IPC Holdings Ltd. Reports First Quarter 2003 Results

President and Chief Executive Officer Jim Bryce commented: "Our record first quarter results reflect both our continuing growth in an ongoing healthy market, and a benign period in terms of catastrophic events. There is a continuing and intensifying focus on financial strength and ratings. We believe that we have benefitted from our consistent A+ ratings from both A.M. Best and Standard & Poor's, with a stable outlook, in an industry environment of falling ratings. We also believe that our strong balance sheet and very modest balance of reinsurance recoverables, provides our brokers and clients with confidence that we will continue to meet all of our promises to pay, all of the time. We are about to enter our second decade of operations. We, like the other remaining Bermuda companies from the "Class of €˜93", have completed approximately ten years of operations that have seen the occurrence of many catastrophic events, including the largest and third largest insured loss events of all time. We have not only survived those events, we have emerged in a stronger financial position and with a reputation for being one of the most responsible and responsive companies in terms of claims payments. We have remained true to our original business plan, and we believe that this focus on property catastrophe reinsurance conducted with our prudent approach to risk management, will provide continuing growth in shareholder value for the future".

We wrote gross premiums of $191.9 million in the first quarter of 2003, an increase of 30% over the $147.0 million we wrote in the first quarter of 2002. Premiums were higher because 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 5% to 10%, and more for loss impacted programmes affected by the summer flood losses in Eastern and Central Europe and fires in Canada.

We ceded premiums of $10.0 million in the first quarter of 2003, compared to $3.0 million in the first quarter of 2002. This increase reflects increased cessions to our Property Carastrophe Aggregate Excess of Loss facility, as well as the increase in retrocedents' participation in our proportional reinsurance facility.

Our net premiums earned in the quarter ended March 31, 2003 were $74.3 million, compared to $46.4 million earned in the quarter ended March 31, 2002, an increase of 60%. The increase in our net premiums earned reflects the increase in written premiums over the past twelve months. We also benefitted from comparative increases in adjustment and reinstatement premiums in the first quarter of 2003, over the first quarter of 2002. These premiums are fully earned when written.

We earned net investment income of $11.5 million in the quarter ended March 31, 2003, compared to $11.9 million in the first quarter of 2002. This decrease is primarily due to the decline in the average yield of our investment portfolio because of lower interest rates and their impact on the reinvestment of maturing fixed income securities, offset in part by the increase in our invested assets, due to our positive operating cash flow in the period.

Net realized gains on our investments in the quarter ended March 31, 2003 were $3.7 million, compared with net realized losses of $(0.8) million in the first quarter of 2002. Realized gains and losses fluctuate from period to period, depending on the individual securities sold, as recommended by our investment advisors. In the first quarter of 2002, we wrote down the cost basis of certain equity investments by $1.3 million, where there had been a decline in value that was considered other than temporary, in accordance with FAS 115.

We incurred net loss and loss adjustment expenses of $11.2 million in the quarter ended March 31, 2003. This compares to $7.6 million for the first quarter of 2002. The loss ratio (ratio of losses and loss adjustment expenses to net premiums earned) was 15.0% in the first quarter of 2003, compared to 16.4% for the first quarter of 2002.

Our acquisition costs, which are primarily commissions and fees paid to brokers for the production of business, were $7.7 million for the quarter ended March 31, 2003, compared to $5.0 million in the first quarter of 2002. These costs have increased primarily due to the increase in earned premiums.

General and administrative expenses totaled $4.4 million in the first quarter of 2003, compared to $2.9 million in the first quarter of 2002. A significant component of these expenses are administrative service fees, which are based on a percentage of premiums earned, and have therefore increased accordingly. Other expenses which have increased in 2003 compared to 2002 include salaries and benefits, which now include the impact of expensing stock options granted to certain officers in January 2003, fees paid to auditors and lawyers because of increased corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as the increased cost of Directors and Officers liability insurance. Our expense ratio, which is the ratio of acquisition costs plus general and administrative expenses to premiums earned, was 16.3% for the first quarter of 2003, compared to 17.0% for the first quarter of 2002.

Total assets at March 31, 2003 were $1,656.8 million, an increase of 12.4% over total assets at December 31, 2002. At March 31, 2003 total shareholders' equity was $1,349.2 million, compared to $1,291.5 million at December 31, 2002, an increase of 4.5%.

On April 22, 2003 the Board of Directors declared a quarterly dividend of $0.16 per share, payable on June 26, 2003, to shareholders of record on June 10, 2003

Our management will be holding a conference call to discuss these first quarter results at 8.30 a.m. Eastern time tomorrow, April 23, 2003. This conference call will be broadcast simultaneously on the internet at www.videonewswire.com/IPCR/042303, 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, April 26, 2003.