 10




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RESULTS OF OPERATIONS, QUARTERS ENDED SEPTEMBER 30, 2004 AND 2003  The following is a discussion of the results of operations and financial
position of IPC Holdings, Ltd. References to we, our or IPC mean
IPC Holdings together with its wholly-owned subsidiaries, IPCRe and
IPCUSL. This discussion should be read in conjunction with our
Consolidated Financial Statements and related notes for the nine months
ended September 30, 2004.Our net loss for the quarter ended September 30, 2004 was $(17.8) million,
compared to net income of $62.1 million for the quarter ended September 30,
2003, a decrease of 129%. The results in the current quarter were
significantly impacted by the exceptional sequence of four hurricanes making
landfall in Florida, as well as two typhoons striking Japan, as discussed
below.In the quarter ended September 30, 2004, we wrote premiums of $60.7
million, compared to $45.8 million in the third quarter of 2003, an
increase of 32%. Written premiums in the quarter were higher primarily
because of reinstatement premiums resulting from the significant amount
of losses incurred in the quarter. Reinstatement premiums were $16.7
million in the quarter ended September 30, 2004, compared to $2.1
million in the corresponding quarter of 2003. In addition, we wrote
new business of $1.6 million and premiums from existing business were
approximately $3.5 million more in the third quarter of 2004 in
comparison to the third quarter of 2003, due to larger lines, program
re-structuring and foreign exchange rate differences. These additions
were offset in part by business which was not renewed because of
unsatisfactory terms and conditions, or because the cedant did not
purchase the protection, which totaled approximately $1.8 million.
Adjustment premiums, which are adjustments generally arising from
differences between cedants actual premium income and the original
estimates thereof, were $3.8 million in the third quarter of 2004
compared to $6.8 million in the third quarter of 2003. We retroceded
premiums of $1.4 million in the quarter ended September 30, 2004,
compared to $1.0 million ceded in the third quarter of 2003. We entered
a new, short-term aviation retrocessional contract at the end of
September, 2004. Net premiums earned in the quarter ended September 30,
2004 were $100.0 million, compared to $77.8 million in the third quarter
of 2003, an increase of 29%. Net premiums earned were higher primarily
because of the increase in reinstatement premiums, together with the
overall increase in written premiums during the past twelve months.Net investment income was $12.0 million in the quarter ended September
30, 2004, compared to $11.7 million in the third quarter of 2003, an
increase of 2%. The overall yield of the fixed income portfolio was
less for the quarter ended September 30, 2004 than for the corresponding
quarter in 2003, because of changes to interest rates and their adverse
impact on the reinvestment of proceeds from maturing and sales of fixed
income securities. This negative factor was more than offset by the
increase in the average balance of invested assets in the quarter ended
September 30, 2004, which was 16% higher than the third quarter of 2003,
because of positive operating cash flow in the period.There was a net realized loss from investments in the quarter ended
September 30, 2004 of $(0.4) million, compared to a net realized gain of
$0.3 million in the third quarter of 2003. Generally, net realized
gains and losses fluctuate from period to period, depending on the
individual securities sold as recommended by IPCRes investment advisor.In the quarter ended September 30, 2004, we incurred net losses and loss
adjustment expenses of $116.0 million, compared to $15.8 million in the third
quarter of 2003. Net incurred losses in the third quarter of 2004 included
$114.0 million in respect of the four hurricanes which struck Florida and two
of the typhoons which struck Japan, which all occurred in August and
September of this year. Because of the relative sizes of the events and the
fact that excess of loss contracts have only one automatic reinstatement, we
believe that a significant proportion of this amount relates to three events:
Hurricanes Charley and Ivan, and Typhoon Songda. The Company has only
received a small number of actual loss advices from clients impacted by the
six events. Accordingly, the estimate of reserves is based on industry loss
estimates, output from both industry and proprietary models, a review of
contracts potentially affected by the events and ongoing discussions with
clients and intermediaries. The reserves are subject to variability
reflecting the unusual pattern of multiple storms affecting one geographic
area and the resulting impact on claims adjusting by, and communications
from, ceding companies. The ultimate impact of losses from the storms on the
Companys results of operations might therefore differ substantially from
this estimate.Acquisition costs incurred, which consist primarily of commissions and
brokerage fees paid to intermediaries for the production of business, were
$9.6 million for the quarter ended September 30, 2004, compared to $7.8
million in the third quarter of 2003, an increase of 23%. Acquisition costs
increased primarily because of the increase in earned premiums, but not
proportionately, because brokerage on reinstatement premiums is typically
less than brokerage on deposit or adjustment premiums. General and
administrative expenses were $5.6 million in the quarter ended September 30,
2004, compared to $4.7 million in the third quarter of 2003. The major areas
of increase were administrative service fees, which are based on earned
premiums, and compensation expense as a result of expensing stock grants and
options. 11




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RESULTS OF OPERATIONS, NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003  Our net income for the nine months ended September 30, 2004 was $130.0
million, compared to $195.2 million for the nine months ended September 30,
2003, a decrease of 33%. Net income was significantly affected by the
frequency of catastrophic events in the third quarter of 2004, which more
than offset the benefit of increases to written and earned premiums, as
discussed below.In the nine months ended September 30, 2004, we wrote premiums of $343.8
million, compared to $302.3 million in the nine months ended September
30, 2003, an increase of 14%. Written premiums in the nine months were
higher because we wrote new business of $23.8 million, and premium from
existing business was approximately $26.5 million more in the nine
months ended September 30, 2004 in comparison to the corresponding
period of 2003, due to larger lines, program re-structuring and foreign
exchange rate differences. These additions were offset in part by
business which was not renewed because of unsatisfactory terms and
conditions, or because the cedant did not purchase the protection, which
totaled approximately $16.4 million in the first nine months of 2004.
Adjustment premiums were $11.4 million in the nine months ended
September 30, 2004 compared to $16.9 million in the corresponding period
of 2003. Reinstatement premiums were $19.8 million in the nine months
ended September 30, 2004 compared to $6.7 million in the corresponding
period of 2003, as a result of the significant increase in incurred
losses in the third quarter of 2004. We retroceded premiums of $18.0
million in the nine months ended September 30, 2004, compared to the
$14.7 million ceded in the corresponding period of 2003. Ceded premiums
have increased due to the increase in our gross writings, as well as
increases in retrocedents participation in our Surplus treaty, and
increased capacity in our excess of loss retrocessional facility. We
also entered a new, short-term aviation retrocessional contract at the
end of September, 2004. Net premiums earned in the nine months ended
September 30, 2004 were $261.7 million, compared to $224.4 million in
the corresponding period in 2003, an increase of 17%. Net premiums
earned were higher due to the increase in written premiums over the past
twelve months, as well as the increase in reinstatement premiums.Net investment income was $37.6 million in the nine months ended
September 30, 2004, compared to $35.0 million for the corresponding
period of 2003. Investment income included a $2.6 million dividend from
our investment in a fund of hedge funds, received in the second quarter
of 2004. Such dividends will be declared periodically, provided the
performance of the fund is positive. The overall yield of the fixed
income portfolio was less for the nine months ended September 30, 2004
than for the corresponding period in 2003, due to lower interest rates
and their adverse impact on the reinvestment of the proceeds of maturing
and sales of fixed income securities. This negative factor was offset
by the increase in the average balance of invested assets in the nine
months ended September 30, 2004, which was 18% higher than the first
nine months of 2003, because of positive operating cash flow in the
period.There was a net realized gain from investments in the nine months ended
September 30, 2004 of $7.3 million, compared to $6.4 million in the
corresponding period of 2003. Generally, net realized gains and losses
fluctuate from period to period, depending on the individual securities
sold as recommended by IPCRes investment advisor.In the nine months ended September 30, 2004, we incurred net losses and loss
adjustment expenses of $134.4 million, compared to $38.5 million in the
corresponding period of 2003. Net losses incurred in 2004 include $114.0
million for the windstorms in Florida and Japan which occurred in August and
September of this year. Because of the relative sizes of the events and the
fact that excess of loss contracts have only one automatic reinstatement, we
believe that a significant proportion of this amount relates to three events:
Hurricanes Charley and Ivan, and Typhoon Songda. The Company has only
received a small number of actual loss advices from clients impacted by the
six events. Accordingly, the estimate of reserves was based on industry loss
estimates, output from both industry and proprietary models, a review of
contracts potentially affected by the events and ongoing discussions with
clients and intermediaries. The reserves are subject to variability
reflecting the unusual pattern of multiple storms affecting one geographic
area and the resulting impact on claims adjusting by, and communications
from, ceding companies. The ultimate impact of losses from the storms on the
Companys results of operations might therefore differ substantially from
this estimate.Acquisition costs incurred were $27.7 million for the nine months ended
September 30, 2004, compared to $22.6 million in the corresponding period of
2003, an increase of 23%. Acquisition costs have increased primarily because
of the increase in earned premiums, as well as some commission adjustments in
respect of additional premiums earned primarily on 2003 contracts. General
and administrative expenses were $16.3 million in the nine months ended
September 30, 2004, compared to $13.6 million in the corresponding period of
2003. This increase is due primarily to increases in administrative fees
which are based on earned premiums, as well as some increases for certain
operating expenses, including salaries and benefits, which include the impact
of expensing stock grants and stock options granted to certain officers,
accelerated pension/stock compensation expense due to the early retirement of
one of our officers, and professional fees resulting from corporate
governance requirements under the Sarbanes-Oxley Act of 2002. These
increases were offset in part by the non-recurring set-up costs of our
revolving credit facility, which were incurred in 2003. 12




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES  IPC Holdings is a holding company that conducts no reinsurance operations of
its own. Its cash flows are limited to distributions from IPCRe and IPCUSL
by way of loans or dividends. The dividends that IPCRe may pay are limited
under Bermuda legislation and IPCRes revolving credit facility. The
Insurance Act and subsequent amendments thereto, require IPCRe to maintain a
minimum solvency margin and a minimum liquidity ratio. The maximum dividend
payable by IPCRe in accordance with Bermuda regulations as of September 30,
2004 was approximately $407.2 million. The maximum amount IPCRe could have
paid in the third quarter under the terms of the revolving credit facility
was $609.9 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 flows from operating activities in the nine months ended September
30, 2004 were $243.2 million compared to $211.7 million in the corresponding
period of 2003. The increase is primarily the result of the increase in
premium volume, combined with a reduction in net claims paid during the
period, which were $35.7 million in the nine months ended September 30, 2004,
compared to $45.0 million in the corresponding period of 2003. This trend is
expected to change in the fourth quarter of 2004 and early 2005, when we
anticipate paying claims associated with the windstorms that took place in
the third quarter of 2004.Net cash outflows from investing activities in the nine months ended
September 30, 2004 were $287.5 million. Cash and cash equivalents decreased
by $74.6 million in the nine months ended September 30, 2004, resulting in a
balance of $17.4 million at September 30, 2004. At September 30, 2004, 55%
of IPCs fixed maturity investment portfolio (based on fair value) was held
in securities rated AAA, and 27% was held in securities rated AA. At
December 31, 2003 the proportions of securities so rated were 53% and 28%,
respectively. The average modified duration of IPCs fixed maturity
portfolio was 2.3 years, compared to 2.8 years at December 31, 2003. We
renewed our revolving credit facility on July 1, 2003 in the amount of $200
million, provided by a syndicate of lenders led jointly by Bank One N.A. and
Citibank N.A. To date we have not drawn upon this facility. We believe that
this facility, together with the relatively short duration and high quality
of IPCs investment portfolio, will provide sufficient liquidity to meet
IPCs cash demands.IPCRe is not a licensed insurer in the United States and therefore, under the
terms of most of its contracts with U.S.-based companies, must provide
security to reinsureds to cover unpaid liabilities in a form acceptable to
state insurance commissioners. Typically, this type of security takes the
form of a letter of credit issued by an acceptable bank, the establishment of
a trust, or a cash advance. Currently IPCRe obtains letters of credit
through one commercial bank pursuant to a $100.0 million facility. In turn,
IPCRe provides the bank security by giving the bank a lien over certain of
IPCRes investments in an amount not to exceed the aggregate letters of
credit outstanding to a maximum of $118.0 million. At September 30, 2004,
there were outstanding letters of credit of $35.6 million. If we were unable
to obtain the necessary credit, IPCRe could be limited in its ability to
write business for our clients in the United States.Our investment portfolio does not currently include direct investments in
options, warrants, swaps, collars or similar derivative instruments. Our
investment policy guidelines provide that financial futures and options and
foreign exchange contracts may not be used in a speculative manner, but may
be used, subject to certain numerical limits, only as part of a defensive
strategy to protect the market value of the portfolio. Also, our portfolio
does not contain any investments in real estate or mortgage loans.Neither the Company, IPCRe nor IPCUSL have any material commitments for
capital expenditures.Aggregate Contractual ObligationsWe are supplementing the contractual obligations disclosed in
the Companys Annual Report on Form 10-K for the year ended
December 31, 2003, to include additional disclosure on the
Companys reserve for losses and loss adjustment expenses. Other
contractual obligations disclosed in the Form 10-K for the year
ended December 31, 2003 are not presented herein as they have
not materially changed.The reserve for losses and loss adjustment expenses represent
managements estimate of the ultimate cost of settling
reinsurance claims. As more fully discussed in our Critical
Accounting Policies  Loss Reserves above, the estimation
of losses and loss adjustment expense reserves is based on various
complex and subjective judgments. Actual losses and loss adjustment
expenses paid may differ, perhaps substantially, from the reserve
estimates reflected in our financial statements. Similarly, the
timing for payment of our estimated losses is not fixed and is not
determinable on an individual or aggregate basis. The assumptions
used in estimating the likely payments due by periods are based on
the Companys historical claims payment experience, but due to
the inherent uncertainty in the process of estimating the timing of
such payments, there is a risk that the amounts paid in any such
period can be significantly different than the amounts disclosed
below. Part of the uncertainty stems from the variability of payment
pattern by type of catastrophic event that caused the losses. For
example, earthquake and hailstorm losses typically take longer to be
reported and paid compared to losses from windstorms. In addition,
there is no prior history of payment patterns for events such as the
attack on the World Trade Center. 13




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Furthermore, the amounts in this table represent our gross
estimated known liabilities as of September 30, 2004 and do not
include any allowance for claims from future events within the time
periods specified. As such, it is highly likely that the total
amounts paid out in the time periods shown will be greater than that
indicated in the table.  PAYMENTS DUE BY PERIOD  Less than 1
    
    
    
    
    
    More than 5Total
    
    year
    
    1 - 3 Years
    
    3 - 5 Years
    
    yearsLosses and Loss Adjustment Expenses
    
    $
    224
    
    
    $
    124
    
    
    $
    63
    
    
    $
    17
    
    
    $
    20  Off Balance Sheet ArrangementsNeither the Company nor any of its subsidiaries has any other forms of
off-balance sheet arrangements, other than those disclosed above.    Transactions with Non-Independent PartiesThe following is a summary of amounts in respect of significant
non-independent party transactions during the nine month periods ended
September 30, 2004 and 2003, respectively (expressed in thousands of U.S.
dollars): September 30, 2004
    
    September 30, 2003Administrative services fees (included in General & Admin. expenses)
    
    $
    6,837
    
    
    $
    5,878Investment fees netted against investment income:
    
    $
    2,204
    
    
    $
    2,330Underwriting services fee income (included in Other income)
    
    $
    3,118
    
    
    $
    2,400Premiums written
    
    $
    31,662
    
    
    $
    34,231Premiums ceded
    
    $
    1,175
    
    
    $
    1,002
  Underwriting services fee income is a percentage of the premiums written on
behalf of one client, which is related to a shareholder of the Company. Fees
are accrued and taken into income based on the premiums earned each quarter.For a discussion of certain of our contractual relationships with
non-independent parties, please see Certain Relationships and Related
Transactions in our definitive Proxy Statement on Schedule 14A, filed with
the Securities and Exchange Commission on April 29, 2004 and incorporated by
reference into our Form 10-K for the year ended December 31, 2003.All transactions with related parties are conducted at arms length, with
normal terms and conditions applicable. Neither the Company nor any of its
subsidiaries have entered into any other significant transactions with
non-independent parties. 
 Item 3. Quantitative and Qualitative 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.
Therefore, such models are tools and do not substitute for the experience or
judgement of senior management.Our investment managers performed a VaR analysis to estimate the maximum
potential loss of fair value for each segment of market risk for our
investment portfolio, as of September 30, 2004, June 30, 2004, March 31, 2004
and December 31, 2003. The analysis calculated the VaR with respect to the
net fair value of our financial instrument assets, which includes cash and
cash equivalents, certain equity and high grade fixed maturity securities, as
of September 30, 2004 using historical simulation methodology. As of
September 30, 2004 the VaR of IPCRes investment portfolio was approximately
$25.2 million, which represents a 95th percentile value change over a
one-month time horizon. This result was obtained through historical
simulation using approximately 750 days (3 years) of historical interest
rate, foreign exchange rate and equity market data. 14




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The following table presents the VaR of each component of market risk of
IPCRes investment portfolio as of September 30, 2004, June 30, 2004, March
31, 2004 and December 31, 2003, respectively, and the average for the nine
months ended September 30, 2004 calculated using the beginning, quarterly and
ending points (expressed in thousands of U.S. dollars):  Market Risk Average for ninemonths endedSeptember 30,
    
    June 30,
    
    March 31,
    
    December 31,
    
    September 30,2004
    
    2004
    
    2004
    
    2003
    
    2004Currency
    
    $
    1,987
    
    
    $
    2,075
    
    
    $
    2,024
    
    
    $
    3,021
    
    
    $
    2,277Interest Rate
    
    
    21,990
    
    
    
    23,586
    
    
    
    18,238
    
    
    
    17,685
    
    
    
    20,375Equity (incl. hedge fund)
    
    
    25,343
    
    
    
    27,471
    
    
    
    29,386
    
    
    
    29,666
    
    
    
    27,966Sum of Risk
    
    
    49,320
    
    
    
    53,132
    
    
    
    49,648
    
    
    
    50,372
    
    
    
    50,618Diversification Benefit
    
    
    (24,096
    )
    
    
    (26,267
    )
    
    
    (24,618
    )
    
    
    (22,757
    )
    
    
    (24,434
    )Total Net Risk
    
    $
    25,224
    
    
    $
    26,865
    
    
    $
    25,030
    
    
    $
    27,615
    
    
    $
    26,184
  The decrease in the overall VaR primarily results from the impact of the
decrease in interest rates in the quarter, as well as the reduction in equity
value at risk. 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, 2004 an estimated 35% or $41 million (September 30, 2003 - 34%
or $33 million) of reinsurance premiums receivable, and an estimated $61
million (September 30, 2003 - $31 million) of loss reserves, were denominated
in non-U.S. currencies. Accordingly, we do not believe that the impact of
exchange rate movements in respect of receivables or loss reserves on our
overall VaR as of September 30, 2004 to be material. 
 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. No significant changes were made in our internal controls or in
other factors that could significantly affect these controls subsequent to
the date of their evaluation. Note on Forward-Looking Statements  This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements are
statements other than historical information or statements of current
condition, including, but not limited to, expectations regarding market
cycles, renewals and our ability to increase written premium volume and
improve profit margins, market conditions, the impact of current market
conditions and trends on future periods, the impact of our business strategy
on our results, trends in pricing and claims and the insurance and
reinsurance market response to catastrophic events. Some forward-looking
statements may be identified by our use of terms such as believes,
anticipates, intends, or expects and relate to our plans and objectives
for future operations. In light of the risks and uncertainties inherent in
all forward-looking statements, the inclusion of such statements in this
report should not be considered as a representation by us or any other person
that our objectives or plans will be achieved. We do not intend, and are
under no obligation, to update any forward-looking statement contained in
this report. The largest single factor in our results has been and will
continue to be the severity or frequency of catastrophic events, which is
inherently unpredictable. Numerous factors could cause our actual results to
differ materially from those in the forward-looking statements, including,
but not limited to, the following: (i) the occurrence of natural or man-made
catastrophic events with a frequency or severity exceeding our estimates;
(ii) any lowering or loss of one of the financial ratings of IPCRe; (iii) a
decrease in the level of demand for property catastrophe reinsurance, or
increased competition owing to increased capacity of property catastrophe
reinsurers; (iv) the effect of competition on market trends and pricing; (v)
the adequacy of our loss reserves; (vi) loss of our non-admitted status in
United States jurisdictions or the passage of federal or state legislation
subjecting us to supervision or regulation in the United States; (vii)
challenges by insurance regulators in the United States to our claim of
exemption from insurance regulation under current laws; (viii) a contention
by the United States Internal Revenue Service that we are engaged in the
conduct of a trade or business within the U.S.; (ix) loss of services of any
one of our executive officers; (x) changes in interest rates and/or equity
values in the United States of America and elsewhere; or (xi) changes in
exchange rates and greater than expected currency exposure. 15




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##### Table of Contents



PART II. OTHER INFORMATION 
 Item 1. Legal Proceedings  NONE 
 Item 2. Unregistered Sale of Equity Securities and Use of Proceeds  NONE 
 Item 3. Defaults upon Senior Securities  NONE 
 Item 4. Submission of Matters to a Vote of Security Holders  NONE 
 Item 5. Other Information  NONE 16




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Item 6. Exhibits and Reports on Form 8-K  (a) ExhibitsUnless otherwise indicated, exhibits are incorporated by reference to
the corresponding numbered exhibits to the Companys Registration
Statement on Form S-1 (Registration No. 333-00088). ExhibitNumber
    
    Description3.1
    
    Memorandum of Association of the Company3.2 +
    
    Amended and Restated Bye-laws of the Company3.3
    
    Form of Memorandum of Increase of Share Capital11.1 #
    
    Reconciliation of basic and diluted net income per common share (EPS).31.1 #
    
    Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.31.2 #
    
    Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.32.1 **
    
    Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.32.2 **
    
    Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
   #
    
    Filed herewith+
    
    Incorporated by reference to our filing on Form 8-A/A (No. 000-27662) filed on July 9, 2003.**
    
    These certifications are being furnished solely pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and
(b) of Section 1350, Chapter 63 of Title 18, United States Code),
and are not being filed as exhibits to this report.  (b) Reports on Form 8-KOn July 21, 2004, the Company filed a Form 8-K Current Report (date of
earliest event reported: July 20, 2004) pursuant to Item 12 thereof
(a) advising that the company had announced its financial results for
the fiscal quarter ended June 30, 2004 via a press release, and (b)
furnishing such press release.On August 25, 2004, the Company filed a Form 8-K Current Report (date
of earliest event reported: August 24, 2004) pursuant to Item 8.01
thereof, advising that the Company had announced its estimate of the
impact of Hurricane Charley on its results of operations via a press
release, and (b) filing such press release. 17




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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 November 9th, 2004
    
    /s/ James P. BryceJames P. Bryce
President and Chief Executive OfficerDate November 9th, 2004
    
    /s/ John R. WealeJohn R. Weale
Senior Vice President and Chief Financial Officer
 18




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EXHIBIT INDEX Unless otherwise indicated, exhibits are incorporated by reference to the
corresponding numbered exhibits to the Companys Registration Statement on
Form S-1 (Registration No. 333-00088). ExhibitNumber
    
    Description3.1
    
    Memorandum of Association of the Company3.2 +
    
    Amended and Restated Bye-laws of the Company3.3
    
    Form of Memorandum of Increase of Share Capital11.1 #
    
    Reconciliation of basic and diluted net income per common share (EPS).31.1 #
    
    Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.31.2 #
    
    Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.32.1 **
    
    Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.32.2 **
    
    Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
   #
    
    Filed herewith+
    
    Incorporated by reference to our filing on Form 8-A/A (No. 000-27662) filed on July 9, 2003.**
    
    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. 19