IPC Holdings, Ltd. Reports Fourth Quarter 2002 Results

Net income for the three months ended December 31, 2002 of $20.0 million, or $0.41 per share, compared to $20.3, or $0.65 per share, for the fourth quarter of 2001. Net income for the year ended December 31, 2002 was $157.9 million ($3.28 per share), compared to a net loss of $(3.9) million, or $(0.15) per share for the year ended December 31, 2001.

President and Chief Executive Officer Jim Bryce commented: "As indicated in our April, 2002 Press Release, 2002 did indeed turn out to be a landmark year for IPC. We executed our plan with respect to utilization of the additional capital raised at the end of 2001, and this is reflected in the fact that we have more than doubled our deposit premium volume. We believe that this increase has been achieved without any reduction in the quality of our overall portfolio of business, or in our high standards of client selection. We have also benefitted from the fact that 2002 was very benign in terms of catastrophe activity, resulting in us finishing the year with one of our lowest ever loss ratios. This, together with the economies of scale of writing a much larger volume with only small increases in personnel and other operating expenses, has resulted in one of our lowest combined ratios. Accordingly, our operating income for 2002 is nearly double that of the operating income in the company's previous best year. Given the level of earnings we have been able to generate over the past five quarters, we took the decision last month to return to paying a periodic dividend. Renewals for January 2003 were not significantly different from our expectations, and there continues to be a modest firming of prices across our portfolio, although the rate of increase is, as anticipated, less than that experienced in 2002."

We wrote gross premiums of $17.0 million in the fourth quarter of 2002, an increase of 130% over the $7.4 million we wrote in the fourth quarter of 2001. Premiums were higher because we used our increased capacity from our capita raising in 2001 to sarisfy the increased demand from existing clients, and we wrote business for new clients, which more than offset business which we did not renew because of unsatisfactory terms and conditions. In addition, we benefitted from rate increases, generally in the range of 10% to 15% for loss free contracts, with greater increases for contracts where claims had been incurred. This brought our total written premiums for the year ended December 31, 2002 to $259.7 million, an increase of 95% in comparison to the $133.1 million of premiums written in the year ended December 31, 2001. Excluding reinstatement premiums from both periods, gross written premiums would have increased by 131%.

Our net premiums earned in the quarter ended December 31, 2002 were $60.6 million, compared to $28.9 million earned in the quarter ended December 31, 2001, an increase of 109%. The increase in our net premiums earned reflects the increase in written premiums over the past twelve months. Net premiums earned for the year ended December 31, 2002 were $226.4 million, an 84% increase over net premiums earned in the year ended December 31, 2001.

We earned net investment income of $11.9 million in the quarter ended December 31, 2002, compared to $8.7 million in the fourth quarter of 2001. This increase is primarily due to the significant increase in our invested assets following the raising of approximately $546 million of additional capital, net, in December of last year. This increase more than offset the decline in the average yield of our investment portfolio.

Net realized losses on our investments in the quarter ended December 31, 2002 were $(36.6)million compared with net realized losses of $(5.5) million in the fourth quarter of 2001.

We realized $4.0 million of gains from the sale of fixed income and other securities in the

fourth quarter of 2002, which were more than offset by $(40.6) million for write-downs in the

cost basis of equity investments where the decline in value was deemed other-than-temporary. In other-than-temporary impairment considers both the length of time and the extent to which the value of a security has declined. These write-downs are non-cash charges which are recorded as realized losses in our income statement, with a corresponding reduction in unrealized losses in shareholders' equity, even though there were no sales of the securities. As such, the write-downs do not impact shareholders' equity or the carrying value of the investments since our investments are marked-to-market value, in accordance with FAS 115. For the year ended December 31, 2002, these charges totaled $49.1 million, compared to $5.3 million for the year ended December 31, 2001. Net realized losses for the year ended December 31, 2002 totaled

$(44.9) million, compared to a net realized gain of $0.6 million in 2001.

We incurred net loss and loss adjustment expenses of $4.5 million in the quarter ended December 31, 2002, bringing the total for 2002 to $38.8 million. This compares to $6.7 million and $137.6 million, respectively, for the corresponding periods in 2001. The loss ratio (ratio of losses and loss adjustment expenses to net premiums earned) was 7.5% in the fourth quarter of 2002, compared to 23.0% for the fourth quarter of 2001. Our loss ratio for the year ended December 31, 2002 was 17.1%, compared to 111.5% for 2001.

Our acquisition costs and general and administrative expenses totaled $10.7 million for the quarter ended December 31, 2002, compared to $5.3 million in the fourth quarter of 2001.

For the year ended December 31, 2002 total acquisition costs and general and administrative

expenses were $38.4 million, compared to $22.1 million in the year ended December 31, 2001.

For both the fourth quarter and year of 2002, these costs and expenses have increased primarily due to the increase in earned premiums, together with some increases in certain operating expenses.

Movements in the exchange rates of several currencies, particularly the Euro and sterling

resulted in an exchange loss of $(0.8) million on the quarter ended December 31, 2002, compared to a gain of $0.1 million in the fourth quarter of 2001. This reduction partly offset gains made earlier in the year, such that the net foreign exchange gain for the year ended December 31, 2002 was $1.6 million, compared to a net exchange loss of $0.6 million in the year ended December 31, 2001.

Total assets at December 31, 2002 were $1,474.0 million, an increase of 13.2% over total assets at December 31, 2001. At December 31, 2002 total shareholders' equity was $1,291.5 million, compared to $1,105.8 million at December 31, 2001.

IPC's management will be holding a conference call to discuss these fourth quarter results at

8.30 a.m. Eastern time tomorrow, February 12, 2003. This conference call will be broadcast

simultaneously on the internet atwww.videonewswire.com/IPCR, or from our website at www.ipcre.bm, and a replay of the call will also be available at this site from 10.30 a.m.

Eastern time until 12.00 midnight Eastern time on Saturday, February 15, 2003.