##### Table of Contents



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, 2002

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, HM 08, Bermuda

---

(Address of principal executive offices)


(441) 298-5100

---

(Registrants telephone number,
including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [   ]

The number of outstanding common shares par value U.S. $0.01 per share of IPC
Holdings, Ltd., as of November 13, 2002, was 48,172,776.

Exhibit Index located on page 18

1



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TABLE OF CONTENTS



|                                                 |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                   
|                                                 | Item 1. Financial Statements                                                                 
|                                                 | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                 | Item 3. Quantitative and Qualitative Disclosure about Market Risk                            
|                                                 | Item 4. Controls and Procedures                                                              
|PART II-OTHER INFORMATION                       
|                                                 | Item 1. Legal Proceedings                                                                    
|                                                 | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                 | Item 3. Defaults upon Senior Securities                                                      
|                                                 | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                 | Item 5. Other Information                                                                    
|                                                 | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                      
|CERTIFICATIONS                                  
|EXHIBIT INDEX                                   
|EX-11.1: RECONCILIATION OF BASIC AND DILUTED EPS



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements

IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

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

|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  |  | 
|---------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | - | --------- | --------- | ------------------ | - | ----------------- | --------- |  |  | 
|                                                                                                           |                                                                                            |   |           |           | As of              |   | As of            
|                                                                                                           |                                                                                            |   |           |           | September 30, 2002 |   | December 31, 2001
|                                                                                                           |                                                                                            |   |           |           |                    |   |                  
|                                                                                                           |                                                                                            |   |           |           | (unaudited)        |   |                   |           | 
|ASSETS:                                                                                                    |                                                                                            |   |           |           |                    |   |                   |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Fixed maturity investments:                                                                                |                                                                                            |   |           |           |                    |   |                   |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Available for sale, at fair market value
(amortized cost 2002: $1,095,252;
2001: $740,734) |   | $         | 1,137,605 |                    |   | $                 | 758,224   | 
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Equity investments, available for sale at fair
market value (cost 2002: $233,991; 2001: $163,828)          |                                                                                            |   | 183,233   |           |                    |   | 158,870           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Cash and cash equivalents                                                                                  |                                                                                            |   | 30,959    |           |                    |   | 315,207           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Accrued investment income                                                                                  |                                                                                            |   | 21,928    |           |                    |   | 18,841            |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Reinsurance premiums receivable (related party
2002: $9,669; 2001: $3,644)                                 |                                                                                            |   | 82,025    |           |                    |   | 42,356            |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Deferred premiums ceded                                                                                    |                                                                                            |   | 2,049     |           |                    |   | 1,228             |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Loss reserves recoverable (related party
2002: $44: 2001: $68)                                             |                                                                                            |   | 441       |           |                    |   | 681               |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Deferred acquisition costs                                                                                 |                                                                                            |   | 10,594    |           |                    |   | 2,833             |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Prepaid expenses and other assets                                                                          |                                                                                            |   | 6,338     |           |                    |   | 3,476             |          
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|                                                                                                           | TOTAL ASSETS                                                                               |   | $         | 1,475,172 |                    |   | $                 | 1,301,716 | 
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|LIABILITIES:                                                                                               |                                                                                            |   |           |           |                    |   |                   |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Reserve for losses and loss adjustment expenses                                                            |                                                                                            | $ | 128,097   |           |                    | $ | 162,207           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Unearned premiums                                                                                          |                                                                                            |   | 96,537    |           |                    |   | 24,440            |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Reinsurance premiums payable (related party
2002: $336: 2001: $197)                                        |                                                                                            |   | 2,873     |           |                    |   | 1,732             |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Deferred commissions                                                                                       |                                                                                            |   | 316       |           |                    |   | 218               |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Investments pending settlement                                                                             |                                                                                            |   | 14,921    |           |                    |   | 0                 |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Accounts payable and accrued liabilities
(related party 2002: $3,369: 2001: $1,212)                        |                                                                                            |   | 9,580     |           |                    |   | 7,325             |          
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|                                                                                                           |                                                                                            |   | 252,324   |           |                    |   | 195,922           |          
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|SHAREHOLDERS EQUITY:                                                                                      |                                                                                            |   |           |           |                    |   |                   |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Share capital (Common shares outstanding, par
value U.S. $0.01: 2002: 48,172,776;
2001: 48,172,776 shares) |                                                                                            |   | 482       |           |                    |   | 482               |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Additional paid-in capital                                                                                 |                                                                                            |   | 846,267   |           |                    |   | 846,101           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Retained earnings                                                                                          |                                                                                            |   | 384,504   |           |                    |   | 246,568           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Accumulated other comprehensive (loss) income                                                              |                                                                                            |   | (8,405    | )         |                    |   | 12,643            |          
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|                                                                                                           |                                                                                            |   | 1,222,848 |           |                    |   | 1,105,794         |          
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 
|                                                                                                           | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                 |   | $         | 1,475,172 |                    |   | $                 | 1,301,716 | 
|                                                                                                           |                                                                                            |   |           |           |                    |   |                   |           |  | 

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

2



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##### Table of Contents



IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

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

|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|-------------------------------------------------- |  | --------------------------- | ---------- | ------------------------------- |  | ----------- | ---------- | ----------- |  | - | ---------- | - |  | - | ---------- | -
|                                                   |  | Quarter ended September 30, |            | Nine months ended September 30,
|                                                   |  |                             |            |                                
|                                                   |  | 2002                        |            | 2001                            |  | 2002        |            | 2001       
|                                                   |  |                             |            |                                 |  |             |            |            
|                                                   |  | (unaudited)                 |            | (unaudited)                     |  | (unaudited) |            | (unaudited)
|REVENUES:                                          |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|                                                  
|                                                  
|                                                  
|                                                  
|Gross premiums written                             |  | $                           | 35,522     |                                 |  | $           | 33,081     |             |  | $ | 242,680    |   |  | $ | 125,668    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Premiums ceded                                     |  |                             | (538       | )                               |  |             | (713       | )           |  |   | (5,607     | ) |  |   | (4,117     | )
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|Net premiums written                               |  |                             | 34,984     |                                 |  |             | 32,368     |             |  |   | 237,073    |   |  |   | 121,551    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Change in unearned premium reserve, net            |  |                             | 27,924     |                                 |  |             | 12,743     |             |  |   | (71,276    | ) |  |   | (27,108    | )
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|Net premiums earned                                |  |                             | 62,908     |                                 |  |             | 45,111     |             |  |   | 165,797    |   |  |   | 94,443     |  
|                                                  
|                                                  
|                                                  
|                                                  
|Net investment income                              |  |                             | 12,451     |                                 |  |             | 7,871      |             |  |   | 37,408     |   |  |   | 23,506     |  
|                                                  
|                                                  
|                                                  
|                                                  
|Realized (losses) gains, net on investments        |  |                             | (821       | )                               |  |             | 1,703      |             |  |   | (8,246     | ) |  |   | 6,154      |  
|                                                  
|                                                  
|                                                  
|                                                  
|Other income                                       |  |                             | 368        |                                 |  |             | 0          |             |  |   | 2,629      |   |  |   | 0          |  
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|                                                   |  |                             | 74,906     |                                 |  |             | 54,685     |             |  |   | 197,588    |   |  |   | 124,103    |  
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|EXPENSES:                                          |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|                                                  
|                                                  
|                                                  
|                                                  
|Losses and loss adjustment expenses, net           |  |                             | 18,872     |                                 |  |             | 116,715    |             |  |   | 34,244     |   |  |   | 130,894    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Acquisition costs, net                             |  |                             | 6,461      |                                 |  |             | 4,044      |             |  |   | 17,926     |   |  |   | 9,797      |  
|                                                  
|                                                  
|                                                  
|                                                  
|General and administrative expenses                |  |                             | 3,393      |                                 |  |             | 2,633      |             |  |   | 9,805      |   |  |   | 6,982      |  
|                                                  
|                                                  
|                                                  
|                                                  
|Exchange loss (gain), net                          |  |                             | 397        |                                 |  |             | 272        |             |  |   | (2,323     | ) |  |   | 669        |  
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|                                                   |  |                             | 29,123     |                                 |  |             | 123,664    |             |  |   | 59,652     |   |  |   | 148,342    |  
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|NET INCOME (LOSS)                                  |  | $                           | 45,783     |                                 |  | $           | (68,979    | )           |  | $ | 137,936    |   |  | $ | (24,239    | )
|                                                   |  |                             |            |                                 |  |             |            |             |  |   |            |   |  |   |            |  
|Basic net income (loss) per common share           |  | $                           | 0.95       |                                 |  | $           | (2.75      | )           |  | $ | 2.86       |   |  | $ | (0.97      | )
|                                                  
|                                                  
|                                                  
|                                                  
|Diluted net income (loss) per common share         |  | $                           | 0.95       |                                 |  | $           | (2.75      | )           |  | $ | 2.86       |   |  | $ | (0.97      | )
|                                                  
|                                                  
|                                                  
|                                                  
|Weighted average number of common shares 
basic   |  |                             | 48,172,776 |                                 |  |             | 25,063,905 |             |  |   | 48,172,776 |   |  |   | 25,062,540 |  
|                                                  
|                                                  
|                                                  
|                                                  
|Weighted average number of common shares 
diluted |  |                             | 48,265,409 |                                 |  |             | 25,063,905 |             |  |   | 48,267,844 |   |  |   | 25,062,540 |  

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

3



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##### Table of Contents



IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of United States dollars)

|                                   |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |        |  
|---------------------------------- | --------------------------------------------------------------------- | - | --------------------------- | ------ | ------------------------------- | - | ----------- | ------ | ----------- | - | ------- | ------- | - | - | ------- | ------ | -
|                                   |                                                                       |   | Quarter ended September 30, |        | Nine months ended September 30,
|                                   |                                                                       |   |                             |        |                                
|                                   |                                                                       |   | 2002                        |        | 2001                            |   | 2002        |        | 2001       
|                                   |                                                                       |   |                             |        |                                 |   |             |        |            
|                                   |                                                                       |   | (unaudited)                 |        | (unaudited)                     |   | (unaudited) |        | (unaudited)
|NET INCOME (LOSS)                  |                                                                       | $ | 45,783                      |        |                                 | $ | (68,979     | )      |             | $ | 137,936 |         |   | $ | (24,239 | )     
|                                   |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |       
|Other comprehensive (loss) income: |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |       
|                                  
|                                  
|                                  
|                                  
|                                   | Holding (losses) gains, net on
investments during period              |   |                             | (7,746 | )                               |   |             | 4,245  |             |   |         | (29,294 | ) |   |         | 6,329  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Reclassification adjustment
for losses (gains) included in
net income |   |                             | 821    |                                 |   |             | (1,703 | )           |   |         | 8,246   |   |   |         | (6,154 | )
|                                   |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |       
|                                   |                                                                       |   | (6,925                      | )      |                                 |   | 2,542       |        |             |   | (21,048 | )       |   |   | 175     |       
|                                   |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |       
|COMPREHENSIVE INCOME (LOSS)        |                                                                       | $ | 38,858                      |        |                                 | $ | (66,437     | )      |             | $ | 116,888 |         |   | $ | (24,064 | )     
|                                   |                                                                       |   |                             |        |                                 |   |             |        |             |   |         |         |   |   |         |       

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

4



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##### Table of Contents



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

(Expressed in thousands of United States dollars)

|                                                                              |                                             |                                                 |          |                                 |         |             |          |        |         |  
|----------------------------------------------------------------------------- | ------------------------------------------- | ----------------------------------------------- | -------- | ------------------------------- | ------- | ----------- | -------- | ------ | ------- | -
|                                                                              |                                             |                                                 |          | Nine months ended September 30,
|                                                                              |                                             |                                                 |          |                                
|                                                                              |                                             |                                                 |          | 2002                            |         | 2001       
|                                                                              |                                             |                                                 |          |                                 |         |            
|                                                                              |                                             |                                                 |          | (unaudited)                     |         | (unaudited)
|CASH FLOWS FROM OPERATING ACTIVITIES:                                         |                                             |                                                 |          |                                 |         |             |          |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income (loss)                                                             |                                             | $                                               | 137,936  |                                 |         | $           | (24,239  | )     
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Adjustments to reconcile net income to cash provided
by operating activities: |                                             |                                                 |          |                                 |         |             |          |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Amortization of investment premium, net     |                                                 |          | 5,948                           |         |             |          | 331    |        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Realized losses (gains), net on investments |                                                 |          | 8,246                           |         |             |          | (6,154 | )      
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Changes in, net:                            |                                                 |          |                                 |         |             |          |        |        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Accrued investment income                       |          |                                 | (3,087  | )           |          |        | 4,861   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Reinsurance premiums receivable                 |          |                                 | (39,669 | )           |          |        | (34,998 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Deferred premiums ceded                         |          |                                 | (821    | )           |          |        | (1,048  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Loss reserves recoverable                       |          |                                 | 240     |             |          |        | 260     |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Deferred acquisition costs                      |          |                                 | (7,761  | )           |          |        | (3,074  | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Prepaid expenses and other assets               |          |                                 | (2,862  | )           |          |        | (581    | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Reserve for losses and loss adjustment expenses |          |                                 | (34,110 | )           |          |        | 107,250 |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Unearned premiums                               |          |                                 | 72,097  |             |          |        | 28,156  |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Reinsurance premiums payable                    |          |                                 | 1,141   |             |          |        | 1,196   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Deferred commissions                            |          |                                 | 98      |             |          |        | 188     |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                             | Accounts payable and accrued liabilities        |          |                                 | 2,255   |             |          |        | 744     |  
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|Cash provided by operating activities                                         |                                             |                                                 | 139,651  |                                 |         |             | 72,892   |       
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         |                                             |                                                 |          |                                 |         |             |          |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Purchases of fixed maturity investments                                       |                                             |                                                 | (950,906 | )                               |         |             | (383,091 | )     
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Proceeds from sales of fixed maturity investments                             |                                             |                                                 | 606,884  |                                 |         |             | 354,819  |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Proceeds from maturities of fixed maturity investments                        |                                             |                                                 | 9,000    |                                 |         |             | 11,000   |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Purchases of equity investments                                               |                                             |                                                 | (131,990 | )                               |         |             | (39,860  | )     
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Proceeds from sales of equity investments                                     |                                             |                                                 | 42,947   |                                 |         |             | 1,451    |       
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|Cash used for investing activities                                            |                                             |                                                 | (424,065 | )                               |         |             | (55,681  | )     
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                         |                                             |                                                 |          |                                 |         |             |          |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Additional share capital                                                      |                                             |                                                 | 166      |                                 |         |             | 411      |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Cash dividends paid to shareholders                                           |                                             |                                                 | 0        |                                 |         |             | (4,010   | )     
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|Cash provided (used) by financing activities                                  |                                             |                                                 | 166      |                                 |         |             | (3,599   | )     
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|Net (decrease) increase in cash and cash equivalents                          |                                             |                                                 | (284,248 | )                               |         |             | 13,612   |       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Cash and cash equivalents, beginning of period                                |                                             |                                                 | 315,207  |                                 |         |             | 9,409    |       
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       
|Cash and cash equivalents, end of period                                      |                                             | $                                               | 30,959   |                                 |         | $           | 23,021   |       
|                                                                              |                                             |                                                 |          |                                 |         |             |          |       

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

5



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##### Table of Contents



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 nine month periods
ended September 30, 2002 and 2001, respectively, the balance sheet as of
September 30, 2002 and the cash flows for the nine month periods ended
September 30, 2002 and 2001, respectively. These interim consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements for the year ended December 31, 2001.
The results of operations for any interim period are not necessarily
indicative of results for the full year.
|  
|2. |  | DIVIDENDS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | No dividends have been declared or paid in 2002 to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

6



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##### Table of Contents






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



| |  | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The following is a summary of the accounting policies for the three main
components of our balance sheet and statement of income: premiums, losses
(claims) including reserves and investments/investment income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Premiums are recorded at the beginning of each policy, based upon information
received from ceding companies and their brokers. For excess of loss
contracts, the amount of premium is usually contractually documented at
inception, and no management judgement is necessary in accounting for this.
Premiums are earned on a pro rata basis over the policy period. For
proportional treaties, the amount of premium is normally estimated at
inception by the ceding company. We account for such premium using the
initial estimates, and then adjust them once a sufficient period for actual
premium reporting has elapsed, normally around three years. For the nine
months ended September 30, 2002 the net amount of premium written resulting
from estimate accruals was approximately 4% of total premiums written. We
also accrue for reinstatement premiums on loss reserves. Such accruals are
based upon actual contractual terms, 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, 2002 for reinstatement
premiums on Reported But Not Enough losses (RBNE) and Incurred But Not
Reported (IBNR) loss reserves was $5.0 million, the majority of which
related to claims from the European floods in August, 2002 and the World
Trade Center tragedy.
|
| |  | Under accounting principles generally accepted in the United States of
America, we are not permitted to establish loss reserves with respect to
property catastrophe reinsurance until the occurrence of an event which may
give rise to a claim. As a result, only loss reserves applicable to losses
incurred up to the reporting date may be set aside, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Setting appropriate reserves for catastrophes is an inherently uncertain
process. Loss reserves represent our estimates, at a given point in time, of
ultimate settlement and administration costs of losses incurred (including
IBNR losses). We regularly review and update these estimates, using the most
current information available to us. Consequently, the ultimate liability
for a catastrophic loss is likely to differ from the original estimate.
Whenever we determine that any existing loss reserves are inadequate, we are
required to increase the loss reserves with a corresponding reduction, which
could be material, in our net income in the period in which the deficiency is
identified. The establishment of new reserves, or the adjustment of reserves
for reported claims, could result in significant upward or downward changes
to our financial condition or results of operations in any particular period.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | The reserve for losses and loss adjustment expenses is based upon reports,
individual case estimates received from ceding companies, and managements
estimates. Managements estimates are used mostly to estimate IBNR or RBNE
loss amounts. For certain catastrophic events there is considerable
uncertainty underlying the assumptions and associated estimated reserves for
losses and loss adjustment expenses. Reserves are reviewed regularly and, as
experience develops and additional information becomes known, the reserves
are adjusted as necessary. Such adjustments, if necessary, are reflected in
results of operations in the period in which they become known. In addition,
we have an independent firm of actuaries review our reserves semi-annually.
At September 30, 2002 managements estimates for IBNR/RBNE represented
approximately 33.1% of total loss reserves. The largest component of the
estimate related to new reserves for the European floods in August, 2002,
plus additional reserves for claims from the attack on the World Trade
Center.                                                                                                                                                                                                                                                                                                
|
| |  | In accordance with our investment guidelines, our investments consist of
certain equity securities and high-grade marketable fixed maturity
securities. Investments are carried at market value as determined by the
most recently quoted price of each security at the balance sheet date. In
accordance with SFAS 115, unrealized gains and losses are included as a
separate component of shareholders equity. Realized gains and losses on
sales of investments are determined on a first-in, first-out basis. In
addition, unrealized depreciation in the value of individual securities
considered by management to be other than temporary is charged to income in
the period it is determined. Our determination of whether or not the decline
in the value of securities is temporary is based upon the extent of decline,
the length of time such decline has existed, and other quantitative and
qualitative factors. Investment income is recorded when earned and includes
the amortization of premiums and discounts on investments.                                                                                                                                                                                                                                                                                                                                    

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##### Table of Contents





| |  | RESULTS OF OPERATIONS, QUARTERS ENDED SEPTEMBER 30, 2002 AND 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The following is a discussion of the results of operations and financial
position of IPC Holdings, Ltd. References to we, our or IPC mean
IPC Holdings together with its wholly-owned subsidiaries, IPCRe and
IPCUSL. This discussion should be read in conjunction with our
Consolidated Financial Statements and related notes for the nine months
ended September 30, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Our net income for the quarter ended September 30, 2002 was $45.8 million,
compared to a net loss of $(69.0) million for the third quarter of 2001.
Excluding the effects of net realized gains and losses from investments, our
net operating income for the quarter ended September 30, 2002 was $46.6
million, compared to a net operating loss of $(70.7) million for the third
quarter of 2001. This increase is primarily the
result of the significant increase in premiums, and the reduction in loss
ratio, as discussed below. In the third quarter of 2001, results were
significantly impacted by losses caused by the attack on the World Trade
Center.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | In the quarters ended September 30, 2002 and 2001, we wrote premiums of
$35.5 million and $33.1 million, respectively, an increase of 7.4%.
Written premiums in the quarter were higher primarily because we used
our increased capacity resulting from the additional capital that we
raised in December 2001 to write additional business for our existing
clients, as well as new business. It should be noted that the
September 30, 2001 figures contained $17 million of reinstatement
premiums arising from the World Trade Center losses. Premiums were also
higher because of increases in premium rates, which were generally in
the range of 10% to 15% for loss-free contracts, and greater increases
for loss-impacted contracts. The additional premium from existing
clients resulting from additional business written and rate increases
amounted to approximately $10.9 million. Premiums from new business
amounted to $10.0 million. These increases were partly offset by
business which was not renewed because of unsatisfactory terms and
conditions, which totaled approximately $3.4 million. Reinstatement
premiums were $15.1 million lower in the third quarter of 2002 when
compared to the corresponding quarter in 2001, which is again due to the
World Trade Center losses in September 2001. We retroceded premiums of
$0.5 million in the third quarter of 2002, compared to $0.7 million
ceded in the third quarter of 2001. Net premiums earned in the three
months ended September 30, 2002 were $62.9 million, compared to $45.1
million in the same period in 2001, an increase of 39.5%. Earned
premiums were higher due to the increase in written premiums.
|
| |  | Net investment income was $12.5 million in the quarter ended September
30, 2002, compared to $7.9 million for the quarter ended September 30,
2001. The overall yield of the fixed income portfolio was less for the
quarter ended September 30, 2002, than for the corresponding quarter in
2001. In addition, the amount of equity investments in the portfolio
represented a greater proportion of the total portfolio in the third
quarter of 2002, than they did for the corresponding period of 2001,
resulting in a further reduction in yield for the overall portfolio.
These negative factors were more than offset by the increase in the
average balance of invested assets in the third quarter of 2002, which
was 99.6% higher than the third quarter of 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | There was a net realized loss from investments in the quarter ended
September 30, 2002 of $(0.8) million, compared to a net realized gain of
$1.7 million in the third quarter of 2001. Generally, net realized
gains and losses fluctuate from period to period, depending on the
individual securities sold, as recommended by IPCRes investment
advisor. During the quarter, we sold our portfolio of S.& P. 500
stocks, realizing a loss of $9.7 million. In addition, we also
repositioned the fixed maturity portfolio through sales of approximately
$224.6 million, and purchases of $222.1 million, which realized a gain
of $8.1 million. Other gains and losses realized from the sales of
securities in the quarter totaled $0.8 million. The proceeds of the
sales of equities, together with $25.0 million from operating cash, were
invested in the Vanguard Institutional Index fund, which has similar
characteristics to the S.& P. 500 index.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | In the three months ended September 30, 2002, we incurred losses of $18.9
million, compared to $116.7 million in the third quarter of 2001. Losses
included approximately $18.0 million for various 2002 events, primarily the
European floods in August, and minor development from some 2001 events. In
the third quarter of 2001, our losses included $112 million in reserves for
estimated claims arising from the terrorist attack on the World Trade Center.
Our loss and loss expense ratio (the ratio of losses and loss adjustment
expenses to premiums earned) was 30.0% in the third quarter of 2002, compared
to 258.7% in the third quarter of 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Acquisition costs incurred, which consist primarily of commissions and
brokerage fees paid to intermediaries for the production of business,
were $6.5 million for the quarter ended September 30, 2002, compared to
$4.0 million in the corresponding period of 2001, an increase of 59.8%.
Acquisition costs have increased primarily because of the increase in
earned premiums. General and administrative expenses were $3.4 million
in the quarter ended September 30, 2002, compared to the $2.6 million
incurred in the third quarter of 2001. This increase is due primarily
to an increase in administrative fees which are based on earned
premiums, as well as some minor increases in certain operating expenses,
including salaries and benefits and bank charges. IPCs expense ratio
(the ratio of acquisition costs plus general and administrative expenses
to premiums earned) was 15.7% for the quarter ended September 30, 2002
compared to 14.8% for the quarter ended September 30, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

8



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##### Table of Contents





| |  | The following table summarizes the loss and loss expense ratio, expense ratio
and combined ratio (sum of loss and loss expense ratio, plus expense ratio)
for the quarters ended September 30, 2002 and 2001, respectively:
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                          |  |                             |      |      |  |  |       |  
|------------------------- |  | --------------------------- | ---- | ---- |  |  | ----- | -
|                          |  | Quarter ended September 30,
|                          |  |                            
|                          |  | 2002                        |      | 2001
|                          |  |                             |      |     
|Loss & loss expense ratio |  |                             | 30.0 | %    |  |  | 258.7 | %
|                         
|                         
|                         
|                         
|Expense ratio             |  |                             | 15.7 | %    |  |  | 14.8  | %
|                         
|                         
|                         
|                         
|Combined ratio            |  |                             | 45.7 | %    |  |  | 273.5 | %



| |  | RESULTS OF OPERATIONS, NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Our net income for the nine months ended September 30, 2002 was $137.9
million, compared to a net loss of $(24.2) million for the corresponding
period in 2001. Excluding the effects of net realized gains and losses
arising from investments, net operating income for the first nine months
of 2002 was $146.2 million, compared to a net operating loss of $(30.4)
million for the first nine months of 2001. This increase is primarily
the result of higher premiums and lower loss ratio, as discussed below.
In 2001, results were significantly impacted by losses caused by the
attack on the World Trade Center.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | In the nine months ended September 30, 2002 and 2001, we wrote premiums
of $242.7 million and $125.7 million, respectively, an increase of
93.1%. Written premiums in the nine months were higher due to the
utilization of our increased capacity resulting from the additional
capital that we raised in December 2001. We wrote an additional $83.2
million for our existing clients, and $61.7 million for new clients.
New business premiums included $0.9 million from a contract which
provides catastrophic workers compensation and life coverage, and $7.5
million in respect of participations in terrorist property cover pools.
The increase also includes the impact of increases in premium rates,
which were generally in the range of 10% to 20% for loss-free contracts,
and greater increases for loss-impacted contracts. These increases
were partly offset by business which was not renewed because of
unsatisfactory terms and conditions which totaled approximately $13.5
million. Written premiums in the nine months ended 2001 included $19.2
million of reinstatement premiums, of which $17.0 million related to
programs impacted by World Trade Center losses. We ceded premiums of
$5.6 million to IPCRes proportional reinsurance facilities in the first
nine months of 2002, compared to $4.1 million ceded in the first nine
months of 2001. Net premiums earned in the nine months ended September
30, 2002 were $165.8 million, compared to $94.4 million in the same
period in 2001, an increase of 75.6%. Earned premiums were higher due
to the significant increase in written premiums.
|
| |  | Net investment income was $37.4 million in the nine months ended
September 30, 2002, compared to $23.5 million for the nine months ended
September 30, 2001, an increase of 59.0%. This increase is a result of
the 103.1% increase in the average amount of invested assets, offset by
the effect of the reduction in the average yield generated by the
portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | There was a net realized loss from investments in the nine months ended
September 30, 2002 of $(8.2) million, compared to a net gain of $6.2
million in the first nine months of 2001. Net realized gains and
losses fluctuate from period to period, depending on the individual
securities sold, as recommended by IPCRes investment advisor. In
September 2002, we sold our portfolio of S.& P. 500 stocks, realizing a
loss of $9.7 million. In addition, during the year, we wrote down the
cost basis of equity investments in certain S.& P. 500 stocks, where the
decline in value was considered other than temporary. In accordance
with SFAS 115, such a write-down is recognized as a realized loss in the
income statement, even though there were no sales of the securities.
The amount of the write-down was $(8.4) million, for the nine months
ended September 30, 2002. These realized losses were offset in part by
gains realized from the sales of fixed maturity securities (as described
below).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | In the nine months ended September 30, 2002, we incurred losses of $34.2
million, compared to $130.9 million in the first nine months of 2001.
Incurred losses in the first nine months included reserves on the European
floods of $18 million plus various minor catastrophic events which took place
during the nine months, including North American hail storms and tornadoes,
and some minor development of losses from 2001. In the first nine months of
2001, incurred losses were primarily the reserves on certain events which
took place during the nine months, the major event being the World Trade
Center loss ($112 million), but also including, North American winter storms,
storms in Northeast Australia, Tropical Storm Allison and the hail storms
which struck St. Louis and other parts of the mid-West. Our loss and loss
expense ratio was 20.7% in the first nine months of 2002, compared to 138.6%
in the first nine months of 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Acquisition costs incurred, which consist primarily of commissions and
brokerage fees paid to intermediaries for the production of business,
were $17.9 million for the nine months ended September 30, 2002,
compared to $9.8 million in the same period of 2001, an increase of
83.0%. This increase is primarily due to the increase in earned
premiums. General and administrative expenses were $9.8 million in the
nine months ended September 30, 2002, compared to the $7.0 million
incurred in the corresponding period in 2001. This increase is due
primarily to the increase in administrative fees which are based on
earned premiums, and some minor increases in certain operating expenses,
including salaries and benefits. IPCs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

9



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| |  | expense ratio was 16.7% for the nine months ended September 30, 2002 compared
to 17.8% for the corresponding period in 2001.                                         
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The following table summarizes the loss and loss expense ratio, expense ratio
and combined ratio for the nine months ended September 30, 2002 and 2001,
respectively:

|                          |  |                                 |      |      |  |  |       |  
|------------------------- |  | ------------------------------- | ---- | ---- |  |  | ----- | -
|                          |  | Nine months ended September 30,
|                          |  |                                
|                          |  | 2002                            |      | 2001
|                          |  |                                 |      |     
|Loss & loss expense ratio |  |                                 | 20.7 | %    |  |  | 138.6 | %
|                         
|                         
|                         
|                         
|Expense ratio             |  |                                 | 16.7 | %    |  |  | 17.8  | %
|                         
|                         
|                         
|                         
|Combined ratio            |  |                                 | 37.4 | %    |  |  | 156.4 | %



| |  | Excluding losses (and reinstatement premiums) which resulted from the attack
on the World Trade Center, the loss ratio for the nine months ended September
30, 2001 would have been 24.4%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | LIQUIDITY AND CAPITAL RESOURCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | IPC Holdings is a holding company that conducts no reinsurance operations of
its own. Its cash flows are limited to distributions from IPCRe and IPCUSL
by way of loans or dividends. The dividends that IPCRe may pay are limited
under Bermuda legislation and IPCRes revolving credit facility. The Bermuda
Insurance Act of 1978, and subsequent amendments thereto, require IPCRe to
maintain a minimum solvency margin and a minimum liquidity ratio. The
maximum dividend payable by IPCRe in accordance with Bermuda regulations as
of September 30, 2002 was approximately $302.3 million. The maximum amount
IPCRe could have paid in the third quarter under the terms of the credit
facility was $38.1 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | IPCRes sources of funds consist of premiums written, investment income, paid
losses recovered from retrocedants and proceeds from sales and redemptions of
investments. Cash is used primarily to pay losses and loss adjustment
expenses, premiums retroceded, brokerage commissions, excise taxes, general
and administrative expenses and dividends. The potential for a large
catastrophe means that unpredictable and substantial payments may need to be
made within relatively short periods of time, and therefore our cash flows
fluctuate significantly from period to period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Net cash flows from operating activities in the nine months ended September
30, 2002 were $139.7 million compared to $72.9 million in the corresponding
period in 2001. The increase is primarily the result of the significant
increase in premium volume, offset in part by an increase in claims paid
during the period, which were $69.6 million in the nine months ended
September 30, 2002, compared to $22.5 million in the first nine months of
2001. A significant proportion of the claims paid in 2002 relate to Cat.
#48 (the attack on the World Trade Center). We expect to continue to pay
significant amounts in respect of that event during the next six to nine
months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Net cash outflows from investing activities in the nine months ended
September 30, 2002 were $424.1 million. Cash and cash equivalents decreased
by $284.2 million in the nine months ended September 30, 2002, resulting in a
balance of $31.0 million at September 30, 2002. The decrease is due to the
fact that at December 31, 2001, a significant proportion of the proceeds of
our capital raising in December had been invested in commercial paper, time
deposits and other short term instruments with maturities of less than ninety
days, which we classify as cash equivalents. During the first quarter of
2002, our investment managers reinvested these funds in longer dated fixed
income securities and equities. In September, 2002 we sold approximately
$224 million of fixed maturity securities, and bought approximately $222
million of securities with a longer duration. In addition, we used $25.0
million of operating cash together with the proceeds of the sale of our S.&
P. 500 Index equity portfolio noted above, to purchase shares in the Vanguard
Institutional Index fund, which has similar characteristics to the S.& P. 500
Index. At September 30, 2002, 39.5% of IPCs fixed income portfolio
(based on market value) was held in cash, United States Government/Agency
issues and in securities rated AAA, and 42.1% was held in securities rated
AA. The average modified duration of IPCs fixed maturity portfolio was 2.5
years. We believe that IPCRes $150 million revolving credit facility which
expires in June 2003, and the relatively short duration and high quality of
IPCs investment portfolio, will provide sufficient liquidity to meet IPCs
cash demands.
|
| |  | IPCRe is not a licensed insurer in the United States and therefore, under the
terms of most of its contracts with U.S.-based companies, must provide
security to reinsureds to cover unpaid liabilities in a form acceptable to
state insurance commissioners. Typically, this type of security takes the
form of a letter of credit issued by an acceptable bank, the establishment of
a trust, or a cash advance. Currently IPCRe obtains letters of credit
through one commercial bank pursuant to a $100.0 million facility. In turn,
IPCRe provides the bank security by giving the bank a lien over certain of
IPCRes investments in an amount not to exceed the aggregate letters of
credit outstanding to a maximum of $118.0 million. At September 30, 2002,
there were outstanding letters of credit of $86.6 million. If we were
unable to obtain the necessary credit, IPCRe could be limited in its ability
to write business for our clients in the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Our investment portfolio does not currently include options, warrants, swaps,
collars or similar derivative instruments. Our investment policy guidelines
provide that financial futures and options and foreign exchange contracts may
not be used in a speculative manner, but may be used, subject to certain
numerical limits, only as part of a defensive strategy to protect the market
value of the portfolio. Also, our portfolio does not contain any
investments in real estate or mortgage loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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| |  | Neither the Company nor any of its subsidiaries has any other forms of
off-balance sheet arrangements, or cash obligations or commitments.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Neither the Company, IPCRe nor IPCUSL have any material commitments for
capital expenditures.                                             




Item 3. Quantitative and Qualitative Disclosure about Market Risk



| |  | The investment portfolio of IPCRe is exposed to market risk. Market risk is
the risk of loss of fair value resulting from adverse fluctuations in
interest rates, foreign currency exchange rates and equity prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Measuring potential losses in fair values has become the focus of risk
management efforts by many companies. Such measurements are performed
through the application of various statistical techniques. One such
technique is Value at Risk (VaR). VaR is a summary statistical measure
that uses historical interest and foreign currency exchange rates and equity
prices and estimates of the volatility and correlation of each of these rates
and prices to calculate the maximum loss that could occur within a given
statistical confidence level and time horizon.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | We believe that statistical models alone do not provide a reliable method of
monitoring and controlling market risk. While VaR models are relatively
sophisticated, the quantitative market risk information is limited by the
assumptions and parameters established in creating the related models.
Therefore, such models are tools and do not substitute for the experience or
judgement of senior management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Our investment managers performed a VaR analysis to estimate the maximum
potential loss of fair value for each segment of market risk for our
investment portfolio, as of September 30, 2002, June 30, 2002, March 31, 2002
and December 31, 2001. The analysis calculated the VaR with respect to the
net fair value of our financial instrument assets, which includes cash and
cash equivalents, certain equity and high grade fixed maturity securities, as
of September 30, 2002 using historical simulation methodology. The sum of
the VaR for each component of IPCs investment portfolio is offset by the
diversification benefit, which recognizes that changes in factors affecting
the VaR for one component may have an opposite effect on the VaR of another
component. As of September 30, 2002 the VaR of IPCRes investment portfolio
was approximately $14.9 million, which represents a 95th percentile value
change over a one-month time horizon. This result was obtained through
historical simulation using approximately 750 days (3 years) of historical
interest rate, foreign currency exchange rate and equity market data.
|
| |  | The following table presents the VaR of each component of market risk of
IPCRes investment portfolio as of September 30, 2002, June 30, 2002, March
31, 2002, and December 31, 2001, respectively, and the average for the nine
months ended September 30, 2002, calculated using the beginning, ending and
quarterly points (expressed in thousands of U.S. dollars):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                        |  |               |        |          |  |           |         |              |  |                    |         |   |  |   |        |   |  |   |         |  
|----------------------- |  | ------------- | ------ | -------- |  | --------- | ------- | ------------ |  | ------------------ | ------- | - |  | - | ------ | - |  | - | ------- | -
|Market Risk             |  | At            |        | At       |  | At        |         | At           |  | Average for nine  
|                        |  | September 30, |        | June 30, |  | March 31, |         | December 31, |  | months ended      
|                        |  | 2002          |        | 2002     |  | 2002      |         | 2001         |  | September 30, 2002
|                        |  |               |        |          |  |           |         |              |  |                   
|Currency                |  | $             | 892    |          |  | $         | 1,283   |              |  | $                  | 1,351   |   |  | $ | 1,101  |   |  | $ | 1,157   |  
|                       
|                       
|                       
|                       
|Interest Rate           |  |               | 7,947  |          |  |           | 9,554   |              |  |                    | 11,404  |   |  |   | 7,296  |   |  |   | 9,050   |  
|                       
|                       
|                       
|                       
|Equity                  |  |               | 15,625 |          |  |           | 17,029  |              |  |                    | 18,625  |   |  |   | 13,222 |   |  |   | 16,125  |  
|                        |  |               |        |          |  |           |         |              |  |                    |         |   |  |   |        |   |  |   |         |  
|Sum of Risk             |  |               | 24,464 |          |  |           | 27,866  |              |  |                    | 31,380  |   |  |   | 21,619 |   |  |   | 26,332  |  
|                       
|                       
|                       
|                       
|Diversification Benefit |  |               | (9,570 | )        |  |           | (11,576 | )            |  |                    | (12,666 | ) |  |   | (8,305 | ) |  |   | (10,529 | )
|                        |  |               |        |          |  |           |         |              |  |                    |         |   |  |   |        |   |  |   |         |  
|Total Net Risk          |  | $             | 14,894 |          |  | $         | 16,290  |              |  | $                  | 18,714  |   |  | $ | 13,314 |   |  | $ | 15,803  |  
|                        |  |               |        |          |  |           |         |              |  |                    |         |   |  |   |        |   |  |   |         |  



| |  | The primary reason for the decrease in VaR from $16.3 million at June 30,
2002 to $14.9 million at September 30, 2002 was a reduction in the market
interest rate level.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | IPCRes premiums receivable and liabilities for losses from reinsurance
contracts it has written, are also exposed to the risk of changes in value
resulting from adverse fluctuations in foreign currency exchange rates. To
an extent, the impact on loss reserves of a movement in an exchange rate,
will be partly offset by the impact on assets (receivables and
cash/investments) denominated in the same currency, or vice versa. As of
September 30, 2002 an estimated 30.4% (approximately $24.9 million) of
reinsurance premiums receivable, and an estimated $19.1 million of loss
reserves, were denominated in non-U.S. currencies. In addition, we held
U.S.$3.2 million of Australian dollar cash deposits which are to be used to
settle hailstorm claims from 1999. Accordingly, we do not believe that the
impact of exchange rate movements in respect of receivables or loss reserves
on our overall VaR as of September 30, 2002 to be material.

11



---



##### Table of Contents





| |  | Transactions with Non-Independent Parties                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The following is a summary of amounts in respect of significant
non-independent party transactions during the nine month periods ended
September 30, 2002 and September 30, 2001, respectively, (expressed in
thousands of U.S. dollars):

|                                                                       |  |                    |        |                    |  |   |        | 
|---------------------------------------------------------------------- |  | ------------------ | ------ | ------------------ |  | - | ------ | 
|                                                                       |  | September 30, 2002 |        | September 30, 2001
|                                                                       |  |                    |        |                   
|Administrative
services fees (included in General and admin. expenses) |  | $                  | 4,265  |                    |  | $ | 2,436  | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Investment fees netted against investment income:                      |  | $                  | 1,165  |                    |  | $ | 997    | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Underwriting services fee income (included in Other income)            |  | $                  | 2,629  |                    |  | $ | 0      | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Premiums written                                                       |  | $                  | 36,387 |                    |  | $ | 13,266 | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Premiums ceded                                                         |  | $                  | 596    |                    |  | $ | 340    | 



| |  | Underwriting services fee income is a percentage of the premiums written on
behalf of one client, a company in which AIG has a 23.4% ownership interest.
Fees are accrued and taken into income based on the premiums written each
quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In addition, IPCRe assumes premiums through brokers related to shareholders
of the Company. Generally, such premiums represent less than 5% of total
premiums assumed. Brokerage fees incurred on such premiums are generally
10% of the premium.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | For a discussion of certain of our contractual relationships with
non-independent parties, please see Certain Relationships and Related
Transactions in our definitive Proxy Statement on Schedule 14A, filed with
the Securities and Exchange Commission on April 26, 2002 and incorporated by
reference into our Form 10-K for the year ended December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | All transactions with related parties are conducted at arms length, with
normal terms and conditions applicable. To our knowledge, neither the
Company nor any of its subsidiaries have entered into any other significant
transactions with non-independent parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | 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 renewals and
our ability to increase written premium volume and improve profit margins,
market conditions, the impact of current market conditions and trends on
future periods, the impact of our business strategy on our results, trends in
pricing and claims and the insurance and reinsurance market response to
catastrophic events. Some forward-looking statements may be identified by our
use of terms such as believes, anticipates, intends, or expects and
relate to our plans and objectives for future operations. In light of the
risks and uncertainties inherent in all forward-looking statements, the
inclusion of such statements in this document should not be considered as a
representation by us or any other person that our objectives or plans will be
achieved. We do not intend, and are under no obligation, to update any
forward-looking statement contained in this report. The largest single factor
in our results has been and will continue to be the severity or frequency of
catastrophic events, which is inherently unpredictable. Numerous factors
could cause our actual results to differ materially from those in the
forward-looking statements, including, but not limited to, the following: (i)
the occurrence of natural or man-made catastrophic events with a frequency
or severity exceeding our estimates; (ii) any lowering or loss of one of the
financial ratings of our wholly owned subsidiary, IPCRe Limited; (iii) a
decrease in the level of demand for property catastrophe reinsurance, or
increased competition owing to increased capacity of property catastrophe
reinsurers; (iv) the effect of competition on market trends and pricing; (v)
the adequacy of our loss reserves; (vi) loss of our non-admitted status in
United States jurisdictions or the passage of federal or state legislation
subjecting us to supervision or regulation in the United States; (vii) the
impact of the September 11 terrorist attacks and their aftermath on our
reinsureds, on the insurance and reinsurance industry and on the future
coverage for terrorist acts and on the economy in general, and potential
governmental intervention in the insurance and reinsurance industry in the
aftermath of the September 11 terrorist attacks; (viii) challenges by
insurance regulators in the United States to our claim of exemption from
insurance regulation under current laws; (ix) a contention by the United
States Internal Revenue Service that we are engaged in the conduct of a trade
or business within the U.S.; (x) loss of services of any one of our executive
officers; or (xi) changes in exchange rates and greater than expected
currency exposure.




Item 4. Controls and Procedures



| |  | Within the 90-day period prior to the filing of this report, an evaluation
was carried out under the supervision and with the participation of the
Companys management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-14(c) under the
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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##### Table of Contents





| |  | Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were effective. No
significant changes were made in our internal controls or in other factors
that could significantly affect these controls subsequent to the date of
their evaluation.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



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##### Table of Contents






PART IIOTHER INFORMATION




Item 1. Legal Proceedings

NONE




Item 2. Changes in Securities and Use of Proceeds

NONE




Item 3. Defaults upon Senior Securities

NONE




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

NONE




Item 5. Other Information

NONE




Item 6. Exhibits and Reports on Form 8-K



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

|        |  |                                                                        
|------- |  | -----------------------------------------------------------------------
|Exhibit |  |                                                                        
|Number  |  | Description                                                            
|        |  |                                                                        
|3.1     |  | Memorandum of Association of the Company                               
|       
|       
|       
|       
|3.2+    |  | Amended and Restated Bye-laws of the Company                           
|       
|       
|       
|       
|3.3     |  | Form of Memorandum of Increase of Share Capital                        
|       
|       
|       
|       
|11.1*   |  | Reconciliation of basic and diluted net income per common share (EPS)



|+ |  | Incorporated by reference to Exhibit 4.2 to our Registration
Statement on Form S-3 (No. 333-73828).
|- |  | ---------------------------------------------------------------------------------------------------
| 
| 
| 
| 
|* |  | Filed herewith                                                                                     



| |       |  | (b) Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (i)   |  | On August 14, 2002, the Company filed a Form 8-K
current report (date of earliest event reported: August 14, 2002)
(a) advising that the Chief Executive Officer and Chief Financial
Officer had voluntarily executed a Statement Under Oath of
Principal Executive Officer Regarding Facts and Circumstances
Relating to Exchange Act Filings and Statement Under Oath of
Principal Financial Officer Regarding Facts and Circumstances
Relating to Exchange Filings, respectively, and (b) furnishing
such statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (ii)  |  | On August 14, 2002, the Company filed a Form 8-K
current report (date of earliest event reported: August 14, 2002)
(a) advising that the Chief Executive Officer and Chief Financial
Officer had executed a Certification of Chief Executive Officer
and Chief Financial Officer, respectively, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and (b) furnishing such
certifications.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (iii) |  | On July 5, 2002, the Company filed a Form 8-K/A
current report (date of earliest event reported: June 14, 2002)
to report that (a) KPMG had been appointed as the Companys
independent auditors by the Companys shareholders; (b) the
Company intended to have KPMG review the Companys quarterly
financial statements for the quarter ended March 31, 2002; (c)
the Company and its previous independent auditors, Arthur
Andersen, did not have any disagreements during the Companys two
most recent fiscal years ended December 31, 2001 and during any
interim periods from December 31, 2001 through June 14, 2002
that, if not resolved, would have caused Arthur Andersen to make
reference to the disagreement in connection with their reports;
(d) Arthur Andersens audit reports on the Companys consolidated
financial statements as of and for the years ended December 31,
2001 and 2000 did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles; and (e) during
the Companys two most recent fiscal years ended December 31,
2001, and during any interim periods from December 31, 2001
through June 14, 2002, there were no reportable events as defined
in Item 304(a)(1)(v) of Regulation S-K.

14



---



##### Table of Contents



IPC HOLDINGS, LTD.




SIGNATURES

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

|                       |  |                                                                                  | 
|---------------------- |  | -------------------------------------------------------------------------------- | 
|                       |  | IPC Holdings, Ltd.(Registrant)                                                  
|                      
|                       |  |                                                                                 
|                      
|Date November 13, 2002 |  | /s/ James P. BryceJames P. Bryce
President and Chief Executive Officer          
|                      
|                       |  |                                                                                 
|                      
|Date November 13, 2002 |  | /s/ John R. WealeJohn R. Weale
Senior Vice President and Chief Financial Officer

15



---



##### Table of Contents






CERTIFICATIONS

I, James P. Bryce, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 13, 2002

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

16



---



##### Table of Contents



I, John R. Weale, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 13, 2002

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

17



---



##### Table of Contents






EXHIBIT INDEX

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

|        |  |                                                                        
|------- |  | -----------------------------------------------------------------------
|Exhibit |  |                                                                        
|Number  |  | Description                                                            
|        |  |                                                                        
|3.1     |  | Memorandum of Association of the Company                               
|       
|       
|       
|       
|        |  |                                                                        
|       
|       
|       
|       
|3.2+    |  | Amended and Restated Bye-laws of the Company                           
|       
|       
|       
|       
|        |  |                                                                        
|       
|       
|       
|       
|3.3     |  | Form of Memorandum of Increase of Share Capital                        
|       
|       
|       
|       
|        |  |                                                                        
|       
|       
|       
|       
|11.1*   |  | Reconciliation of basic and diluted net income per common share (EPS)



|+ |  | Incorporated by reference to Exhibit 4.2 to our Registration
Statement on Form S-3 (No. 333-73828).
|- |  | ---------------------------------------------------------------------------------------------------
| 
| 
| 
| 
|* |  | Filed herewith                                                                                     

18