UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended September 30, 2008

or



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

For the transition period from  to

Commission file number 0-27662

IPC Holdings, Ltd.

(Exact name of
registrant as specified in its charter)



|                                                                     |  |                                     
|-------------------------------------------------------------------- |  | ------------------------------------
|Bermuda                                                              |  | Not Applicable                      
|State or other jurisdiction of 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)

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, a non-accelerated filer or a smaller reporting company. See the
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 |  |  ̈    Smaller reporting company

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 November 3, 2008 was 46,725,503.









---

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, 2008 |           |   | As ofDecember 31, 2007 |  
|                                                                                                                                       |  | (unaudited)             |           |   |                        |  
|ASSETS:                                                                                                                                |  |                         |           |   |                        |   |           |  
|Fixed maturity investments, at fair value (amortized cost 2008: $1,788,207; 2007: $1,756,532)                                          |  | $                       | 1,753,202 |   |                        | $ | 1,803,275 |  
|Equity investments, at fair value (cost 2008: $342,469 ; 2007: $485,205)                                                               |  |                         | 355,380   |   |                        |   | 630,483   |  
|Cash and cash equivalents                                                                                                              |  |                         | 205,540   |   |                        |   | 39,486    |  
|Reinsurance premiums receivable                                                                                                        |  |                         | 135,128   |   |                        |   | 91,393    |  
|Deferred premiums ceded                                                                                                                |  |                         | 2,328     |   |                        |   | 2,578     |  
|Losses and loss adjustment expenses recoverable                                                                                        |  |                         | 5,347     |   |                        |   | 17,497    |  
|Accrued investment income                                                                                                              |  |                         | 26,369    |   |                        |   | 30,369    |  
|Deferred acquisition costs                                                                                                             |  |                         | 14,942    |   |                        |   | 8,893     |  
|Prepaid expenses and other assets                                                                                                      |  |                         | 4,646     |   |                        |   | 3,717     |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|TOTAL ASSETS                                                                                                                           |  | $                       | 2,502,882 |   |                        | $ | 2,627,691 |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|LIABILITIES:                                                                                                                           |  |                         |           |   |                        |   |           |  
|Reserve for losses and loss adjustment expenses                                                                                        |  | $                       | 364,560   |   |                        | $ | 395,245   |  
|Unearned premiums                                                                                                                      |  |                         | 145,482   |   |                        |   | 75,980    |  
|Reinsurance premiums payable                                                                                                           |  |                         | 1,049     |   |                        |   | 4,677     |  
|Deferred fees and commissions                                                                                                          |  |                         | 372       |   |                        |   | 476       |  
|Accounts payable and accrued liabilities                                                                                               |  |                         | 23,277    |   |                        |   | 25,568    |  
|Bank loan                                                                                                                              |  |                         | 150,000   |   |                        |   |          |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|TOTAL LIABILITIES                                                                                                                      |  |                         | 684,740   |   |                        |   | 501,946   |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|SHAREHOLDERS EQUITY:                                                                                                                  |  |                         |           |   |                        |   |           |  
|Common shares outstanding, par value U.S. $0.01: 2008: 46,946,320; 2007: 57,626,395 shares                                             |  |                         | 469       |   |                        |   | 576       |  
|Preferred shares  Series A mandatory convertible preferred shares outstanding, par value U.S. $0.01: 2008: 9,000,000; 2007: 9,000,000 |  |                         | 90        |   |                        |   | 90        |  
|Additional paid-in capital                                                                                                             |  |                         | 1,087,538 |   |                        |   | 1,334,271 |  
|Retained earnings                                                                                                                      |  |                         | 730,926   |   |                        |   | 791,689   |  
|Accumulated other comprehensive loss                                                                                                   |  |                         | (881      | ) |                        |   | (881      | )
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|TOTAL SHAREHOLDERS EQUITY                                                                                                             |  |                         | 1,818,142 |   |                        |   | 2,125,745 |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                             |  | $                       | 2,502,882 |   |                        | $ | 2,627,691 |  
|                                                                                                                                       |  |                         |           |   |                        |   |           |  

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



2



---

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, |  
|                                                      |  | 2008                        |            |   | 2007                            |   |            | 2008        |  |   | 2007        |  
|                                                      |  | (unaudited)                 |            |   | (unaudited)                     |   |            | (unaudited) |  |   | (unaudited) |  
|REVENUES:                                             |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Gross premiums written                                |  | $                           | 59,806     |   |                                 | $ | 43,386     |             |  | $ | 362,851     |   |  | $ | 388,888    |  
|Change in unearned premiums                           |  |                             | 54,978     |   |                                 |   | 58,227     |             |  |   | (69,502     | ) |  |   | (74,171    | )
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Premiums earned                                       |  |                             | 114,784    |   |                                 |   | 101,613    |             |  |   | 293,349     |   |  |   | 314,717    |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Reinsurance premiums ceded                            |  |                             | (256       | ) |                                 |   | (1,656     | )           |  |   | (5,100      | ) |  |   | (16,374    | )
|Change in deferred premiums ceded                     |  |                             | (1,121     | ) |                                 |   | (2,570     | )           |  |   | (250        | ) |  |   | 2,580      |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Premiums ceded                                        |  |                             | (1,377     | ) |                                 |   | (4,226     | )           |  |   | (5,350      | ) |  |   | (13,794    | )
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Net premiums earned                                   |  |                             | 113,407    |   |                                 |   | 97,387     |             |  |   | 287,999     |   |  |   | 300,923    |  
|Net investment income                                 |  |                             | 23,356     |   |                                 |   | 32,451     |             |  |   | 70,625      |   |  |   | 97,465     |  
|Net (losses) gains on investments                     |  |                             | (108,541   | ) |                                 |   | 30,719     |             |  |   | (165,450    | ) |  |   | 41,264     |  
|Other income                                          |  |                             | 3          |   |                                 |   | 160        |             |  |   | 47          |   |  |   | 1,047      |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                      |  |                             | 28,225     |   |                                 |   | 160,717    |             |  |   | 193,221     |   |  |   | 440,699    |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|EXPENSES:                                             |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Net losses and loss adjustment expenses               |  |                             | 98,521     |   |                                 |   | 30,426     |             |  |   | 97,463      |   |  |   | 170,589    |  
|Net acquisition costs                                 |  |                             | 10,109     |   |                                 |   | 9,817      |             |  |   | 27,227      |   |  |   | 30,402     |  
|General and administrative expenses                   |  |                             | 5,968      |   |                                 |   | 5,840      |             |  |   | 19,668      |   |  |   | 19,798     |  
|Interest expense                                      |  |                             | 1,275      |   |                                 |   |           |             |  |   | 1,537       |   |  |   |           |  
|Net exchange (gain) loss                              |  |                             | (135       | ) |                                 |   | 1,422      |             |  |   | 586         |   |  |   | 1,519      |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|                                                      |  |                             | 115,738    |   |                                 |   | 47,505     |             |  |   | 146,481     |   |  |   | 222,308    |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|NET (LOSS) INCOME                                     |  |                             | (87,513    | ) |                                 |   | 113,212    |             |  |   | 46,740      |   |  |   | 218,391    |  
|Dividends on preferred shares                         |  |                             | 4,282      |   |                                 |   | 4,329      |             |  |   | 12,846      |   |  |   | 12,893     |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Net (loss) income available to common shareholders    |  | $                           | (91,795    | ) |                                 | $ | 108,883    |             |  | $ | 33,894      |   |  | $ | 205,498    |  
|                                                      |  |                             |            |   |                                 |   |            |             |  |   |             |   |  |   |            |  
|Basic net (loss) income per common share              |  | $                           | (1.93      | ) |                                 | $ | 1.80       |             |  | $ | 0.65        |   |  | $ | 3.29       |  
|Diluted net (loss) income per common share(1)         |  | $                           | (1.93      | ) |                                 | $ | 1.63       |             |  | $ | 0.65        |   |  | $ | 3.06       |  
|Weighted average number of common shares - basic      |  |                             | 47,623,192 |   |                                 |   | 60,564,354 |             |  |   | 52,403,480  |   |  |   | 62,485,316 |  
|Weighted average number of common shares - diluted(1) |  |                             | 55,325,568 |   |                                 |   | 69,552,695 |             |  |   | 60,108,191  |   |  |   | 71,477,568 |  



|(1) | Anti-dilution provisions apply to 2008. There is no effect of
options, stock-based compensation and convertible preferred shares because they are anti-dilutive.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

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



3



---

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,
|                                   |  | 2008                        |         |                                 | 2007        |   | 2008        |  | 2007       
|                                   |  | (unaudited)                 |         |                                 | (unaudited) |   | (unaudited) |  | (unaudited)
|NET (LOSS) INCOME                  |  | $                           | (87,513 | )                               |             | $ | 113,212     |  | $           | 46,740 |  | $ | 218,391
|                                   |  |                             |         |                                 |             |   |             |  |             |        |  |   |        
|Other comprehensive (loss) income: |  |                             |        |                                 |             |   |            |  |             |       |  |   |       
|                                   |  |                             |         |                                 |             |   |             |  |             |        |  |   |        
|COMPREHENSIVE (LOSS) INCOME        |  | $                           | (87,513 | )                               |             | $ | 113,212     |  | $           | 46,740 |  | $ | 218,391
|                                   |  |                             |         |                                 |             |   |             |  |             |        |  |   |        

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



4



---

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

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



|                                                        |  |                    |           |   |                   |   |           |  
|------------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | - | --------- | -
|                                                        |  | As of              |           |   | As of             |  
|                                                        |  | September 30, 2008 |           |   | December 31, 2007 |  
|                                                        |  | (unaudited)        |           |   |                   |  
|COMMON SHARES PAR VALUE $0.01:                          |  |                    |           |   |                   |   |           |  
|Balance, beginning of year                              |  | $                  | 576       |   |                   | $ | 637       |  
|Additional shares issued                                |  |                    | 1         |   |                   |   | 1         |  
|Shares repurchased                                      |  |                    | (108      | ) |                   |   | (62       | )
|                                                        |  |                    |           |   |                   |   |           |  
|Balance, end of period                                  |  | $                  | 469       |   |                   | $ | 576       |  
|                                                        |  |                    |           |   |                   |   |           |  
|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                              |  | $                  | 1,334,271 |   |                   | $ | 1,474,092 |  
|Shares issued                                           |  |                    |          |   |                   |   |          |  
|Reduction in paid-in capital on common share repurchase |  |                    | (250,949  | ) |                   |   | (144,513  | )
|Restricted shares and share units awarded               |  |                    | 5,652     |   |                   |   | 5,489     |  
|Net change in deferred compensation                     |  |                    | (1,436    | ) |                   |   | (797      | )
|                                                        |  |                    |           |   |                   |   |           |  
|Balance, end of period                                  |  | $                  | 1,087,538 |   |                   | $ | 1,334,271 |  
|                                                        |  |                    |           |   |                   |   |           |  
|RETAINED EARNINGS:                                      |  |                    |           |   |                   |   |           |  
|Balance, beginning of year                              |  | $                  | 791,689   |   |                   | $ | 388,826   |  
|Cumulative-effect adjustment of adopting SFAS 159       |  |                    |          |   |                   |   | 127,996   |  
|Net income                                              |  |                    | 46,740    |   |                   |   | 385,412   |  
|Reduction on common share repurchase                    |  |                    | (60,301   | ) |                   |   | (44,154   | )
|Dividends paid and accrued                              |  |                    | (47,202   | ) |                   |   | (66,391   | )
|                                                        |  |                    |           |   |                   |   |           |  
|Balance, end of period                                  |  | $                  | 730,926   |   |                   | $ | 791,689   |  
|                                                        |  |                    |           |   |                   |   |           |  
|ACCUMULATED OTHER COMPREHENSIVE LOSS:                   |  |                    |           |   |                   |   |           |  
|Balance, beginning of year                              |  | $                  | (881      | ) |                   | $ | 127,310   |  
|Cumulative-effect adjustment of adopting SFAS 159       |  |                    |          |   |                   |   | (127,996  | )
|Other comprehensive loss                                |  |                    |          |   |                   |   | (195      | )
|                                                        |  |                    |           |   |                   |   |           |  
|Balance, end of period                                  |  | $                  | (881      | ) |                   | $ | (881      | )
|                                                        |  |                    |           |   |                   |   |           |  
|TOTAL SHAREHOLDERS EQUITY                              |  | $                  | 1,818,142 |   |                   | $ | 2,125,745 |  
|                                                        |  |                    |           |   |                   |   |           |  

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



5



---

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States
dollars)



|                                                                                                           |  |                                 |            |   |             |   |          |  
|---------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ----------- | - | -------- | -
|                                                                                                           |  | Nine months ended September 30, |           
|                                                                                                           |  | 2008                            |            |   | 2007        |  
|                                                                                                           |  | (unaudited)                     |            |   | (unaudited) |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                      |  |                                 |            |   |             |   |          |  
|Net income                                                                                                 |  | $                               | 46,740     |   |             | $ | 218,391  |  
|Adjustments to reconcile net income to cash provided by operating activities:                              |  |                                 |            |   |             |   |          |  
|Amortization of fixed maturity premiums (discounts), net                                                   |  |                                 | 344        |   |             |   | (3,042   | )
|Net losses (gains) on investments                                                                          |  |                                 | 165,450    |   |             |   | (41,264  | )
|Stock compensation                                                                                         |  |                                 | 4,159      |   |             |   | 4,067    |  
|Changes in:                                                                                                |  |                                 |            |   |             |   |          |  
|Reinsurance premiums receivable                                                                            |  |                                 | (43,735    | ) |             |   | (35,969  | )
|Deferred premiums ceded                                                                                    |  |                                 | 250        |   |             |   | (2,580   | )
|Loss and loss adjustment expenses recoverable                                                              |  |                                 | 12,150     |   |             |   | (25,445  | )
|Accrued investment income                                                                                  |  |                                 | 4,000      |   |             |   | 1,569    |  
|Deferred acquisition costs                                                                                 |  |                                 | (6,049     | ) |             |   | (7,564   | )
|Prepaid expenses and other assets                                                                          |  |                                 | (929       | ) |             |   | (1,529   | )
|Reserve for losses and loss adjustment expenses                                                            |  |                                 | (30,685    | ) |             |   | (22,208  | )
|Unearned premiums                                                                                          |  |                                 | 69,502     |   |             |   | 74,171   |  
|Reinsurance premiums payable                                                                               |  |                                 | (3,628     | ) |             |   | 2,055    |  
|Deferred fees and commissions                                                                              |  |                                 | (104       | ) |             |   | (284     | )
|Accounts payable and accrued liabilities                                                                   |  |                                 | (2,291     | ) |             |   | (278     | )
|                                                                                                           |  |                                 |            |   |             |   |          |  
|Cash provided by operating activities                                                                      |  |                                 | 215,174    |   |             |   | 160,090  |  
|                                                                                                           |  |                                 |            |   |             |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                      |  |                                 |            |   |             |   |          |  
|Purchases of fixed maturity investments                                                                    |  |                                 | (1,377,370 | ) |             |   | (871,344 | )
|Proceeds from sale of fixed maturity investments                                                           |  |                                 | 1,209,304  |   |             |   | 757,827  |  
|Proceeds from maturities of fixed maturity investments                                                     |  |                                 | 146,000    |   |             |   | 90,425   |  
|Purchases of equity investments                                                                            |  |                                 | (2,299     | ) |             |   | (24,762  | )
|Proceeds from sale of equity investments                                                                   |  |                                 | 183,748    |   |             |   |         |  
|                                                                                                           |  |                                 |            |   |             |   |          |  
|Cash provided by (used in) investing activities                                                            |  |                                 | 159,383    |   |             |   | (47,854  | )
|                                                                                                           |  |                                 |            |   |             |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                      |  |                                 |            |   |             |   |          |  
|Proceeds from bank loan                                                                                    |  |                                 | 150,000    |   |             |   |         |  
|Repurchases of common shares                                                                               |  |                                 | (311,301   | ) |             |   | (100,000 | )
|Cash dividends paid to shareholders                                                                        |  |                                 | (47,202    | ) |             |   | (50,399  | )
|                                                                                                           |  |                                 |            |   |             |   |          |  
|Cash used in financing activities                                                                          |  |                                 | (208,503   | ) |             |   | (150,399 | )
|                                                                                                           |  |                                 |            |   |             |   |          |  
|Net increase (decrease) in cash and cash equivalents                                                       |  |                                 | 166,054    |   |             |   | (38,163  | )
|Cash and cash equivalents, beginning of period                                                             |  |                                 | 39,486     |   |             |   | 88,415   |  
|                                                                                                           |  |                                 |            |   |             |   |          |  
|Cash and cash equivalents, end of period                                                                   |  | $                               | 205,540    |   |             | $ | 50,252   |  
|                                                                                                           |  |                                 |            |   |             |   |          |  
|                                                                                                          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                           | 
|                                                                                                          
|Interest paid totaled $1,269 and $nil for the nine months ended September 30, 2008 and 2007, respectively. | 

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



6



---

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, 2008 and 2007, respectively,
the consolidated balance sheet as of September 30, 2008 and the consolidated statements of cash flows for the nine months ended September 30, 2008 and 2007, respectively. These interim consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the year ended December 31, 2007, included in the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on
February 22, 2008 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, 2008 the Company
paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of record on January 31, 2008.

On March 14, 2008 the Company paid a common stock dividend of $0.22 per share to shareholders of record on February 29, 2008.

On May 15, 2008 the Company paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of record on May 1, 2008.

On June 20, 2008 the Company paid a common stock dividend of $0.22 per share, to shareholders of record on June 4, 2008.

On August 15, 2008 the Company paid a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share to preferred shareholders of
record on August 1, 2008.

On September 19, 2008 the Company paid a common stock dividend of $0.22 per share, to shareholders of
record on September 3, 2008.

On October 22, 2008 the Company declared the final preferred dividend of $0.475781 per Series A
Mandatory Convertible preferred share, payable on November 15, 2008 to preferred shareholders of record on November 1, 2008.

On
October 22, 2008 the Company declared a common stock dividend of $0.22 per share, to be paid on November 28, 2008 to shareholders of record on November 13, 2008.



|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, 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



7



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on June 22, 2007. The 2007 Incentive Plan is designed to replace the terminated Option Plan and the terminated 2003 Stock Incentive Plan. Awards were
made under the 2007 Incentive Plan in August 2007 and February 2008 consisting of restricted share units, restricted common shares and performance share units. The restricted share units, restricted common shares and performance share units are
accounted for as equity instruments under Financial Accounting Standards Board (FASB) Statement No. 123 (Revised 2004) Share-Based Payment (SFAS 123R). The applicable performance metrics for performance share
units are based on a combination of annual return on equity on an operating basis and relative total shareholder return as compared to the BSX Bermuda Insurance Index.

A summary of the status of outstanding awards under the Companys Option Plan as of September 30, 2008 and 2007 and changes during the nine-month periods then ended is presented in the tables and narrative
below.



|                                                           |  |                                 |  |                                |       |                 |         |                                |   |      
|---------------------------------------------------------- |  | ------------------------------- |  | ------------------------------ | ----- | --------------- | ------- | ------------------------------ | - | -----
|                                                           |  | Nine months ended September 30,
|                                                           |  | 2008                            |  | 2007                          
|                                                           |  | Numberof shares                 |  | Weighted averageexercise price |       | Numberof shares |         | Weighted averageexercise price
|Outstanding, beginning of period                           |  | 567,250                         |  | $                              | 34.22 |                 | 611,625 |                                | $ | 34.30
|Granted                                                    |  |                                |  | $                              |      |                 |        |                                | $ |     
|Exercised                                                  |  | 12,500                          |  | $                              | 28.00 |                 |        |                                | $ |     
|Forfeited                                                  |  | 28,750                          |  | $                              | 35.23 |                 |        |                                | $ |     
|Outstanding, end of period                                 |  | 526,000                         |  | $                              | 34.31 |                 | 611,625 |                                | $ | 34.30
|Exercisable, end of period                                 |  | 431,000                         |  | $                              | 34.57 |                 | 379,750 |                                | $ | 34.16
|Weighted average fair value of options granted (per share) |  |                                 |  | $                              |      |                 |         |                                | $ |     

The total intrinsic value of stock options exercised for the nine-month period ended
September 30, 2008 was $37.5 (2007: $nil). The weighted average remaining contractual period as of September 30, 2008 was 5.5 years and 5.2 years for outstanding and exercisable options respectively. The aggregate intrinsic value as of
September 30, 2008 was $623 and $485 for outstanding and exercisable options respectively.

There were no options granted during the
nine months ended September 30, 2008, and as noted above, the Option Plan was terminated on February 20, 2007.

The following
table summarizes certain stock option information at September 30, 2008:



|                        |  |                                 |  |                                          |  |                                 |  |                                 |  |                                
|----------------------- |  | ------------------------------- |  | ---------------------------------------- |  | ------------------------------- |  | ------------------------------- |  | -------------------------------
|Range of exercise price |  | Outstanding atSeptember 30,2008 |  | Weightedaveragecontractualperiod inyears |  | Weightedaverageexerciseprice /$ |  | Exercisable atSeptember 30,2008 |  | Weightedaverageexerciseprice /$
|$13-19                  |  | 6,000                           |  | 1.25                                     |  | 15.38                           |  | 6,000                           |  | 15.38                          
|$19-25                  |  | 10,000                          |  | 1.45                                     |  | 21.73                           |  | 10,000                          |  | 21.73                          
|$25-31                  |  | 198,750                         |  | 5.92                                     |  | 27.95                           |  | 136,250                         |  | 27.93                          
|$31-37                  |  | 62,500                          |  | 4.25                                     |  | 31.54                           |  | 62,500                          |  | 31.54                          
|$37-43                  |  | 118,750                         |  | 5.25                                     |  | 38.90                           |  | 118,750                         |  | 38.90                          
|$43-49                  |  | 130,000                         |  | 6.25                                     |  | 43.03                           |  | 97,500                          |  | 43.03                          
|                        |  |                                 |  |                                          |  |                                 |  |                                 |  |                                
|Total                   |  | 526,000                         |  |                                          |  |                                 |  | 431,000                         |  |                                
|                        |  |                                 |  |                                          |  |                                 |  |                                 |  |                                

As of September 30, 2008, there was $8,298 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 1.5 years.



8



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|4. | BANK LOAN:
|-- | ----------

On June 12, 2008 the Company
borrowed $150,000 under its revolving loan facility in order to partially fund its share repurchase program. The loan is unsecured and the interest rate resets at intervals of either 1, 3, or 6 months at the Companys pre-selection and is based
on LIBOR plus a spread based on the Companys current debt rating. The repayment date of the loan was September 12, 2008 and the Company filed a notice of continuation thereby resetting the repayment date to December 12, 2008. As of
September 30, 2008, $150,000 remains outstanding on this loan at a rate of 3.375% (on an annual basis). Interest expense in connection with this loan was $1,537 for the nine-month period ended September 30, 2008.



|5. | NEW ACCOUNTING PRONOUNCEMENTS:
|-- | ------------------------------

In March 2008, the
FASB issued Statement of Financial Accounting Standards (SFAS) No. 161 Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement 133. This Statement changes required disclosures for
derivatives and hedging activities, including enhanced disclosures regarding (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related
interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. Specifically, SFAS 161 requires: disclosure of the objectives for using derivative
instruments be disclosed in terms of underlying risk and accounting designation; disclosure of the fair values of derivative instruments and their gains and losses in a tabular format; disclosure of information about credit-risk-related contingent
features; and cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed. The statement is effective for financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The adoption of SFAS 161 is not expected to have any material impact on the Companys consolidated financial statements.

In May 2008, the FASB issued SFAS 162 The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 identifies the sources of generally accepted accounting principles and provides a framework, or
hierarchy, for selecting the principles to be used in preparing U.S. GAAP financial statements for nongovernmental entities. This Statement makes the GAAP hierarchy explicitly and directly applicable to preparers of financial statements, a step that
recognizes preparers' responsibilities for selecting the accounting principles for their financial statements. The hierarchy of authoritative accounting guidance is not expected to change current practice but is expected to facilitate the FASB's
plan to designate as authoritative its forthcoming codification of accounting standards. This Statement is effective 60 days following the SEC's approval of the PCAOB's related amendments to AU Section 411, The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles, to remove the GAAP hierarchy from its auditing standards.

In May 2008,
the FASB also issued SFAS 163 Accounting for Financial Guarantee Insurance Contracts  an Interpretation of FASB Statement No. 60. SFAS 163 prescribes the accounting for premium revenue and claims liabilities by insurers of
financial obligations, and requires expanded disclosures about financial guarantee insurance contracts. SFAS 163 applies to financial guarantee insurance and reinsurance contracts issued by insurers subject to SFAS 60, Accounting and Reporting
by Insurance Enterprises. The Statement does not apply to insurance contracts that are similar to financial guarantee insurance contracts such as mortgage guaranty or trade-receivable insurance, financial guarantee contracts issued by
noninsurance entities, or financial guarantee contracts that are derivative instruments within the scope of SFAS 133. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods
within those years, except for certain disclosure requirements about the risk-management activities of the insurance enterprise that are effective for the first quarter beginning after the Statement was issued. Except for those disclosures, early
application is prohibited. SFAS 163 is not expected to have an effect on the Company as it does not enter into financial guarantee contracts.



9



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

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, 2008.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 to our audited financial statements for the fiscal year ended December 31, 2007, included in the Companys Annual Report on Form 10-K filed with
the Securities and Exchange Commission (SEC) on February 22, 2008. The following is a summary of the accounting policies for the three main components of our consolidated balance sheet and consolidated statements of (loss) 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
on a pro rata basis 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 may be
adjusted upwards or downwards as a result of changes in the cedants 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, 2008 the amount of premium accrued resulting from managements estimates for proportional treaties was 3.5% 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, 2008 for estimated reinstatement premiums on Reported But Not Enough loss reserves (RBNE) and Incurred But Not Reported
(IBNR) loss reserves, as described below, was $30.0 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 reserves). 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.

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 the estimate is adjusted as actual experience becomes known.

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.



10



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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, 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, which further increases the variability of our reserves.

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.Since 2007, we also undertake a verification process of the
completeness of our loss reserves, including the circularization of a number of our brokers. 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 great 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. For example, the initial 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, introduced 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 gross 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          | % |  | 145             | % |  | 118,000                                           |  
|Hurricane Katrina       |  | 1.5                                                    | % |  | 1.6         | % |  | -0.4         | % |  | -2.0         | % |  | -2.0            | % |  | (16,000                                           | )
|UK floods (June 2007)   |  | -38                                                    | % |  | -43         | % |  |              |   |  |              |   |  | -45             | % |  | (28,000                                           | )

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 69% 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.

The initial estimation process for the flooding which impacted parts of northern England in June 2007 was also made difficult by the proximity to the end
of the second quarter 2007 reporting period. The flood waters had not fully receded at the time that the initial estimate was prepared.

Particularly 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, 2007.

At September 30, 2008 managements estimates for IBNR/RBNE represented 59% of total loss reserves. The majority of the estimate relates to reserves for claims from hurricane Ike that affected various parts
of Gulf coast states in September 2008, reserves for claims from hurricane 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. Given the magnitude and recent occurrence of hurricane Ike, delays in receiving claims data, the contingent nature of business interruption and other exposures,
and other uncertainties inherent in loss estimation, meaningful imprecision remains regarding the estimated losses from this event. Our initial assessment of losses is based on a combination of our analysis and review of our share of estimated total
industry loss, in-force contracts, the output of catastrophe modeling and a limited number of loss advices from clients. 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, 2008 was inaccurate by a factor of 10%, our results of operations would be impacted by a positive or negative movement of $21.5 million. If our total reserve
for losses at



12



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September 30, 2008 was inaccurate by a factor of 10%, our incurred losses would be impacted by $36.5 million, which represents 2% of shareholders
equity at September 30, 2008. 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.

Investments

In
accordance with our investment guidelines, our investments consist of high-grade marketable fixed maturity investments, certain equity investments in mutual funds, and mortgage backed securities guaranteed by U.S. Government sponsored entities and,
as part of the mortgage backed securities portfolio, to-be-announced securities (TBAs). Mortgage backed securities are typically traded on a to-be-announced basis. By acquiring a TBA, the Company makes a commitment to purchase a future
issuance of mortgage backed securities. In addition, the portfolio may offset these purchases by taking positions in short TBAs (i.e. the Company makes a commitment to sell a future issuance of mortgage backed securities) but no net short TBA
positions are allowed. As part of the mortgage backed securities portfolio, the investment guidelines allow the Company to enter into long and short TBA positions, which are deliverable within a month. No net short TBAs are allowed. By acquiring a
TBA, the Company makes a commitment to purchase a future issuance of mortgage-backed securities. For the period between purchase of the TBA and issuance of the underlying security, the Companys position is accounted for as a regular-way
security trade in the consolidated financial statements where delivery is taken. Where delivery is not taken, the Companys position is accounted for as a derivative in the consolidated financial statements. As at September 30, 2008, the
Company had both long and short TBAs. Collateral is received or posted daily between the Company and the counterparty for the daily net gain (loss). TBAs are recorded in the consolidated financial statements at fair value.

In accordance with our adoption of Statement of Financial Accounting Standards (SFAS) No. 159 The Fair Value Option for Financial
Assets and Financial Liabilities on January 1, 2007 the investments are now reported as Trading under SFAS 115. Simultaneous to the adoption of SFAS No 159 we also adopted SFAS No. 157, Fair Value Measurements
regarding fair value measurements, which required all unrealized gains and losses in our investment portfolio to be reclassified from accumulated other comprehensive income within shareholders equity on our consolidated balance sheets to
retained earnings as of January 1, 2007. This cumulative-effect adjustment reclassifying unrealized gains and losses 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.

With the investments now being classified as Trading all subsequent changes to
the fair value of our investment portfolio are recorded as net (losses) gains on investments in our consolidated statements of income (loss).

SFAS 157 established a hierarchy for inputs in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs are used when available. Observable inputs
are inputs that market participants would use in pricing the asset based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Companys assumptions about the assumptions that market
participants would use in pricing the asset based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since
valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly.

Level 3Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The following table shows how our investments are categorized.



|                           |  |                                                             |  |                                                         |  |                                                             |  |                                                        
|-------------------------- |  | ----------------------------------------------------------- |  | ------------------------------------------------------- |  | ----------------------------------------------------------- |  | -------------------------------------------------------
|                           |  | Fair Value Measurement at September 30, 2008 using:        
|Description                |  | Fair ValueMeasurements atSeptember 30, 2008($ in thousands) |  | Quoted Pricesin Active Markets(Level
1)($ in thousands) |  | Significant OtherObservableInputs (Level 2)($ in thousands) |  | SignificantUnobservable Inputs(Level 3)($ in
thousands)
|Fixed maturity investments |  | 1,753,202                                                   |  |                                                        |  | 1,753,202                                                   |  |                                                       
|AIG Select Hedge Fund      |  | 173,936                                                     |  |                                                        |  |                                                            |  | 173,936                                                
|Other Equity investments   |  | 181,444                                                     |  |                                                        |  | 181,444                                                     |  |                                                       



13



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Fixed maturity investments are stated at fair value as determined by the broker-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. Although we believe that many of these securities could be classified as quoted on
active markets they are not quoted on a public exchange and therefore we are classifying them as Level 2.

The AIG Select Hedge Fund
(Select Hedge) has a monthly reported net asset value  where the funds holdings can be in various publicly quoted and unquoted investments with observable inputs. Because Select Hedge invests in 30-40 underlying third party
funds, there is a one-month delay in its valuation. As a result, the most recently advised net asset value (NAV) of Select Hedge included in our financial statements at the end of each quarter has historically been based upon the
NAVs of the underlying funds at the end of the preceding month. The Select Hedge had been classified as Level 2 as at June 30, 2008 because we were using the final NAV which was an observable input. However, due to the significant market
volatility towards the end of the quarter ended September 30, 2008 we have included an estimate of the performance of Select Hedge for the month of September, 2008. The estimate is obtained from the funds investment manager who derives an
estimate of the performance of the Select Hedge based on the month end positions from the underlying third party funds. The use of the estimate in respect of the Select Hedge increases the level of unobservable inputs. Hence, we are classifying the
Select Hedge as Level 3. In order to obtain comfort over the reasonableness of this estimate, we assessed the difference between the estimates and final month-end NAVs to ensure that there have been no significant variances in the past. Any
movement in the estimated NAV relative to the final NAV of Select Hedge would be recorded in the following reporting period. There is up to a two-month delay prior to receiving funds withdrawn from our Select Hedge investment.

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs
may result in a reclassification for certain financial assets and liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of the Level 3 category as of the beginning of the quarter in which
the reclassifications occur.

The following table presents the fair market value of the Companys Level 3 financial assets (and
liabilities) as at September 30, 2008.



|                                                                                                                                                                                     |  |                                                                       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------- | -
|                                                                                                                                                                                     |  | Fair value measurements usingsignificant unobservableinputs (Level 3) |  
|                                                                                                                                                                                     |  | Quarter endedSeptember 30, 2008($ in thousands)                       |  
|Beginning balance as at July 1, 2008                                                                                                                                                 |  |                                                                      |  
|Transfers in and/or out of Level 3                                                                                                                                                   |  | 192,254                                                               |  
|Total gains and losses (realized/unrealized) included in earnings                                                                                                                    |  | (18,318                                                               | )
|Purchases, issuance, and settlements                                                                                                                                                 |  |                                                                      |  
|                                                                                                                                                                                     |  |                                                                       |  
|Ending balance at September 30, 2008                                                                                                                                                 |  | 173,936                                                               |  
|                                                                                                                                                                                     |  |                                                                       |  
|The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to
assets still held at September 30, 2008 |  | (18,318                                                               | )
|                                                                                                                                                                                     |  |                                                                       |  

Other equity investments represent an investment in two mutual funds. These funds are stated at
fair value as determined by the most recently reported net asset value as advised by the fund. These funds have daily reported net asset values  with the funds holdings predominantly in publicly quoted securities. Due to the funds
values being current net asset values, with no significant lock ups, no delays in withdrawal and not publicly quoted prices, we are classifying other equity investments as Level 2.

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, 2008 all of our fixed maturity securities were investment grade and were rated, with the exception of two fixed maturity securities
issued by Lehman Brothers that were not investment grade.

In respect of our fixed maturity investments, we periodically assess valuation
relative to current financial market conditions. We also consider any valuation disparities between the custodian and investment manager and supplement this with our own independent verification to external pricing sources. Any material
discrepancies are investigated and resolved. As of September 30, 2008 100% of our fixed maturity investments were valued using external pricing services. There have been no adjustments to the prices obtained from the pricing services. Our
valuation procedures also consider the credit quality



14



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composition of the portfolio and any significant migrations in the credit quality of our holdings from period to period. The results of our valuation
procedures lend support to the fair value classification of Level 2 identified above. From a liquidity perspective we consider the trading volume, last known trade dates and activity in our portfolio to ensure the portfolio is being actively traded
and remains liquid.

RESULTS OF OPERATIONS, QUARTERS ENDED SEPTEMBER 30, 2008 AND 2007

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, 2008.

Our net loss for the quarter ended September 30, 2008 was $(87.5) million, compared to net income
of $113.2 million for the quarter ended September 30, 2007. The primary reason for the decrease is changes in fair value in our investment portfolio. In addition, there was an increase in incurred losses, primarily from hurricane Ike, and a
decrease in investment income in the third quarter of 2008 compared to the third quarter of 2007. These decreases were slightly offset by an increase in earned premiums. Details of these movements are discussed below.

In the quarter ended September 30, 2008, we wrote gross premiums of $59.8 million, compared to $43.4 million in the third quarter of 2007. We wrote
premiums in respect of new business totaling $4.5 million, but business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled $4.7 million. In addition, premiums from
existing business were $1.5 million less in the third quarter of 2008 in comparison to the third quarter of 2007, mostly due to program re-structuring, including changes to inception dates, increased client retentions, changes to layering within
reinsurance programs and rates on line. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants actual exposure base and the original estimates thereof, were $0.5 million less in the third
quarter of 2008 in comparison to the third quarter of 2007. There was also an increase of $18.7 million in reinstatement premiums in the third quarter of 2008 compared to the third quarter of 2007, primarily due to the impact of estimated claims
from hurricane Ike.

In the quarter ended September 30, 2008, we ceded $0.3 million of premiums to our retrocessional facilities,
compared with $1.7 million in the third quarter of 2007. 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, our Property Catastrophe Excess of Loss retrocessional facility was not renewed at January 1, 2008, and there was less participation by retrocessionaires in our proportional reinsurance facility.
Net premiums earned in the quarter ended September 30, 2008 were $113.4 million, compared to $97.4 million in the third quarter of 2007. This increase is primarily due to the impact of reinstatement premiums as a result of increased loss
activity in the period.

Net investment income was $23.4 million in the quarter ended September 30, 2008, compared to $32.5 million in
the third quarter of 2007. We did not receive any dividends from our investment in a fund of hedge funds in the third quarter of 2008, whereas in the third quarter of 2007 we received dividends of $7.8 million from this investment. In addition, the
overall yield from the fixed income portfolio was approximately 40 basis points less during 2008, compared to 2007.

We recognized a net
loss of $(108.5) million from investments in the quarter ended September 30, 2008, compared to a net gain of $30.7 million in the third quarter of 2007. The unrealized depreciation included in the net loss from investments in the third quarter
of 2008 was $109.5 million, whereas the unrealized appreciation included in the net gain from investments in the third quarter of 2007 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 (losses) gains on investments in our
consolidated statements of (loss) income. In the third quarter of 2008, net losses from fixed maturity securities were $(59.2) million, net losses from our equity investments were $(32.8) million, and net losses from our investment in a fund of
hedge funds was $(18.3) million whereas in the third quarter of 2007, net gains from fixed maturity securities were $28.9 million, net gains from our equity investments were $12.8 million, and net losses from our investment in a fund of hedge funds
were $(11.0) million. These amounts represent reductions of 3.2%, 11.8% and 9.5%, respectively, in the fair value of those investments. In the third quarter of 2008, net realized losses from fixed maturity securities issued by Goldman Sachs, Lehman
Brothers, Morgan Stanley and Wachovia were $0.1 million, $0.1 million, $1.8 million and $1.0 million respectively. In the third quarter of 2008, net unrealized losses from fixed maturity securities issued by Goldman Sachs, Lehman Brothers, Morgan
Stanley and Wachovia were $4.1 million, $9.6 million, $7.4 million and $2.0 million respectively. Fund of hedge fund performance includes actual reported results to August 31, 2008, together with an estimate of performance for the month of
September, as provided by the fund manager.



15



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We benefitted from a $1.8 million net gain from our investment in mortgage backed securities, which was a new asset class introduced in the quarter, with
securities being purchased in August 2008. The decision to invest in this asset class had been made much earlier in the year, with the strategy being to focus predominantly on agency pass-through securities. The purpose of the allocation is to
provide greater diversification to our overall fixed maturity portfolio. We also benefited from a $2.1 million realized gain from our sale of one of our equity investments in mutual funds during the quarter ended September 30, 2008.

In the quarter ended September 30, 2008, we incurred net losses and loss adjustment expenses of $98.5 million, compared to $30.4 million in the
third quarter of 2007. Losses in the third quarter of 2008 included $106.0 million from hurricane Ike, $3.7 million from hurricane Gustav and a $4.7 million increase for the storm that impacted Queensland, Australia in the first quarter of this
year. These amounts were partly offset by reductions to our estimates of net ultimate losses for a number of prior year events, predominantly from 2005 and 2007, totaling $23.1 million. These reductions included $8.5 million for hurricanes Katrina,
Rita and Wilma; $9.3 million for major events that occurred in 2007, with balance spread across other events. The reductions to our estimates of ultimate net losses for these events followed the continuing flow of information from our clients and
brokers in the affected areas, together with our own internal review and analysis. 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 2007.
This was offset in part by reductions to reserves for prior events totaling $26.9 million, the largest component of which was a reduction of $23.1 million to our estimates of ultimate loss from events earlier in 2007. 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.

Net acquisition costs incurred, which are primarily commissions and brokerage fees paid to intermediaries for the production of business, were $10.1 million for the quarter ended September 30, 2008, compared to $9.8 million for the
third quarter of 2007. These costs have increased as a result of the increase in earned premiums in 2008, although not proportionately, because brokerage on reinstatement premiums is generally applied at a lower level than for basic premiums.
General and administrative expenses were $6.0 million in the quarter ended September 30, 2008, compared to $5.8 million in the corresponding period of 2007.

In the quarter ended September 30, 2008 we incurred interest expense of $1.3 million on the $150.0 million drawdown from our syndicated bank credit facility, which occurred on June 12, 2008, compared to $nil
in the corresponding period of 2007. The rate of interest on this loan currently is 3.375% and resets quarterly based on LIBOR until the due balance is repaid. The next reset will be effective on December 12, 2008.

RESULTS OF OPERATIONS, NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007

Our net income for the nine months ended September 30, 2008 was $46.7 million, compared to $218.4 million for the nine months ended September 30, 2007. The primary reason for the decrease are changes in fair
value in our investment portfolio for the nine months ended September 30, 2008, compared to a net gain in the corresponding period of 2007. In addition, there was a decrease in investment income and a decrease in earned premiums. These
decreases were partially offset by the decrease in incurred losses. Details of these movements are discussed below.

In the nine months
ended September 30, 2008, we wrote premiums of $362.9 million, compared to $388.9 million in the corresponding period of 2007, a decrease of 7%. 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 a decrease of $44.5 million. Business that was not renewed in the nine months ended September 30, 2008 totalled $32.9 million, which was more than offset
by new business written totaling $46.1 million during the same period. Adjustment premiums were $3.8 million in the first nine months of 2008 compared to $5.9 million in the corresponding period of 2007. Reinstatement premiums were $7.3 million
higher in the first nine months of 2008, compared to the corresponding period of 2007, primarily due to increased loss activity in the period.

In the nine months ended September 30, 2008, we ceded $5.1 million of premiums to our retrocessional facilities, compared with $16.4 million for the nine months ended September 30, 2007. 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, our Property Catastrophe Excess of Loss
retrocessional facility was not renewed at January 1, 2008, and there was less participation by retrocessionaires in our proportional reinsurance facility. Net premiums earned in the nine months ended September 30, 2008 were $288.0
million, compared to $300.9 million in the corresponding period of 2007, a decrease of 4%. Despite the benefits of both the increase of reinstatement premiums of written premiums and reduction in premiums ceded during the period, this was offset by
a reduction in basic gross premiums during the previous twelve months.

Net investment income was $70.6 million in the nine months ended
September 30, 2008, compared to $97.5 million in the corresponding period of 2007. We did not receive any dividends from our investment in a fund of hedge funds in the first nine months of 2008, whereas investment income in the nine months
ended September 30, 2007 included $22.3 million in dividends from this investment. In addition, the overall yield from the fixed income portfolio continues to be approximately 20  40 basis points less during 2008, compared to 2007.



16



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There was a net loss from investments in the nine months ended September 30, 2008 of $(165.5)
million, compared to a $41.3 million net gain from investments in the nine months ended September 30, 2007. The unrealized depreciation included in the net loss from investments was $214.1 million in the nine months ended September 30,
2008, whereas the unrealized appreciation included in the net gain from investments was $41.4 million in the nine months ended September 30, 2007. The net loss in the nine months ended September 30, 2008 comprised $(73.5) million from
fixed maturity investments, $(74.8) million from equities and $(18.9) million from our investment in a fund of hedge funds, whereas the net gains in the nine months ended September 30, 2007 comprised $7.9 million from fixed maturity
investments, $41.9 million from equities and $(8.8) million from our investment in a fund of hedge funds. Fund of hedge fund performance includes actual reported results to August 31, 2008, together with an estimate of performance for the month
of September, as provided by the fund manager. We benefitted from a $1.8 million net gain from our investment in mortgage backed securities, which was a new asset class introduced in the period, with securities being purchased in August 2008. We
also benefited from $38.7 million realized gains from sales of our equity investments.

In the nine months ended September 30, 2008,
we incurred net losses and loss adjustment expenses of $97.5 million, compared to $170.6 million in corresponding period of 2007. In addition to the 2008 events noted previously, in the nine months ended September 30, 2008 net incurred losses
primarily included the Alon Refinery explosion in Texas; windstorm Emma that affected parts of Europe; flooding in Iowa in June; and tornadoes that affected the mid-West United States in May. These amounts were partly offset by reductions to our
estimates of net ultimate losses for prior year losses, predominantly from 2005 and 2007, totaling $48.7 million. In addition to the 2007 event noted previously, in the first nine months of 2007 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 acquisition costs incurred were $27.2 million for the nine months ended September 30, 2008, compared to $30.4 million in the corresponding
period of 2007. The reason for the decrease is the reduction in earned premium for the period, combined with the lower level of brokerage on reinstatement premiums. General and administrative expenses were $19.7 million in the nine months ended
September 30, 2008, compared to $19.8 million in the corresponding period of 2007.

For the nine months ended September 30, 2008,
we incurred interest expense of $1.5 million on the $150.0 million drawdown from our syndicated bank credit facility, which occurred on June 12, 2008, compared to $nil in the corresponding period of 2007. The rate of interest on this loan
currently is 3.375% and resets quarterly based on LIBOR until the due balance is repaid. The next reset will be effective on December 12, 2008.

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, 2008 was $504.8 million.

IPCRes sources of funds consist of premiums written, investment income, paid losses recovered from retrocessionaires 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, repurchase of shares and dividends. To date,
we have invested all cash flows not required for operating purposes or returned amounts to shareholders via the repurchase of shares and the payment of dividends. The potential for a large catastrophe means that unpredictable and substantial
payments may need to be made within relatively short periods of time. Hence, future cash flows cannot be predicted with any certainty and may vary significantly between periods.

Net cash inflows from operating activities in the nine months ended September 30, 2008 were $215.2 million compared to $160.1 million in the
corresponding period of 2007. This increase is primarily the result of a decrease in net paid losses which was $111.8 million in the nine months ended September 30, 2008 compared to $221.9 million in the corresponding period of 2007. Going
forward, cash outflows are expected to increase due to payments of losses related to hurricane Ike.



17



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Net cash inflows from investing activities in the nine months ended September 30, 2008 were $159.4
million compared to net cash outflows of $47.9 million in the corresponding period of 2007. This increase is primarily the result of an increase in sales and maturities of fixed maturity and equity investments, aggregating $1,539.1 million in the
nine months ended September 30, 2008 compared to $848.3 million in the corresponding period of 2007. This was to some degree offset by an increase in the purchases of fixed maturity investments of $1,377.4 million in the nine months ended
September 30, 2008 compared to $871.3 million in the corresponding period of 2007. Net cash outflows from financing activities in the nine months ended September 30, 2008 were $208.5 million compared to $150.4 million in the corresponding
period of 2007. This resulted from the Companys repurchase of $311.3 million of its common shares in the first nine months of 2008 together with the payment of dividends of $47.2 million, which were partially financed by a drawdown on the
Companys credit agreement of $150 million. Cash and cash equivalents increased by $166.1 million in the nine months ended September 30, 2008, resulting in a balance of $205.5 million at September 30, 2008. This balance is deposited
with three institutions, two of which are rated AAA and one of which is rated AA. There are daily values available for our cash and cash equivalents, including our money market funds.

At September 30, 2008, 56% of IPCs fixed maturity investment portfolio (based on fair value) was held in securities rated AAA, and 28% was
held in securities rated AA. At December 31, 2007 the proportions of securities so rated were 59% and 24%, respectively. The following table summarizes the composition of the fair value of fixed maturity investments by rating as of
September 30, 2008 and December 31, 2007:



|                                        |  |                          |   |  |                         |  
|--------------------------------------- |  | ------------------------ | - |  | ----------------------- | -
|                                        |  | As of September 30, 2008 |   |  | As of December 31, 2007 |  
|U.S. Government and government agencies |  | 12.1                     | % |  | 12.4                    | %
|AAA                                     |  | 45.0                     | % |  | 46.9                    | %
|AA                                      |  | 27.0                     | % |  | 23.7                    | %
|A                                       |  | 15.6                     | % |  | 17.0                    | %
|BBB                                     |  | 0.2                      | % |  | 0.0                     | %
|Other                                   |  | 0.1                      | % |  | 0.0                     | %
|                                        |  |                          |   |  |                         |  
|                                        |  | 100.0                    | % |  | 100.0                   | %
|                                        |  |                          |   |  |                         |  

All of the mortgage backed securities are U.S. Government and government agency securities and are
rated AAA. At September 30, 2008 the average modified duration of IPCs fixed maturity portfolio was 3.2 years, compared to 3.5 years at December 31, 2007. 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 ongoing commitments. Our current investment strategy is defined primarily by the need to safeguard our capital, since we believe that the risks inherent in catastrophe
reinsurance should not be augmented by a speculative investment policy. Our investment guidelines specify, among other things, country and issue limits, and limit the permitted issuers, the amount of non-U.S. dollar denominated securities and the
target duration of the portfolio.

The fair value of fixed maturity investments classified by category as of September 30, 2008 and
December 31, 2007 are as follows:



|                                               |  |                          |  |                        
|---------------------------------------------- |  | ------------------------ |  | -----------------------
|                                               |  | As of September 30, 2008 |  | As of December 31, 2007
|                                               |  | ($ in thousands)         |  | ($ in thousands)       
|U.S. Government and government agencies        |  | 212,089                  |  | 224,135                
|Other governments                              |  | 62,260                   |  | 85,009                 
|Banking and financial                          |  | 757,757                  |  | 771,714                
|Other corporate                                |  | 401,784                  |  | 404,814                
|Supranational entities                         |  | 216,930                  |  | 317,603                
|Mortgage backed securities                     |  | 102,382                  |  |                       
|                                               |  |                          |  |                        
|Total fair value of fixed maturity investments |  | 1,753,202                |  | 1,803,275              
|                                               |  |                          |  |                        

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 these ratings. Prior to October 2005, both A.M. Best and S & P had given IPCRe and IPCRe Europe insurer financial strength ratings of A+. In November 2005, both rating agencies lowered the ratings
to their current levels as a result of the impact on our net income and shareholders equity resulting from the devastation brought by hurricanes Katrina and Rita, and S & P ascribed a Negative outlook. In April 2007, S & P
further lowered our rating predominantly as a result of a reassessment of our mono-line business model even though that model has



18



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remained relatively unchanged since our inception. S & P then improved the outlook to Stable. In November 2007, A.M. Best affirmed our A
rating, but lowered the outlook to Negative.If these ratings are reduced further 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 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 and could result in a significant
loss of business as ceding companies move to reinsurers with higher ratings.

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 a commercial bank pursuant to a bilateral facility in the amount of $350 million as well as through
the $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. As of September 30, 2008 and December 31, 2007, there were outstanding letters of credit of $122.5 million and $183.3 million, respectively. The majority of the amount at the end of September 30, 2008 was due to the
requirements of our clients as a result of claims arising from hurricanes Katrina, Rita and Wilma. We expect that as a result of hurricane Ike, the amount of outstanding letters of credit will increase to cover unpaid liabilities. 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. The total amount of security required by the banks under the facilities at September 30, 2008 and December 31,
2007 was $143.3 million and $214.8 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 currently $600 million. Under the terms of the $500 million credit agreement, IPC is permitted to declare and pay dividends provided there are no
defaults of covenants 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, 2008 the maximum dividend payable by IPC Holdings under the terms of the
facility was $662.1 million. As of the date of this report we are in compliance with all terms and covenants thereof.

None of the Company,
IPCRe or IPCUSL has 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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|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, 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 reflect current market behaviour or predict future market behaviour. Therefore,
such models are tools augmented by the experience and judgement of senior management.

Our investment manager performed a VaR analysis to estimate the maximum potential loss of fair value for each segment of market risk, as of September 30, 2008 and 2007 and for the intervening quarterly points. 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 maturity securities) using the historical simulation methodology. At September 30, 2008 the VaR of IPCRes investment
portfolio was $24.0 million, which represents a 95thpercentile 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, 2008 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, 2008, and the average thereof (expressed in thousands of U.S. dollars):



|                          |  |                     |         |   |                |   |         |                 |  |   |                    |   |  |                     |         |   |                                              |   |         |   |  |   |         |  
|------------------------- |  | ------------------- | ------- | - | -------------- | - | ------- | --------------- |  | - | ------------------ | - |  | ------------------- | ------- | - | -------------------------------------------- | - | ------- | - |  | - | ------- | -
|Market Risk               |  | AtSeptember 30,2008 |         |   | AtJune 30,2008 |   |         | AtMarch 31,2008 |  |   | AtDecember 31,2007 |   |  | AtSeptember 30,2007 |         |   | Average for12 months endedSeptember 30, 2008 |  
|Currency                  |  | $                   | 1,066   |   |                | $ | 1,316   |                 |  | $ | 1,416              |   |  | $                   | 2,324   |   |                                              | $ | 2,508   |   |  | $ | 1,726   |  
|Interest Rate             |  |                     | 27,950  |   |                |   | 23,104  |                 |  |   | 16,871             |   |  |                     | 19,956  |   |                                              |   | 22,889  |   |  |   | 22,154  |  
|Equity (incl. hedge fund) |  |                     | 14,692  |   |                |   | 19,862  |                 |  |   | 18,140             |   |  |                     | 24,782  |   |                                              |   | 21,509  |   |  |   | 19,797  |  
|                          |  |                     |         |   |                |   |         |                 |  |   |                    |   |  |                     |         |   |                                              |   |         |   |  |   |         |  
|Sum of Risk               |  |                     | 43,708  |   |                |   | 44,282  |                 |  |   | 36,427             |   |  |                     | 47,062  |   |                                              |   | 46,906  |   |  |   | 43,677  |  
|Diversification Benefit   |  |                     | (19,690 | ) |                |   | (20,433 | )               |  |   | (18,704            | ) |  |                     | (22,119 | ) |                                              |   | (18,913 | ) |  |   | (19,972 | )
|                          |  |                     |         |   |                |   |         |                 |  |   |                    |   |  |                     |         |   |                                              |   |         |   |  |   |         |  
|Total Net Risk            |  | $                   | 24,018  |   |                | $ | 23,849  |                 |  | $ | 17,723             |   |  | $                   | 24,943  |   |                                              | $ | 27,993  |   |  | $ | 23,705  |  
|                          |  |                     |         |   |                |   |         |                 |  |   |                    |   |  |                     |         |   |                                              |   |         |   |  |   |         |  

From December 31, 2007 to September 30, 2008, equity VaR decreased due to the sale of
parts of our equity portfolio and subsequent decrease in the fair value of our equity positions. However, this was partly offset by the recent volatility in the equity markets, predominantly in the United States. In addition, following the initial
decrease in interest rate VaR primarily due to a reduction in the level of interest rates in the United States, interest rate VaR increased significantly in the third quarter of 2008 as a result of an increase in the level of yields as well as the
volatility thereof. Exchange rate VaR has decreased due to the decrease in the market value of foreign currency denominated positions. 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. As of September 30, 2008 an estimated $55 million (December 31, 2007$29 million) of net reinsurance premiums receivable, funds withheld and cash, and an estimated $67 million (December
31, 2007$142 million) of net loss reserves, were denominated in non-U.S. currencies. The currencies to which IPC has the most net exposure are the Australian dollar, Japanese yen and the euro. If the dollar weakened 10% against the Australian
dollar and the euro, our net adverse exchange exposure would be approximately $12.5 million and $5.1 million respectively. If the dollar strengthened 10% against the yen, our net adverse exchange exposure would be approximately $7.6 million.



20



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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. In addition, 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, 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 IPC Holdings wholly-owned subsidiary(ies), IPCRe Limited (IPCRe) and/or IPCRe
Europe; (iv) a decrease in the level of demand for property catastrophe reinsurance, or increased competition owing to increased capacity of reinsurers offering property catastrophe coverage; (v) the effect of competition on market trends
and pricing; (vi) loss of our non-admitted status in U.S. 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 United States; (ix) loss
of services of any one of our executive officers; (x) changes in interest rates and/or equity values in the United States and elsewhere and continued instability in global credit markets; or (xi) changes in exchange rates and greater than
expected currency exposure.



21



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PART II. OTHER INFORMATION



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

NONE



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

As a result of the
current market conditions and instability in the global credit markets, the following amends and restates in its entirety the risk factor labeled If IPC Holdings subsidiary, IPCRe, is unable to obtain the necessary credit we may not
be able to offer reinsurance in the United States.in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC on February 22, 2008.

If IPC Holdings subsidiary, IPCRe, is unable to obtain the necessary credit we may not be able to offer reinsurance in the
United States.

IPCRe is a registered Bermuda insurance company and is not licensed or admitted as an insurer in any
jurisdiction in the United States. Because jurisdictions in the United States do not currently permit insurance companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their statutory financial statements unless
security is posted, IPCRes reinsurance contracts with U.S. clients generally require it to post a letter of credit or provide other security to cover loss reserves to reinsureds. Currently IPCRe obtains letters of credit through a bilateral
facility with a commercial bank, and a syndicated facility. In turn, IPCRe provides the banks security by giving them a lien over certain of IPCRes investments in an amount up to 118% of the aggregate letters of credit outstanding. The maximum
amount available to us under our letter of credit facilities is currently $600 million. The maximum amount available to us would be lower if the value of IPCRes investment portfolio were to reduce as a result, for example, of market
fluctuations and market volatility. See A significant amount of our assets is invested in fixed maturity and equity securities that are subject to market volatilityin Part I, Item 1A of our annual report on Form 10-K for the
year ended December 31, 2007 filed with the SEC on February 22, 2008 and Difficult conditions in the global capital markets and the economy generally may materially adversely affect our results of operations and we do not expect
these conditions to improve in the near future below.

If IPCRe 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 ability to renew or replace these credit facilities at maturity is subject to many factors beyond our control, such as more stringent credit criteria and/or
conditions emanating from or as a result of the currently difficult conditions in the global capital markets, the effect of which may be to make a renewal or replacement so onerous as to make us consider alternate sources of such liquidity or limit
our ability to write business for our clients in the United States.

In addition, 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, 2007 filed with the SEC on February 22, 2008.

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. 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. 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, and ascribed a Negative outlook. Both of
these ratings were affirmed during 2006, but in 2007 S & P lowered our rating to A-, and improved the outlook to Stable, while A.M. Best affirmed our A rating, but lowered the outlook to Negative. 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 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 and could result in a significant loss of business as ceding companies move to reinsurers with higher ratings.



22



---

In view of the difficulties experienced recently by many financial institutions,
including our competitors in the reinsurance industry, we believe it is possible that the rating agencies, including A.M. Best and S & P will heighten the level of scrutiny that they apply to such institutions, will increase the frequency and
scope of their credit reviews, will request additional information from the companies that they rate, and may adjust upward the capital and other requirements employed in their models for maintenance of certain ratings levels. We cannot predict what
actions rating agencies may take, or what actions we may take in response to the actions of rating agencies, which could adversely affect our business. As with other companies in the reinsurance industry, our ratings could be downgraded at any time
and without any notices by any rating agency.

In addition, the following amends and restates in its entirety the risk
factor labeled Increases in interest rates or fluctuations in currency exchange rates may cause us to experience losses.in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2007 filed
with the SEC on February 22, 2008.

Changes in interest rates, market volatility and/or fluctuations in currency
exchange rates may cause us to experience losses.

Because of the unpredictable nature of losses that may arise
under property catastrophe policies, our liquidity needs can be substantial and can arise at any time. The market value of our fixed maturity investments is subject to fluctuation depending on changes in prevailing interest rates. We currently do
not hedge our investment portfolio against interest rate risk. Accordingly, increases in interest rates during periods when we sell fixed maturity securities to satisfy liquidity needs may result in losses. An increase in market interest rates could
also have a material adverse effect on the value of our investment portfolio, for example, by decreasing the fair values of the fixed maturity securities that comprise a substantial portion of our investment portfolio. As interest rates decrease or
remain at low levels, we may be forced to reinvest proceeds from investments that have matured or sold at lower yields, reducing our investment margin. Moreover, borrowers may prepay or redeem the fixed maturity investments and mortgage backed
securities in our investment portfolio with greater frequency in order to borrow at lower market rates, which exacerbates this risk.

In addition, market volatility can make it difficult to value certain of our securities if trading becomes less frequent. As such, valuations may include assumptions or estimates that may have significant period to period changes which
could have a material adverse effect on our consolidated results of operations or financial condition. Continuing challenges include investor anxiety over the U.S. economy, rating agency downgrades of various structured products and financial
issuers, unresolved issues with structured investment vehicles, deleveraging of financial institutions and hedge funds and a dislocation in the inter-bank market. If significant, continued volatility, changes in interest rates, a lack of pricing
transparency, lack of market liquidity, declines in equity prices, and the strengthening or weakening of foreign currencies against the U.S. dollar, individually or in tandem, could have a material adverse effect on our consolidated results of
operations, financial condition or cash flows through realized losses, and changes in unrealized positions.

Our functional
currency is the U.S. dollar. Our operating currency is generally also the U.S. dollar. However, the premiums receivable and losses payable in respect of a significant portion of our business are denominated in currencies of other countries,
principally industrial countries. Consequently, we may, from time to time, experience substantial exchange gains and losses that could affect our financial position and results of operations. We currently do notand as a practical matter
cannothedge our foreign currency exposure with respect to potential claims until a loss payable in a foreign currency occurs (after which we may purchase a currency hedge in some cases).

In addition, the following risk factor is being inserted after the risk factor labeled Increases in interest rates or
fluctuations in currency exchange rates may cause us to experience losses.in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC on February 22, 2008, as amended and
restated herein.

Difficult conditions in the global capital markets and the economy generally may materially
adversely affect our results of operations and we do not expect these conditions to improve in the near future.



23



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Because our investments are classified as Trading, all changes to the fair
value of our investment portfolio are recorded as net (losses) gains on investments in our consolidated statements of (loss) income. Thus our results of operations are materially affected by conditions in the global capital markets and the economy
generally, both in the U.S. and elsewhere around the world. The stress experienced by global capital markets that began in the second half of 2007 continued and substantially increased during the third quarter of 2008.

Recently, concerns over inflation, energy costs, geopolitical issues, the availability and cost of credit, the U.S. mortgage market and a
declining real estate markets in the U.S. and elsewhere have contributed to increased volatility and diminished expectations for the economy and the markets going forward. These factors, combined with volatile oil prices, declining business and
consumer confidence and increased unemployment, have precipitated an economic slowdown and fears of a possible recession. In addition, the fixed-income markets are experiencing a period of extreme volatility, which has negatively impacted market
liquidity conditions. Initially, the concerns on the part of market participants were focused on the subprime segment of the mortgage backed securities market. But these concerns have since expanded to include a broad range of mortgage and asset
backed and other fixed maturity investments, including those rated investment grade, the U.S. and international credit and interbank money markets generally, and a wide range of financial institutions and markets, asset classes and sectors.

As a result, the market for fixed maturity investments has experienced decreased liquidity, increased price volatility,
credit downgrade events and increased probability of default. Securities that are less liquid are more difficult to value and may be hard to dispose of. U.S. and international equity markets have also been experiencing heightened volatility and
turmoil. These events and the continuing market upheavals may have an adverse effect on us, in part because we have a large investment portfolio.

Decreases in value may have a material adverse effect on our results of operations or financial condition. In the event of extreme prolonged market events, such as the global credit crisis, we could incur significant
losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss due to market volatility.



24



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

(a) None.

(b) None.

(c) Issuer Purchases of Equity Securities.



|                     |  |                               |  |                              |       |                                                                         |           |                                                                                       |       
|-------------------- |  | ----------------------------- |  | ---------------------------- | ----- | ----------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------------------- | ------
|Period               |  | TotalNumber ofSharesPurchased |  | AveragePrice Paidper Share/$ |       | Total Number ofShares Purchased asPart of the PubliclyAnnounced Program |           | Maximum Dollar value ofShares that may yet bePurchased under theProgram / 000s U.S. $
|July 1-31, 2008      |  | 2,141,633                     |  | $                            | 28.02 |                                                                         | 2,141,633 |                                                                                       | 38,546
|August 1-31, 2008    |  | 1,196,126                     |  | $                            | 32.23 |                                                                         | 1,196,126 |                                                                                       |      
|September 1-30, 2008 |  |                              |  |                              |      |                                                                         |          |                                                                                       |      
|Total                |  | 3,337,759                     |  | $                            | 29.53 |                                                                         | 3,337,759 |                                                                                       |       

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 repurchases were to 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 was May 1, 2008. As of December 31, 2007, we
had $11.3 million remaining under our authorized share repurchase program. On February 14, 2008, the Company announced that its Board of Directors had authorized a share repurchase of up to $300 million of the Companys common shares. The
authorization ends on April 1, 2009. As of September 30, 2008, we had completed our authorized share repurchase programs.



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

NONE



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

NONE



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

NONE



25



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|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                                                       
|              |  |                
|11.1          |  | (1)             |  | Reconciliation of basic and diluted net (loss) income per common share (EPS)                        
|              |  |                
|12.1          |  | (1)             |  | Statement of Computation of Ratios of Earnings to Fixed Charges                                       
|              |  |                
|15.1          |  | (1)             |  | Letter re unaudited interim financial information                                                     
|              |  |                
|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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

IPC Holdings, Ltd.

We have reviewed the consolidated balance sheet of IPC Holdings, Ltd. and subsidiaries as of September 30, 2008, the related consolidated statements
of (loss) income and comprehensive (loss) income for the three-month and nine-month periods ended September 30, 2008 and 2007, and the related consolidated statements of shareholders equity and cash flows for the nine-month periods ended
September 30, 2008 and 2007. These condensed consolidated financial statements are the responsibility of the Companys management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of
which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheet of IPC Holdings, Ltd. and subsidiaries as of December 31, 2007, and the related consolidated statements of income, comprehensive income, shareholders equity, and cash flows for the year ended December 31,
2007 (not presented herein); and in our report dated February 22, 2008 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as
of December 31, 2007, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.



|                                                        
|--------------------------------------------------------
|                                                        
|/s/ KPMG                                                
|Chartered Accountants Hamilton, Bermuda November 3, 2008



27



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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 3, 2008 |  | /s/ James P. Bryce                                  
|                      |  | James P. Bryce                                      
|                      |  | President and Chief Executive Officer               
|                      | 
|Date November 3, 2008 |  | /s/ John R. Weale                                   
|                      |  | John R. Weale                                       
|                      |  | Executive Vice President and Chief Financial Officer



28



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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                                                       
|              |  |                
|11.1          |  | (1)             |  | Reconciliation of basic and diluted net (loss) income per common share (EPS)                        
|              |  |                
|12.1          |  | (1)             |  | Statement of Computation of Ratios of Earnings to Fixed Charges                                       
|              |  |                
|15.1          |  | (1)             |  | Letter re unaudited interim financial information                                                     
|              |  |                
|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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29