909815--2/27/2007--IPC_HOLDINGS

related topics

{stock, price, share}

{interest, director, officer}

{loss, insurance, financial}

{operation, natural, condition}

{operation, international, foreign}

{tax, income, asset}

{regulation, change, law}

{capital, credit, financial}

{personnel, key, retain}

{provision, law, control}

The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or our results of operations. Establishing reserves for catastrophes is an inherently uncertain process and, if we are required to greatly increase our loss reserves, our operating results may significantly decrease. Uncertainty related to estimated losses from hurricanes Katrina, Rita and Wilma may further materially impact our financial results. As of December 31, 2006, we estimated that the ultimate aggregate losses from hurricanes Katrina, Rita and Wilma was $1,005 million. The impact of these events may materially increase as our ultimate liability is adjusted. We are rated by A.M. Best and S P, and a decline in these ratings could affect our standing among customers and cause our sales and earnings to decrease. The reinsurance business is historically cyclical, and we have experienced, and can expect to experience in the future, periods with excess underwriting capacity and unfavorable premiums. If IPC Holdings subsidiary, IPCRe, is unable to obtain the necessary credit we may not be able to offer reinsurance in the United States. Hurricane Katrina or other significant catastrophes may result in political, regulatory or industry initiatives which could adversely affect our business. IPC Holdings is a holding company, and consequently, it is dependent on IPCRe s and IPCUSL s payments of cash dividends or making of loans. Changes in the regulatory scheme under which we operate could result in material adverse effects on our operations. We are dependent on the business provided to us by reinsurance brokers, and we may be exposed to liability for brokers failure to make payments to clients for their claims. We are dependent on a small number of key employees. A significant amount of our assets is invested in fixed income and equity securities that are subject to market volatility. Increases in interest rates or fluctuations in currency exchange rates may cause us to experience losses. Risks Related to Our Shares We are a Bermuda company and it may be difficult for you to enforce judgements against us or our directors and executive officers. The rights of holders of our shares are governed by Bermuda law, which differs from U.S. law, and our bye-laws restrict shareholders from bringing legal action against our officers and directors. There are limitations on the ownership, transfers and voting rights of our shares. Shareholders investment could be materially adversely affected if we are deemed to be engaged in business in the United States. If you acquire more than 10% of our shares, CFC rules may apply to you. Under certain circumstances, you may be required to pay taxes on your pro-rata share of IPCRe s or IPCRe Europe s related party insurance income. We may become subject to taxes in Bermuda after 2016, which may have a material adverse effect on our financial condition.

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909815--2/27/2007--IPC_HOLDINGS_LTD