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 March 31, ~~2008~~2009

¨	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 (I.R.S. Employer incorporation or organization) Identification No.)


Bermuda		Not Applicable
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

American International Building, 29 Richmond Road, Pembroke, Bermuda		HM 08
(Address of principal executive offices)		(Zip Code)

American International Building, 29 Richmond Road, Pembroke, Bermuda		HM 08
(Address of principal executive offices)		(Zip Code)

(441) 298-5100

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.


x Large accelerated filer		¨ Accelerated filer		¨ Non-accelerated filer		¨ Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes x No

The number of outstanding common shares, par value U.S. $0.01 per share of IPC Holdings, Ltd., as of ~~April~~May 298, ~~2008~~2009 was 5355,~~575~~948,~~140~~821.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of U.S. dollars, except for per -share amounts)

	As ofMarch 31,2008			As ofDecember 31,2007
	As ofMarch 31, 2009			As ofDecember 31, 2008
	(unaudited)
ASSETS:
Fixed maturity investments, at fair value (amortized cost 2008: $1,797,796; 2007: $1,756,532)	$	1,875,812		$	1,803,275
Fixed maturity investments, at fair value (amortized cost 2009: $1,778,090; 2008: $1,777,936)	$	1,772,805		$	1,793,020
Equity investments, at fair value (cost 2008: $404,137; 2007: $485,205)		471,090			630,483
Equity investments, at fair value (cost 2009: $346,937; 2008: $405,708)		295,091			365,147
Cash and cash equivalents		~~128~~122,~~958~~070			3977,~~486~~020
Reinsurance premiums receivable		~~161~~199,~~474~~241			91108,~~393~~033
Deferred premiums ceded		23,~~335~~585			2,~~578~~165
Losses and loss adjustment expenses recoverable		124,~~974~~274			172,~~497~~771
Accrued investment income		2927,~~857~~907			3027,~~369~~717
Deferred acquisition costs		1723,~~768~~302			89,~~893~~341
Prepaid expenses and other assets		114,~~769~~810			3,~~717~~474
TOTAL ASSETS	$	2,~~712~~453,~~037~~085		$	2,~~627~~388,~~691~~688
LIABILITIES:
Reserve for losses and loss adjustment expenses	$	~~355~~354,~~276~~467		$	~~395~~355,~~245~~893
Unearned premiums		~~181~~219,~~889~~641			7585,~~980~~473
Reinsurance premiums payable		24,~~967~~483			~~4,677~~628
Deferred fees and commissions		~~390~~526			~~476~~359
Accounts payable and accrued liabilities		23,382			25,568
Bank loan		—			75,000
TOTAL LIABILITIES		563,904			501,946
Accounts payable and accrued liabilities		24,494			20,388
TOTAL LIABILITIES		603,611			537,741
SHAREHOLDERS’ EQUITY:
Common shares outstanding, par value U.S. $0.01: 2008: 55,947,610; 2007: 57,626,395 shares		560			576
Common shares outstanding, par value U.S. $0.01: 2009:56,092,672; 2008: 56,094,348 shares		561			561
Preferred shares—Series A mandatory convertible preferred shares outstanding, par value U.S. $0.01: 2008: 9,000,000; 2007: 9,000,000		90			90
Additional paid-in capital		1,091,491			1,089,002
Additional paid-in capital		1,294,609			1,334,271
Retained earnings		758,298			762,260
Retained earnings		853,755			791,689
Accumulated other comprehensive loss		(876	)		(876	)
Accumulated other comprehensive loss		(881	)		(881	)
TOTAL SHAREHOLDERS’ EQUITY		1,849,474			1,850,947
TOTAL SHAREHOLDERS’ EQUITY		2,148,133			2,125,745
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,453,085		$	2,388,688
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,712,037		$	2,627,691

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

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Expressed in thousands of U.S. dollars, except for per -share amounts)

	Quarter ended March 31,
	2008			2007
	2009			2008
	(unaudited)			(unaudited)
REVENUES:
Gross premiums written	$	~~197~~234,~~875~~610		$	~~236~~197,~~243~~875
Change in unearned premiums		(~~105~~134,~~909~~168	)		(~~127~~105,~~114~~909	)
Premiums earned		91100,~~966~~442			~~109~~91,~~129~~966
Reinsurance premiums ceded		(23,~~026~~154	)		(72,~~656~~026	)
Change in deferred premiums ceded		~~(243~~1,420	)		~~3,214~~(243	)
Premiums ceded		(21,~~269~~734	)		(42,~~442~~269	)
Net premiums earned		8998,~~697~~708			~~104~~89,~~687~~697
Net investment income		2321,~~874~~866			3323,~~110~~874
Net (losses) gains on investments		(6,020	)		8,677
Net losses on investments		(35,572	)		(6,020	)
Other income		267			~~626~~26
		107,577			147,100
		85,009			107,577
EXPENSES:
Net losses and loss adjustment expenses		539,~~324~~109			525,~~953~~324
Net acquisition costs		89,~~674~~838			108,~~148~~674
General and administrative expenses		724,~~079~~281			7,~~159~~079
Net exchange gain		(303	)		(367	)
Interest expense		383			—
		20,774			69,893
Net exchange loss (gain)		3,146			(303	)
NET INCOME		86,803			77,207
		76,757			20,774
Dividends on preferred shares		4,234			4,186
NET INCOME		8,252			86,803
Net income available to common shareholders	$	82,569		$	73,021
Dividends on preferred shares		—			4,234
Basic net income per common share	$	1.44		$	1.15
Net income available to common shareholders	$	8,252		$	82,569
Diluted net income per common share	$	1.31		$	1.07
Basic net income per common share	$	0.15		$	1.44
Weighted average number of common shares—basic		57,427,602			63,697,354
Diluted net income per common share	$	0.15		$	1.31
Weighted average number of common shares—diluted		66,182,883			72,076,514
Weighted average number of common shares - basic		55,903,740			57,427,602
Weighted average number of common shares - diluted		55,916,256			66,182,883

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

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of U.S. dollars)

	Quarter ended March 31,
	2008		2007
	2009		2008
	(unaudited)		(unaudited)
NET INCOME	$	868,~~803~~252	$	7786,~~207~~803
Other comprehensive income
Additional accumulated benefit pension obligation		—		—
		—		—
COMPREHENSIVE INCOME	$	8,252	$	86,803
COMPREHENSIVE INCOME	$	86,803	$	77,207

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

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Expressed in thousands of U.S. dollars, except per -share amounts)

	As ofMarch 31,2008			As ofDecember 31,2007
	As ofMarch 31, 2009			As ofDecember 31, 2008
	(unaudited)
COMMON SHARES PAR VALUE $0.01:
Balance, beginning of year	$	~~576~~561		$	~~637~~576
Additional shares issued		1			1
Common shares repurchased		—			(108	)
Shares repurchased		(17	)		(62	)
Preferred shares converted to common shares		—			92
Balance, end of period	$	560		$	576
Additional common shares issued		—			1
Balance, end of period	$	561		$	561
PREFERRED SHARES PAR VALUE $0.01:
Balance beginning of year	$	90—		$	90
Additional shares issued		—			—
Preferred shares converted to common shares		—			(90	)
Balance, end of period	$	90—		$	90—
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of year	$	1,~~334~~089,~~271~~002		$	1,~~474~~334,~~092~~271
Shares issued		—			—
Reduction in additional paid-in capital on common share repurchase		—			(250,949	)
Reduction in paid-in capital on common shares repurchase		(41,598	)		(144,513	)
Reduction in additional paid-in capital on conversion of preferred shares		—			(1	)
Restricted shares and share units awarded		2,929			5,489
Additional paid-in capital due to stock-based compensation		1,844			6,689
Net change in deferred compensation		~~(993~~645	)		(~~797~~1,008	)
Balance, end of period	$	1,~~294~~091,~~609~~491		$	1,~~334~~089,~~271~~002
RETAINED EARNINGS:
Balance, beginning of year	$	~~791~~762,~~689~~260		$	~~388~~791,~~826~~689
Cumulative-effect adjustment of adopting SFAS 159		—			127,996
Net income		8,252			90,447
Net income		86,803			385,412
Reduction on common share repurchase		—			(60,301	)
Reduction on common share repurchase		(7,851	)		(44,154	)
Common share dividends paid and accrued		(12,214	)		(44,636	)
Dividends paid and accrued		(16,886	)		(66,391	)
Preferred share dividends paid and accrued		—			(14,939	)
Balance, end of period	$	~~853~~758,~~755~~298		$	~~791~~762,~~689~~260
ACCUMULATED OTHER COMPREHENSIVE LOSS:
Balance, beginning of year	$	(~~881~~876	)	$	~~127,310~~(881	)
Cumulative-effect adjustment of adopting SFAS 159		—			(127,996	)
Other comprehensive income		—			5
Other comprehensive loss		—			(195	)
Balance, end of period	$	(876	)	$	(876	)
Balance, end of period	$	(881	)	$	(881	)
TOTAL SHAREHOLDERS’ EQUITY	$	1,849,474		$	1,850,947
TOTAL SHAREHOLDERS’ EQUITY	$	2,148,133		$	2,125,745

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

IPC HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. dollars)

	Three months endedMarch 31,
	Three months ended March 31,
	2008			2007
	2009			2008
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	868,~~803~~252		$	7786,~~207~~803
Adjustments to reconcile net income to cash provided by operating activities:
Amortization of fixed maturity discounts, net		(270	)		(1,014	)
Amortization of fixed maturity premiums (discounts), net		294			(270	)
Net losses (gains) on investments		6,020			(8,677	)
Net losses on investments		35,572			6,020
Stock compensation		12,~~937~~489			21,~~575~~937
Changes in:
Reinsurance premiums receivable		(7091,~~081~~208	)		(8670,~~427~~081	)
Deferred premiums ceded		~~243~~(1,420	)		~~(3,214~~243	)
Loss and loss adjustment expenses recoverable		4(1,~~523~~503	)		~~409~~4,523
Accrued investment income		~~512~~(190	)		~~3,325~~512
Deferred acquisition costs		(813,~~875~~961	)		(128,~~492~~875	)
Prepaid expenses and other assets		(81,~~052~~336	)		(18,~~578~~052	)
Reserve for losses and loss adjustment expenses		(391,~~969~~426	)		(3139,~~602~~969	)
Unearned premiums		~~105~~134,~~909~~168			~~127~~105,~~114~~909
Reinsurance premiums payable		(13,~~710~~855	)		3(1,~~176~~710	)
Deferred fees and commissions		~~(86~~167	)		~~155~~(86	)
Accounts payable and accrued liabilities		(24,~~138~~106	)		(2,~~406~~138	)
Cash provided by operating activities		7477,~~766~~859			6674,~~551~~766
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed maturity investments		(~~361~~428,~~529~~491	)		(~~350~~361,~~436~~529	)
Proceeds from sale of fixed maturity investments		~~287~~426,~~599~~083			~~280~~287,~~109~~599
Proceeds from maturities of fixed maturity investments		377,~~400~~000			2037,~~000~~400
Purchases of equity investments		(~~2,364~~187	)		(82,~~390~~364	)
Proceeds from sale of equity investments		~~120~~50,000			—120,000
Cash provided by (used in) investing activities		81,106			(58,717	)
Cash provided by investing activities		54,405			81,106
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common shares		~~(49,466~~—	)		—(49,466	)
Net proceeds from share issuance		—			—
Repayment of bank loan		(75,000	)		—
Cash dividends paid to shareholders		(1612,~~934~~214	)		(1716,~~011~~934	)
Cash used in financing activities		(6687,~~400~~214	)		(1766,~~011~~400	)
Net increase (decrease) in cash and cash equivalents		89,472			(9,177	)
Net increase in cash and cash equivalents		45,050			89,472
Cash and cash equivalents, beginning of period		39,486			88,415
Cash and cash equivalents, beginning of year		77,020			39,486
Cash and cash equivalents, end of period	$	~~128~~122,~~958~~070		$	79128,~~238~~958

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

IPC HOLDINGS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. 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”), IPC Limited and IPCRe Underwriting Services Limited (“IPCUSL” and, together with the Company, IPC Limited and IPCRe, “IPC”) and IPCRe Europe Limited (“IPCRe Europe”), which is a wholly-owned subsidiary of IPCRe. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the quarter ended March 31, 2009 ~~2008~~ and ~~2007~~2008, respectively, the consolidated balance sheet as of March 31, ~~2008~~2009 and the consolidated statements of cash flows for the quarter ended March 31, ~~2008~~2009 and ~~2007~~2008, respectively. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2007~~2008, included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on February 2227, ~~2008~~2009. The results of operations for any interim period are not necessarily indicative of results for the full year.

2.	DIVIDENDS:

On ~~February~~March 1518, ~~2008~~2009 the Company ~~paid~~ paid a ~~preferred~~common stock dividend of $0.~~475781~~22 per ~~Series A Mandatory Convertible preferred~~ share to ~~preferred~~ shareholders of record on ~~January~~March 314, ~~2008~~ 2009.

On ~~March~~April 1423, ~~2008~~2009 the Company declared ~~paid~~ a common stock dividend of $0.22 per share, to be paid on June 19, 2009 to shareholders of record on ~~February~~June 293, ~~2008~~ 2009.

On April 24, 2008 the Company declared a preferred dividend of $0.475781 per Series A Mandatory Convertible preferred share, to be paid on May 15, 2008 to preferred shareholders of record on May 1, 2008.

On April 24, 2008 the Company declared a common stock dividend of $0.22 per share, to be paid on June 20, 2008 to shareholders of record on June 4, 2008.

3.	ACCOUNTING FOR STOCK-BASED COMPENSATION AND DISCLOSURE:

The Company adopted a Stock Option Plan (the “Option Plan”), effective February 15, 1996 and ~~the Company adopted~~ a Stock Incentive Plan (the “2003 Stock Incentive Plan”), effective June 13, 2003. On February 20, 2007, the Board of Directors terminated the Option Plan pursuant to its terms, with respect to the common shares not at that time subject to options under the Option Plan and on July 25, 2007, the Board of Directors terminated the 2003 Stock Incentive Plan pursuant to its terms with respect to common shares not at that time subject to awards thereunder.

On April 24, 2007, upon the recommendation of the Compensation Committee of the Board of Directors, the Board of Directors unanimously adopted and approved the IPC Holdings, Ltd. 2007 Incentive Plan (the “2007 Incentive Plan”). The 2007 Incentive Plan was subsequently approved by shareholders at the Company’s Annual General Meeting of shareholders, which was held on June 22, 2007. The 2007 Incentive Plan iswas designed to replace the terminated Option Plan and the terminated 2003 Stock Incentive Plan. Awards were made under the 2007 Incentive Plan in January 2008, February 2008, January 2009 and February 2009 consisting of restricted share units, transfer-restricted common shares and performance ~~shares~~share units. The restricted share units, ~~and~~ transfer-restricted common shares and performance share units are accounted for as equity instruments under Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004) “Share-Based Payment” ~~(“SFAS 123R”)~~. The applicable performance metrics for the performance share units ~~are~~awarded ~~recorded~~in February 2008 were based on a combination of annual return on equity on an operating basis and relative total shareholder return as compared to the BSX Bermuda Insurance Index. On October 21, 2008, the Compensation Committee approved a ~~liability~~new form of agreement pursuant to the 2007 Incentive Plan to be used in connection with awards of performance share units. For the performance share units awarded in February 2009, the Compensation Committee of the Board of Directors on February 17, 2009, approved the applicable performance metric, which is based on an average of the Company’s annual return on equity over their three-year performance cycle.

~~A summary of the status of the Company’s~~ Option ~~Plan~~plan ~~as of March 31, 2008 and 2007 and changes during the quarters then ended is presented in the tables and narrative below.~~

	Quarter ended March 31,
	2008			2007
	Number ofshares	Weightedaverageexerciseprice		Number ofshares	Weightedaverageexerciseprice
Outstanding, beginning of period	567,250	$	34.22	611,625	$	34.30
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Forfeited	13,750	$	32.19	—	$	—
Outstanding, end of period	553,500	$	34.27	611,625	$	34.30
Exercisable, end of period	443,500	$	34.64	379,750	$	34.16
Weighted average fair value of options granted (per share)		$	—		$	—

A summary of the status of outstanding awards under the Company’s Option Plan as of March 31, 2009 and 2008 and changes during the quarters then ended is presented in the tables and narrative below.

The total intrinsic value of stock options exercised was $nil for the quarters ended March 31, 2008 and 2007. The weighted average remaining contractual period as of March 31, 2008 was 6.1 years and 5.7 years for outstanding and exercisable options, respectively. The aggregate intrinsic value as of March 31, 2008 was $148 and $148 for outstanding and exercisable options, respectively.


	Quarter ended March 31,
	2009			2008
	Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
Outstanding, beginning of year	526,000	$	34.31	567,250	$	34.22
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Forfeited	4,000	$	22.81	13,750	$	32.19
Outstanding, end of quarter	522,000	$	34.40	553,500	$	34.27
Exercisable, end of quarter	427,000	$	34.68	443,500	$	34.64
Weighted average fair value of options granted (per share)		$	—		$	—

There were no options granted ~~during~~for the ~~quarters~~quarter ended March 31, ~~2008~~2009, and ~~2007 and,~~ as noted above, the Option Plan was terminated on February 20, 2007. The ~~fair~~weighted ~~value~~average remaining contractual period as of ~~options~~March 31, ~~are~~2009 ~~estimated~~was ~~using~~5.1 ~~the~~years ~~Black-Scholes~~and ~~option~~4.8 ~~pricing~~years ~~model,~~for ~~using~~outstanding anand ~~assumed~~exercisable ~~risk-free~~options ~~interest~~respectively. ~~rate;~~The anaggregate ~~expected~~intrinsic value as of ~~dividend~~March 31, ~~yield;~~2009 anwas ~~expected~~$106 ~~life;~~and an$106 ~~expected~~for ~~volatility;~~outstanding and aexercisable ~~forfeiture~~options, ~~rate~~respectively.

The assumed risk-free interest rate is the market yield on U.S. Treasury securities at 7-year constant maturity to match the expected life. The expected life is estimated based on a 4-year vesting period and a 10-year exercising period together with a review of actual exercising patterns. The expected dividend yield is calculated using the share price and the last dividend per share amount at the date of grant. The expected volatility was calculated using the Company’s own historic price volatility over the last 5.6 years. The forfeiture rate is obtained from the Company’s actual historic experience.


Range of exercise price	Outstanding at March 31, 2009	Weighted average remaining contractual period in years	Weighted average exercise price	Exercisable at March 31, 2009	Weighted average exercise price
$13-19	6,000	0.75	15.38	6,000	15.38
$19-25	6,000	1.75	21.00	6,000	21.00
$25-31	198,750	5.42	27.95	136,250	27.93
$31-37	62,500	3.75	31.54	62,500	31.54
$37-43	118,750	4.75	38.90	118,750	38.90
$43-49	130,000	5.75	43.03	97,500	43.03

Total	522,000			427,000

Range of exercise price	Outstanding atMarch 31,2008	Weightedaverageremainingcontractualperiod in years	Weightedaverageexerciseprice		Exercisable atMarch 31,2008	Weightedaverageexerciseprice
$13-19	6,000	1.75	$	15.38	6,000	$	15.38
$19-25	10,000	1.95	$	21.73	10,000	$	21.73
$25-31	216,250	6.52	$	27.95	141,250	$	27.93
$31-37	62,500	4.75	$	31.54	62,500	$	31.54
$37-43	118,750	5.75	$	38.90	118,750	$	38.90
$43-49	140,000	6.75	$	43.03	105,000	$	43.03
Total	553,500				443,500

As of March 31, 2008, there was $4,163 of total unrecognized compensation cost related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.79 years.

4.Restricted ~~NEW~~stock ~~ACCOUNTING~~units ~~PRONOUNCEMENTS:~~

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


	Restricted stock units outstanding				Weighted average grant-date fair value of restricted stock outstanding
	Future service required		No future service required ⁽²⁾		Future service required	No future service required ⁽²⁾
Outstanding, beginning of year	244,220		56,365		24.53	29.54
Granted ⁽¹⁾	84,661		—		24.26	—
Forfeited	—		—		—	—
Vested	(83,712	)	(20,610	)	31.00	30.41

Outstanding, end of quarter	245,169		35,755		22.23	29.04

⁽¹⁾	The weighted average grant-date fair value of restricted stock units granted for the quarter ended March 31, 2009 was $24.26 per unit (December 31, 2008: $23.84).

⁽²⁾	Because the 2003 Stock Incentive Plan provides that restricted stock units vest upon an individual’s retirement from the Company at age 55 or older, restricted stock units granted under the 2003 Stock Incentive Plan to individuals who are 55 or older are deemed not to require future service.

Transfer-restricted common shares

The following information summarizes the changes in transfer-restricted common shares for the quarter ended March 31, 2009:


	Transfer-restricted common shares	Weighted average grant date fair value
Outstanding, beginning of year	18,428	27.72
Granted	4,610	29.90

Outstanding, end of quarter	23,038	28.16

Performance share units

A summary of the status of the Company’s performance share units (“PSUs”) as of March 31, 2009 and changes during the quarter then ended is presented in the table and narrative below:


	Quarter ended March 31, 2009
	Number	Weighted average grant date fair value	Weighted average remaining contractual term
Outstanding, beginning of period	174,402	27.72	1.75
Granted	70,911	27.98	2.75
Forfeited	—	—	—

Outstanding, end of period	245,313	27.80	2.26

The PSUs awarded in 2007 and 2008 contain both a market and performance based component. The market component was defined as the relative total shareholder return as compared to the BSX Bermuda Insurance Index. The performance component of the PSUs awarded in 2007 and 2008 relates to the annual return on equity on an operating basis based on opening common shareholders’ equity. At inception of the three year cycle for the PSU awards, the Company estimated the fair value of the market and the performance based components of the PSUs granted under the 2007 Incentive Plan together with a forfeiture rate and recorded the compensation expense in its consolidated statements of income over the course of the performance period. The fair value estimate in respect of the market based component was set and earns over the requisite attribution period and is not adjusted unless the total shareholder return as compared to the BSX Bermuda Insurance Index falls below the 35th percentile minimum. The estimate in respect of the performance

component is reassessed at the end of each quarter as the Company’s financial results evolve and the Company reflects any adjustments in the consolidated statements of income in the period in which they are determined. The PSUs contain a lock-in provision at the end of each year within the three year cycle.

The 2009 PSUs contain only a performance based component. The performance component relates to the annual return on equity over a three year period, based on weighted average common shareholders’ equity. At inception of the three year cycle for these PSU awards, the Company estimates the fair value of the performance based components of the PSUs granted under the revised 2007 incentive plan together with a forfeiture rate and records the compensation expense in its consolidated statements of income over the course of such period. The estimate in respect of the performance component is reassessed at the end of each quarter as the Company’s financial results evolve and the Company reflects any adjustments in the consolidated statements of income in the period in which they are determined. The PSUs do not contain a lock-in provision and instead the average annual return on equity is calculated at the end of their three year cycle.

As of March 31, 2009, there was $10,319 of total unrecognized compensation cost related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.38 years.

4.	THE AMALGAMATION

The Amalgamation Agreement

On March 1, 2009, the Company, its wholly owned subsidiary IPC Limited and Max Capital Group Ltd. (“Max”) entered into the Agreement and Plan of Amalgamation, dated as of March 1, 2009 (as amended by the First Amendment to Agreement and Plan of Amalgamation, dated as of March 5, 2009, the “Amalgamation Agreement”), pursuant to which Max will amalgamate with IPC Limited (the “Amalgamation”). The closing of the Amalgamation is subject to customary closing conditions, including certain approvals by the Company’s and Max’s shareholders and receipt of certain insurance and other regulatory approvals. Immediately following the Amalgamation, the Company will change its name to “Max Capital Group Ltd.”

After the effective time of the Amalgamation, Max shareholders will have the right to receive 0.6429 common shares of the Company and cash in lieu of fractional shares in exchange for each Max common share they hold, unless they exercise appraisal rights under Bermuda law. The Company expects that it will issue approximately 36,440,847 common shares in connection with the Amalgamation. Pursuant to the Amalgamation Agreement the Company or Max may be required to pay a termination fee of $50,000 in certain circumstances. In connection with the services of J.P. Morgan Securities Inc. (“JPMorgan”) as financial advisor to the Board of Directors in connection with the Company’s strategic process and the Amalgamation, the Company agreed to pay JPMorgan an aggregate fee of $13,000, $3,700 of which has been paid as of March 31, 2009 and $9,300 of which is payable upon the occurrence of a significant business combination transaction.

In connection with the Amalgamation, the Company filed a preliminary registration statement/joint proxy statement with the SEC on March 27, 2009, and amendments thereto on April 13, 2009, and April 27, 2009. The Company expects to complete the Amalgamation in June 2009, subject to shareholder approval.

The Validus Offer

On March 31, 2009, the Company received an unsolicited offer from Validus Holdings, Ltd. (“Validus”) pursuant to which the Company would amalgamate with a wholly owned subsidiary of Validus and each of the Company’s common shares would be cancelled and converted into the right to receive 1.2037 Validus common shares. On April 7, 2009, the Company announced that its Board of Directors, after thorough consideration and consultation with management and its legal and financial advisors and upon consideration of a variety of factors, determined that Validus’s offer did not constitute a superior proposal under the terms of the Amalgamation Agreement, and reaffirmed its recommendation that the Company’s shareholders approve the Amalgamation with Max. On April 9, 2009 Validus announced that it had filed a preliminary proxy statement with the SEC for the solicitation of proxies in opposition to the Amalgamation with Max.

On April 28, 2009, Validus commenced a lawsuit in the Supreme Court of Bermuda Commercial Court (the “Court”) against the Company, IPC Limited and Max. The complaint alleges, among other things, that: (1) the $50,000 termination fee is unlawful and unenforceable, (2) the Company’s board of directors breached its duty and acted otherwise than in accordance with the constitution of the Company by entering into the amalgamation agreement with Max and (3) the Company’s board of directors continues to breach its duty by acting in accordance with the provisions in the amalgamation agreement with Max that provide for the termination fee and the restrictions on entering into discussions with third parties regarding acquisition proposals. Through the lawsuit, Validus is apparently seeking declaratory and injunctive relief to prevent the Company and IPC Limited from paying any portion of the $50,000 termination fee to Max and from taking any steps to give effect to the non-solicitation provisions in the amalgamation agreement. Additionally, Validus has requested the Court require the Company pay the costs of the proceedings in the Court as well as other unspecified relief. While at this time it is not possible to determine the ultimate resolution of, or estimate the liability related to, Validus’s lawsuit, based on its review of the complaint the Company believes that the allegations are without merit.

On April 30, 2009, Validus announced its intention to: (1) commence an exchange offer to the Company’s shareholders for all of the Company’s outstanding shares on the same economic terms as the offer that had been presented to the Company’s board of directors a month earlier and (2) as an alternative to the exchange offer, petition the Supreme Court of Bermuda to approve a “Scheme of Arrangement” under Bermuda law whereby Validus would acquire all the Company’s common shares on the same terms as its exchange offer. In its announcement, Validus indicated that the Scheme of Arrangement would need to be approved by a majority in number representing at least 75% in value of the Company’s shareholders present at a court-ordered meeting to approve the Scheme of Arrangement offer followed by sanction for the Scheme of Arrangement from the Court. Validus’s announcement further stated that, if the Scheme of Arrangement is approved at the court-ordered meeting and sanctioned by the Court, the Company’s shareholders can then call a second meeting to require the Company to approve the Scheme of Arrangement, and that, if approved by a majority of votes cast at the second meeting, the Scheme of Arrangement would become effective. On April 30, 2009, the Company’s board of directors met to discuss Validus’s announcement. At that meeting, the Company’s board of directors unanimously reaffirmed its belief that the acquisition proposal made by Validus does not represent a superior proposal and the Company’s board of directors continues to recommend that the Company’s shareholders vote in favor of the amalgamation with Max.

5.	NEW ACCOUNTING PRONOUNCEMENTS:

In June 2008, the FASB issued FASB Staff Position (“FSP”) No EITF 03-6-1 “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of FASB SFAS 128, Earnings per Share. This FSP shall be effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those years. The Company does not expect that the adoption of FSP EITF 03-6-1 will have a material impact on its financial statements.

In April 2009, the FASB issued FSP SFAS 141(R)-1 “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”. FSP SFAS 141(R)-1 amends and clarifies FASB SFAS 141 (revised 2007), “Business Combinations”, to address application issues raised by preparers, auditors, and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This FSP shall be effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of FSP SFAS 141(R)-1 has not affected the Company’s financial statements for the quarter ended March 31, 2009. The Company will evaluate the impact of FSP SFAS 141(R)-1 when or if a business combination or amalgamation occurs. The Company will account for the amalgamation described in note 4 above under the purchase method of accounting in accordance with SFAS 141(R), under which the total consideration paid in the amalgamation will be allocated among acquired assets and assumed liabilities based on the fair values of the assets acquired and liabilities assumed.

In April 2009, the FASB issued FSP SFAS 157-4 “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. FSP SFAS 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This FSP shall be effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Company expects that the adoption of FSP SFAS 157-4 will not have a material impact on its June 30, 2009 financial statements and subsequent financial statements.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1 “Interim Disclosures about Fair Value of Financial Instruments”. FSP SFAS 107-1 and APB 28-1 This FASB Staff Position (FSP) amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP shall be effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Company expects that the adoption of FSP SFAS 107-1 and APB 28-1 will lead to increased disclosures on its June 30, 2009 interim financial statements and subsequent interim financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of the results of operations and financial position of IPC Holdings, Ltd. References to the “Company” mean IPC Holdings and references to “we”, “~~our~~us”, “~~IPC~~our”, or “~~the Company~~IPC” mean IPC Holdings together with its direct and indirect wholly-owned subsidiaries, IPCRe Limited (“IPCRe”), IPC Limited, IPCRe Europe Limited (“IPCRe Europe”) and IPCRe Underwriting Services Limited (“IPCUSL”). This discussion should be read in conjunction with our Consolidated Financial Statements and related notes for the quarter ended March 31, ~~2008~~2009.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 to our audited financial statements for the fiscal year ended December 31, ~~2007~~2008, included in our Annual Report on Form 10-K filed with the SEC on February 2227, ~~2008~~2009. The following is a summary of the accounting policies for the three main components of our consolidated balance sheet and consolidated statements of income: premiums, losses (claims), including reserves, and investments / investment income.

Premiums

Premiums are recorded as written at the beginning of each policy, based upon information received from ceding companies and their brokers, and are earned on a pro rata basis over the policy period. For excess of loss contracts, the amount of deposit premium is contractually documented at inception, and management uses this as its best estimate for accounting for these premiums. Premiums may be adjusted upwards or downwards as a result of changes in the cedant’s actual exposure base and the original estimates thereof, although most contracts do provide for a minimum premium in the contract terms. We refer to such changes in premiums as adjustment premiums. For proportional treaties, the amount of premium is normally estimated atby management at inception ~~using~~based ~~data~~on ~~provided~~information byfrom the ceding company. We account for such premium using ~~our~~ initial estimates, which are reviewed regularly for reasonableness by management with respect to the actual premium reported by the ceding company. At March 31, ~~2008~~2009 the amount of premium accrued resulting from management’s estimates for proportional treaties was 7approximately 18.78% of total gross premiums written for the quarter then ended. Reinstatement premiums are recognized and accrued at the time we incur a loss and where coverage of the original contract is reinstated under pre-defined contract terms, and are earned pro rata over the reinstated coverage period. Such accruals are based upon actual contractual terms (including the associated rates on line— – i.e. price) applied to the amount of loss reserves expected to be paid, and the only element of management judgement involved is with respect to the amount of loss reserves as described below. The ~~amount~~ asset accrued at March 31, ~~2008~~2009 for estimated reinstatement premiums on Reported But Not Enough ~~loss~~losses ~~reserves~~ (“RBNE”) and Incurred But Not Reported (“IBNR”) loss reserves, ~~as described below,~~ was $1220.72 million.

Loss Reserves

Under accounting principles generally accepted in the United States of America, we are not permitted to establish loss reserves until the occurrence of an event that may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date are established, with no allowance for the provision of a contingency reserve to account for expected future losses. Claims arising from future catastrophic events can be expected to require the establishment of substantial reserves from time to time.

Estimating appropriate loss reserves for catastrophes is an inherently uncertain process. Loss reserves represent our estimates, at a given point in time, of ultimate settlement and administration costs of losses incurred (including IBNR and RBNE reserves). We regularly review and update these estimates, using the most current information available to us. Consequently, the ultimate liability for a catastrophic loss is likely to differ from the original estimate. Whenever we determine that any existing loss reserves are inadequate, we are required to increase the loss reserves with a corresponding reduction, which could be material, in our operating results in the period in which the deficiency is identified. The establishment of new reserves, or the adjustment of reserves for reported claims, could result in significant upward or downward changes to our financial condition or results of operations in any particular period.

For proportional treaties, we generally use an initial estimated loss and loss expense ratio (the ratio of losses and loss adjustment expenses incurred to premiums earned) based upon information provided by the ceding company and/or their broker and our historical experience of that treaty, if any, and the estimate is adjusted as actual experience becomes known.

When a catastrophic event occurs, we first determine which treaties may be affected using our geographic database of exposures. We then contact the respective brokers and ceding companies involved with those treaties, to determine their estimate of involvement and the extent to which the reinsurance program is affected. We may also use computer ~~modeling~~modelling to measure and estimate loss exposure under the actual event scenario, if available. For excess of loss business, which is generally over 90% of the ~~premiums~~premium we write, we are aided by the fact that each treaty has a defined limit of liability arising from one event. Once that limit has been reached, we have no further exposure to additional losses from that treaty for the same event.

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We establish reserves based upon estimates of losses incurred by the ceding companies, including reserves where we believe that the ultimate loss amount is greater than that reported to us by the ceding company. These reserves, which provide for development on reported losses, are also known as RBNE reserves. We also establish reserves for losses incurred as a result of an event known but not reported to us. These IBNR reserves, together with RBNE reserves, are established for both catastrophe and other losses. To estimate the portion of losses and loss adjustment expenses relating to these claims for the year, we review our portfolio of business to determine where the potential for loss may exist. Industry loss data, as well as actual experience, knowledge of the business written by us and general market trends in the reinsurance industry, are considered. Since 1993, we have contracted AIR Worldwide Corporation for the use of their proprietary models—currently CATRADER®—as part of our ~~modeling~~modelling approach. These computer-based loss ~~modeling~~modelling systems utilize A.M. Best’s data and direct exposure information obtained from our clients. We may also use CATRADER ® to measure and estimate loss exposure under the actual event scenario, if available. The sum of the individual estimates derived from the above methodology provides us with an overall estimate of the loss reserves for IPC as a whole. Our reserving methodology uses a process that calculates a point estimate, as opposed to a methodology that develops a range of estimates.

As a broker market reinsurer, we are reliant on loss information reported to brokers by primary insurers who must estimate their own losses at the policy level. These estimates are sometimes derived from the output of computer-based modelling systems, and often based upon incomplete and changing information, especially during the period immediately following a catastrophic event. The information we receive varies by cedant and broker and may include paid losses and estimated case reserves. We may also receive an estimated provision for IBNR reserves, especially when the cedant is providing data in support of a request for collateral for reserves ceded. Information can be received on a monthly, quarterly or transactional basis. As a reinsurer, our reserve estimates may be inherently less reliable than the reserve estimates of our primary insurer cedants.

There is a time lag inherent in reporting from the original claimant to the primary insurer to the broker and then to the reinsurer. Reporting of property claims arising from catastrophes in general tends to be prompt (as compared to reporting of claims for casualty or other “long-~~term~~tail” lines of business). However, the timing of claims reporting can vary depending on various factors, including: the nature of the event (e.g. hurricane, earthquake, hail, man-made events such as terrorism or rioting); the geographic area involved; the quality of the cedant’s claims management and reserving practices; and whether the claims arise under reinsurance contracts for primary companies, or reinsurance of other reinsurance companies (i.e. retrocession). Because the events from which claims arise are typically prominent, public occurrences, we are often able to use independent reports of such events to augment our loss reserve estimation process. Because of the degree of reliance that we place on ceding companies for claims reporting, the associated time lag, the low frequency/high severity nature of the business we underwrite and the varying reserving practices among ceding companies, our reserve estimates are highly dependent on management judgement and are therefore subject to significant variability. During the loss settlement period, additional facts regarding individual claims and trends may become known, and current laws and case law may change~~, which further increases the variability of our reserves~~.

IPC’s controls in place require that claim payments and reserves must be authorized by an underwriter upon processing. Large claims must also be approved by senior management prior to a claims payment being made. While we have the right to audit client data, most of our claims result from events that are well known such as hurricanes or earthquakes,; ~~and in assessing the reasonableness of reported claims,~~ our claims processors and underwriters ask follow-up questions as necessary. Since 2007, we also undertake a verification process of the completeness of our loss reserves, including the circularization of a number of our brokers. We also cross reference and verify amounts requested as collateral by ceding companies, in comparison to amounts previously reported to us.

For certain catastrophic events, there is ~~great~~greater uncertainty underlying the assumptions and associated estimated reserves for losses and loss adjustment expenses reported by our cedants. Complexity resulting from problems such as policy coverage issues, multiple events affecting one geographic area and the resulting impact on claims adjusting (including allocation of claims to event and the effect of demand surge on the cost of building materials and labour) by, and communications from, ceding companies, can cause greater uncertainty in the reserve estimates reported to us by our cedants, as well as delays to the timing with which we are notified of cedants’ changes to their loss estimates, resulting in greater uncertainty in our reserve estimates. For example, the initial estimate for hurricane ~~Katrina~~Ike ~~had been~~was based on estimates by cedants of their exposure, industry insured loss estimates, output from both industry and proprietary models, a review of contracts potentially affected by the events, information received from both clients and brokers, and management judgement, which includes consideration of the physical factors noted above, in aggregate. It has been assumed that underlying policy terms and conditions are upheld during our clients’ loss adjustment process. However, the unique circumstances and severity of this devastating catastrophe, including the extent of flooding and resultant initial limited access by claims adjusters, introduce additional uncertainty to the normally difficult process of estimating catastrophe losses, which is compounded by the potential for legal and regulatory issues arising regarding the scope of coverage.

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To illustrate the potential variability of estimates for gross individual catastrophe losses, the ~~following~~ following table outlines the percent changes from IPC’s first reported estimates for certain specific catastrophes, over specified time horizons:

	Percentage increase of development from initial report
	After 6months		After 1year		After 2years		After 3years		Latest /Final %		Total Development –initial report to latest$ (000)
Cyclones Lothar / Martin	61	%	66	%	71	%	73	%	69	%	24,100
Cyclones Lothar/Martin	61	%	66	%	71	%	73	%	69	%	24,100
Cat # 48 (WTC)	6	%	7	%	9	%	9	%	4	%	4,500
2004 Florida hurricanes	113	%	137	%	145	%	144	%	145	%	118,~~500~~250
Hurricane Katrina	1.5	%	1.6	%	-0.4	%	-2.0	%	-01.64	%	(511,000	)
UK floods (June 2007)	-38	%	-43	%					-50	%	(31,600	)

Generally, the most significant development arises within six to nine months of an event, due to the limited amount of information usually available immediately after the event.

Cyclones Lothar and Martin struck France and other parts of Europe in the last week of 1999. As such, many parts of the affected areas were still devastated, inaccessible and without power at the time we were attempting to establish reserves for 1999 year-end reporting. In many cases, our French cedants were unable to provide us with much information regarding their potential claims, and we relied more heavily on industry loss estimates, which themselves were based on very limited information. Consequently, there was significant development of our own loss, as well as for the reported industry loss. As an example, the reported industry loss for cyclone Martin increased 150% from the original estimate.

Similarly, for the four hurricanes that struck Florida over a six-week period concluding in late September 2004, not only was the initial estimation process made difficult by the proximity to the end of the third quarter 2004 reporting period, there were the added complexities of multiple events affecting one geographic area and the resulting impact on claims adjusting (as noted above) by, and communications from, ceding companies.

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

Particularly for extreme events such as the attack on the World Trade Center and hurricane Katrina, many excess of loss contracts that are impacted by the event incur full limit losses, on which there can be no adverse development. However, because of the uncertainties associated with hurricane Katrina noted above, there can be no assurance that significant development will not occur on contracts where the limits have not been exhausted, or that losses will not be reported for contracts for which we have not previously established a reserve. Generally, the size of a catastrophe is not necessarily an indicator of the amount of potential development that might occur. However, for larger catastrophes, a small percentage of development can result in a larger dollar impact on a company’s results of operations, than a larger percentage development on a smaller event.

As noted above, our methodology provides us with an overall estimate of loss reserves for IPC as a whole. For information on historical development of IPC’s overall loss reserves, please refer to the tables provided in Item 1, Business, Reserve for Losses and Loss Adjustment Expenses, in our Report on Form 10-K for the year ended December 31, ~~2007~~2008.

At March 31, ~~2008~~2009 management’s estimates for IBNR/RBNE represented 4552% of total loss reserves. The majority of the estimate relates to reserves ~~for~~ ~~claims~~ from ~~hurricane~~winter ~~Katrina~~storm Klaus that affected ~~various~~southern ~~parts~~France ofin January ~~Gulf~~2009, ~~coast~~reserves ~~states~~from the bushfires in ~~August~~south ~~2005~~eastern Australia in January 2009, ~~the~~reserves ~~storm~~for ~~and~~claims ~~flooding~~from hurricane Ike that affected various parts of ~~New~~Gulf ~~South~~coast ~~Wales,~~states ~~Australia~~ in ~~early~~September ~~June~~2008 ~~2007,~~ and ~~the~~reserves ~~flooding~~for ~~events~~claims from hurricane Katrina and Wilma that affected various parts of ~~the~~ ~~United~~Gulf ~~Kingdom~~coast states in ~~June and July 2007~~2005. AsGiven ~~discussed~~the ~~above,~~magnitude ~~our~~and ~~reserve~~recent ~~estimates~~occurrence ~~are~~of ~~not~~hurricane ~~mathematically~~Ike, ordelays ~~formulaically~~in ~~derived~~receiving ~~from~~claims ~~factors~~data, ~~such~~the ascontingent ~~numbers~~nature of ~~claims~~business orinterruption ~~demand~~and ~~surge~~other ~~impact.~~exposures, Ifand ~~our~~other ~~estimate~~uncertainties inherent ofin ~~IBNR/RBNE~~ loss ~~reserves at March 31~~estimation, ~~2008~~meaningful ~~was~~imprecision ~~inaccurate~~remains byregarding athe ~~factor~~estimated oflosses ~~10%,~~from ~~our~~this ~~results~~event. ofOur ~~operations~~initial ~~would~~assessment beof ~~impacted~~losses byis abased ~~positive~~on ora ~~negative~~combination ~~movement~~ of ~~$15.9~~our ~~million.~~analysis Ifand review of our ~~total~~share ~~reserve~~of ~~for~~estimated ~~losses~~total atindustry ~~March 31~~loss, ~~2008~~in-force contracts, ~~was~~the ~~inaccurate~~output byof acatastrophe ~~factor~~modeling ofand ~~10%,~~a ~~our incurred~~limited ~~losses~~number ~~would~~of beloss ~~impacted~~advices byfrom ~~$35~~clients.5 ~~million,~~As ~~which~~discussed ~~represents~~above, ~~1.7%~~our ofreserve ~~shareholders’~~estimates ~~equity~~are atnot ~~March 31,~~mathematically ~~2008.~~or Informulaically ~~accordance~~derived ~~with~~from ~~IPCRe’s~~factors ~~registration~~such ~~under~~as ~~the~~numbers ~~Bermuda~~of ~~Insurance~~claims ~~Act~~or ~~1978~~demand ~~and~~surge ~~Related~~impact. If ~~Regulations~~our ~~(the “Insurance~~estimate ~~Act”),~~of ~~our~~IBNR/RBNE loss reserves ~~are~~at ~~certified~~March 31, ~~annually~~2009 was inaccurate by ana ~~independent~~factor ~~loss~~of ~~reserve~~10%, ~~specialist.~~our results of operations would be impacted

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by a positive or negative movement of $18.4 million. If our total reserve for losses at March 31, 2009 was inaccurate by a factor of 10%, our incurred losses would be impacted by $35.4 million, which represents 1.9% of shareholders’ equity at March 31, 2009. In accordance with IPCRe’s registration under the Bermuda Insurance Act 1978 and Related Regulations (the “Insurance Act”), our loss reserves are certified annually by an independent loss reserve specialist.

Investments

InInvestments ~~accordance~~are with our investment guidelines, our investments consist of high-grade marketable fixed maturity investments and certain equity investments in mutual funds. Prior to January 1, 2007, investments were considered “Available for Sale” and were carried at fair value. ~~Following~~The ~~the~~fair ~~issuance~~values byfor ~~the~~all ~~FASB~~investments ofare ~~Statement~~sourced offrom ~~Financial~~third ~~Accounting Standards No~~parties. ~~159~~ ~~“The~~In ~~Fair~~accordance ~~Value~~with ~~Option~~our ~~for~~investment ~~Financial Assets and Financial Liabilities”~~guidelines, ~~(“SFAS~~our ~~159”),~~investments weconsist ~~elected~~of tohigh-grade ~~early~~marketable ~~adopt the fair value option for all~~ fixed maturity ~~and equity~~ investments ~~commencing January 1~~, ~~2007~~including U.S. ~~This~~Government ~~adoption~~treasuries ~~requires~~and ~~the~~mortgage-backed ~~investments~~securities toissued ~~now~~by beU.S. ~~reported~~Government assponsored ~~“Trading”~~entities, ~~under~~certain ~~SFAS~~equity ~~115 and~~investments ~~also~~in ~~requires~~mutual ~~the~~funds ~~Company~~and toan investment ~~adopt~~in ~~Statement~~a fund of ~~Financial~~hedge ~~Accounting Standards No~~funds. ~~157,~~ ~~“Fair Value Measurements” (“SFAS 157”) regarding fair value measurements.~~

~~This~~Investment ~~adoption~~transactions ~~does~~are ~~not~~recorded ~~amend~~on ~~the carrying value of our fixed maturity and equity investments as they continue to be carried at fair value. As~~ a ~~result~~trade ~~of the~~date adoption, all unrealized gains and losses in our investment portfolio were reclassified from accumulated other comprehensive income within shareholders’ equity on our consolidated balance sheets to retained earnings as of January 1, 2007basis. This cumulative-effect adjustment reclassifying unrealized gains and losses was $128.0 million, which represented the difference between the cost or amortized cost of our investments and the fair value of those investments at December 31, 2006.

With the investments ~~now~~ being classified as “Trading” all subsequent changes to the fair value of our investment portfolio are recorded as net ~~gains~~ (losses) gains on investments in our consolidated statements of income ~~(loss) whereas prior to January 1, 2007, unrealized gains and losses were included within accumulated other comprehensive income as a separate component of shareholders’ equity~~.

~~SFAS~~Realized ~~157~~gains ~~established a hierarchy for inputs in measuring fair value that maximizes the use of observable inputs~~ and ~~minimizes~~losses ~~the~~on ~~use~~sales of ~~unobservable~~investments ~~inputs~~continue byto ~~requiring~~be determined ~~that~~on ~~the~~a ~~observable~~first-in, ~~inputs~~first-out ~~are used when available~~basis. ~~Observable~~Net ~~inputs~~investment ~~are~~income ~~inputs~~includes ~~that~~interest ~~market~~income ~~participants would use in pricing the asset based~~ on ~~market~~fixed ~~data~~maturity ~~obtained~~investments, ~~from sources~~recorded ~~independent~~when ofearned, ~~the~~dividend ~~Company.~~income ~~Unobservable~~on ~~inputs~~equity ~~would~~investments, berecorded ~~inputs~~when ~~that~~declared, ~~reflect~~and the ~~Company’s~~amortization ~~assumptions~~of ~~about~~premiums ~~the~~and discounts ~~assumptions that market participants would use in pricing the asset based~~ on ~~the best information available in the circumstances~~investments. ~~The hierarchy is broken down into three levels based on the reliability of inputs as follows:~~

~~Level~~Prices ~~1—Valuations~~reported ~~based on~~to ~~quoted~~us ~~prices~~by inour ~~active~~investment ~~markets~~managers, ~~for~~as ~~identical~~provided ~~assets~~by orindependent ~~liabilities~~pricing ~~that~~services (“pricing services”) form the ~~Company~~basis ~~has~~of the ~~ability~~fair tovalue ~~access~~of fixed maturity investments. ~~Since~~The ~~valuations~~market makers are ~~based~~the primary pricing source used by our investment managers although the ultimate valuations also rely on ~~quoted~~other ~~prices~~data inputs and models. Both market-makers and the alternative pricing services’ valuation models rely on a variety of observable inputs to calculate a fixed maturity investment’s fair value. Observable inputs that ~~are~~may ~~readily~~be used include the following: benchmark yields (Treasury and ~~regularly~~swaps ~~available~~curves), intransactional andata ~~active~~for ~~market~~new issuance, ~~valuation~~broker ofquotes, ~~these~~cash flows, recent issuance, supply, sector and issuer level spreads, credit ratings, maturity, weighted average life, capital structure, corporate actions, underlying ~~instruments~~collateral, ~~does~~loan ~~not~~performance, ~~entail~~comparative abond ~~significant~~analysis ~~degree~~and ofthird-party ~~judgment~~pricing sources. In order to monitor the quality of the prices, the pricing services and the investment managers perform data integrity checks and quality management processes.

It is ultimately management’s responsibility to determine whether the values received and recorded in the financial statements are representative of appropriate fair value measurements. In respect of our fixed maturity investments, we periodically assess valuation relative to current financial market conditions. We also consider any valuation disparities between the custodian and investment managers and supplement this with our own independent verification to external pricing sources. In addition to this the Company’s custodian, on behalf of the Company, performs validation checks on the prices used to ensure no missing or stale pricing and to ensure that the price derived from the pricing source compares reasonably with its peer pricing services. Any material differences are investigated and resolved. As of March 31, 2009 100% of our fixed maturity investments were valued using pricing services. There have been no adjustments to the prices obtained from the pricing services. Our valuation procedures also consider the credit quality composition of the portfolio and any significant migrations in the credit quality of our holdings from period to period.

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

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

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

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

~~The~~It ~~following~~may be ~~table~~possible ~~shows~~that ~~how~~the ~~our~~use ~~investments~~of ~~are~~different ~~categorized~~pricing methodologies and assumptions may have a material effect on the estimated fair value amounts. During periods of market disruption including periods of significantly rising or falling interest rates, rapidly

	Fair Value Measurement at March 31, 2008 using:
Description	Fair ValueMeasurements atMarch 31, 2008($ in thousands)	Quoted Prices inActive Markets(Level 1)($ in thousands)	SignificantOther ObservableInputs (Level 2)($ in thousands)
Fixed maturity investments	1,875,812	—	1,875,812
Equity investments	471,090	—	471,090

Fixed maturity investments are stated at fair value as determined by the broker-quoted market price of these securities and as provided either by independent pricing services or, when such prices are not available, by reference to broker or underwriter bid indications. Although we believe that many of these securities could be classified as quoted on active markets they are not quoted on a public exchange and therefore we are classifying them as Level 2.

Equity investments in mutual funds are stated at fair value as determined by the most recently advised net asset value as advised by the fund. Three funds have daily reported net asset values—with the funds’ holdings predominantly in publicly quoted securities—and one fund has a monthly reported net asset value—where the fund’s holdings can be in various

publicly quoted and unquoted investments with observable inputs. Due to the funds’ values being net asset values, with no significant lock ups, and not publicly quoted prices, we are classifying them as Level 2.

Realized gains and losses on sales of investments continue to be determined on a first-in, first-out basis. Net investment income includes interest income on fixed maturity investments, recorded when earned, dividend income on equity investments, recorded when declared, and the amortization of premiums and discounts on investments.

At March 31, 2008 we did not hold any fixed maturity securities that were not investment grade or not rated.

RESULTS OF OPERATIONS, QUARTERS ENDED MARCH 31, 2008 AND 2007

Our net income for the quarter ended March 31, 2008 was $86.8 million, compared to $77.2 million for the quarter ended March 31, 2007. The primary reason for the increase in net income is the decrease in incurred losses from $53.0 million in the first quarter of 2007 to $5.3 million in the first quarter of 2008. Net incurred losses in the first quarter of 2007 included $50.0 million with respect to windstorm Kyrill, which swept across northern Europe in late January 2007. The decrease in net incurred losses was offset by reduced earned premiums in the first quarter of 2008 compared to the first quarter of 2007, decreased investment income and an increase in net losses from investments, details of which are discussed below.

In the quarter ended March 31, 2008, we wrote gross premiums of $197.9 million, compared to $236.2 million in the first quarter of 2007. We wrote premiums in respect of new business totaling $22.6 million, but premiums from existing business were $38.9 million less in the first quarter of 2008 in comparison to the first quarter of 2007, mostly due to program re-structuring, including increases in client retentions, and to a lesser extent pricing. Business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled $16.6 million. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants’ actual exposure base and the original estimates thereof, were $1.7 million less in the first quarter of 2008 in comparison to the first quarter of 2007. There was a $3.8 million reduction in reinstatement premiums in the first quarter of 2008 compared to the first quarter of 2007, primarily due to the lower level of incurred losses in the current period.

In the quarter ended March 31, 2008, we ceded $2.0 million of premiums to our retrocessional facilities, compared with $7.7 million in the first quarter of 2007. The actual contracts ceded are at IPC’s underwriters’ judgement in optimizing the risk profile of the portfolio, which can cause premiums ceded to vary as a proportion of our gross writings from quarter to quarter. In addition, our Property Catastrophe Excess of Loss retrocessional facility was not renewed and there was less participation by retrocessionnaires in our proportional reinsurance facility.

Net premiums earned in the quarter ended March 31, 2008 were $89.7 million, compared to $104.7 million in the first quarter of 2007. This reduction is primarily due to the reduction in written premiums, both in the quarter and during the past twelve months, as well as the reduction in reinstatement premiums.

Net investment income was $23.9 million in the quarter ended March 31, 2008, compared to $33.1 million in the first quarter of 2007. In the first quarter of 2008 we did not receive any dividends from our investment in a fund of hedge funds, whereas in the first quarter of 2007, we received dividends of $7.9 million from this investment. The overall yield from the fixed income portfolio has fallen by approximately 20 basis points, during the first quarter of 2008 compared to the first quarter of 2007.

We recognized a net loss of $6.0 million from investments in the quarter ended March 31, 2008, compared to a net gain of $8.7 million in the first quarter of 2007. The unrealized depreciation included in the net loss on investments was $47.1 million. As discussed above, effective January 1, 2007, we early-adopted SFAS 159, the Fair Value Option for Financial Assets and Financial Liabilities, with respect to our investment portfolio. As a result all changes to the fair value of our investment portfolio are recorded as net gains (losses) on investments in our consolidated statements of income. Net gains from fixed maturity securities were $35.7 million which was more than offset by $41.7 million of net losses from our equity investments.

In the quarter ended March 31, 2008, we incurred net losses and loss adjustment expenses of $5.3 million, compared to $53.0 million in the first quarter of 2007. Net incurred losses in the first quarter of 2008 included $14.5 million from events in 2008, primarily the Alon Refinery explosion in Texas, a storm that affected Queensland, Australia, and windstorm Emma that affected parts of Europe. This was offset in part by reductions to our estimates of ultimate losses for several events in 2007 totaling $9.7 million. Other losses included net movements from other prior year events and approximately $1.2 million attritional losses from proportional treaties, mostly resulting from the recent failure of several satellites. In the first quarter of 2007, our incurred losses included a $50.0 million reserve established for windstorm Kyrill.

Net acquisition costs incurred, which consist primarily of commissions and brokerage fees paid to intermediaries for the production of business, were $8.7 million for the quarter ended March 31, 2008, compared to $10.1 million in the first quarter of 2007. These costs have decreased in proportion to the decrease in earned premiums in 2008. General and administrative expenses were $7.1 million in the quarter ended March 31, 2008, compared to $7.2 million in the corresponding period of 2007.

~~LIQUIDITY~~ widening ~~AND~~credit ~~CAPITAL~~spreads ~~RESOURCES~~or illiquidity, it may be difficult to value certain of the Company’s fixed maturity investments if trading becomes infrequent, or market data becomes less available or there is a decrease in observable inputs. In such cases, more fixed maturity investment valuations would require the use of management judgement. As such, valuations may include inputs and assumptions that are unobservable or require greater estimation as well as valuation methods which are more sophisticated or require greater estimation thereby resulting in values which may be less than the value at which the investments may be ultimately sold. Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported within the Company’s consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on the Company’s results of operations and financial condition. As at March 31, 2009, we did not have any significant fixed maturity investments that were not rated and all of our fixed maturity investments were classified as Level 1 or Level 2.

~~IPC~~The ~~Holdings~~following istable ashows ~~holding~~how ~~company~~our ~~that~~investments ~~conducts no reinsurance operations of its own. Its cash flows~~ are ~~limited to distributions from IPCRe and IPCUSL by way of loans or dividends. Under the Insurance Act, IPCRe is~~ ~~required~~categorised tounder ~~maintain~~SFAS a157 solvency margin and a minimum liquidity ratio, and is prohibited from declaring or paying dividends if to do so would cause IPCRe to fail to meet its solvency margin and its minimum liquidity ratio. Under the Insurance Act, IPCRe is prohibited from paying dividends of more than 25% of its total statutory capital and surplus at the end of the previous fiscal year unless it files an affidavit stating that the declaration of such dividends has not caused IPCRe to fail to meet its solvency margin and minimum liquidity ratio. The Insurance Act also prohibits IPCRe from declaring or paying any dividend without the approval of the Supervisor of Insurance of Bermuda if IPCRe failed to meet its solvency margin and minimum liquidity ratio on the last day of the previous fiscal year. In addition, IPCRe is prohibited under the Insurance Act from reducing its opening total statutory capital by more than 15% without the approval of the Authority. The maximum dividend payable by IPCRe in accordance with the foregoing restrictions as of March 31, ~~2008~~2009: ~~was $545.0 million.~~

IPCRe’s sources of funds consist of premiums written, investment income, paid losses recovered from retrocessionaires and proceeds from sales and redemptions of investments. Cash is used primarily to pay losses and loss adjustment expenses, premiums retroceded, brokerage commissions, excise taxes, general and administrative expenses, repurchase of shares and dividends. To date, we have invested all cash flows not required for operating purposes or returned amounts to shareholders via the repurchase of shares and the payment of dividends. The potential for a large catastrophe means that unpredictable and substantial payments may need to be made within relatively short periods of time. Hence, future cash flows cannot be predicted with any certainty and may vary significantly between periods.


Description	Fair Value Measurement March 31, 2009	Quoted Prices in Active Market (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Fixed maturity investments
U.S. Government Treasuries	5,466	5,466	—	—
Other fixed maturity investments	1,767,339	—	1,767,339	—

Total fixed maturity investments	1,772,805	5,466	1,767,339	—

Equity investments
Mutual funds	177,986	—	177,986	—
Other equity investments	8,666	—	8,666	—
AIG Select Hedge Fund	108,439	—	—	108,439

Total equity investments	295,091	—	186,652	108,439

Total investments	2,067,896	5,466	1,953,991	108,439

~~Net~~Included ~~cash~~within ~~inflows~~the ~~from~~category ~~operating~~fixed ~~activities~~maturity investments are bonds issued by the U.S. Treasury. We believe that the market for U.S. Government Treasury securities is an actively traded market given the high level of trading volume and the auction process and therefore we are classifying them as Level 1. For our remaining fixed maturity investments, which trade in less active markets, but continue to be valued using observable inputs, we are classifying them as Level 2. Also included within the category fixed maturity investments is our mortgage-backed securities portfolio. As part of the mortgage-backed securities portfolio, our investment guidelines permit participating in to-be-announced securities (“TBAs”). During the quarter ended March 31, ~~2008~~2009 ~~were~~we ~~$74~~participated in TBAs.8 ~~million~~Mortgage-backed securities are ~~compared~~typically traded on a to-be-announced ~~$66~~basis.6 ~~million~~By inacquiring a TBA, the ~~corresponding~~Company ~~period~~makes a commitment to purchase a future issuance of ~~2007~~mortgage-backed securities. ~~The~~In ~~increase~~addition, isthe ~~primarily~~portfolio may offset these purchases by taking positions in short TBAs (i.e. the ~~result~~Company makes a commitment to sell a future issuance of ~~the~~mortgage-backed ~~increase~~securities) inbut no net ~~income~~short ~~during~~TBA positions are allowed. Also as part of the ~~period~~mortgage-backed securities portfolio, the investment guidelines allow the Company to enter into long and short TBA positions, which ~~was~~are ~~$86~~deliverable within a month.8 ~~million~~For the period between purchase of the TBA and issuance of the underlying security, the Company’s positions are accounted for as regular-way security trades in the consolidated ~~quarter~~financial ~~ended~~statements where delivery is taken. Where delivery is not taken, the Company’s position is accounted for as a derivative in the consolidated financial statements. As at March 31, ~~2008~~2009, ~~compared~~the toCompany ~~$77~~had long TBAs.2 Collateral ~~million~~is received or posted daily between the Company and the counterparty for the daily net gain (loss). TBAs are recorded in the ~~corresponding~~ ~~period~~consolidated offinancial ~~2007~~statements at fair value.

~~Net~~Included ~~cash~~within ~~inflows from investing activities in~~ the ~~quarter~~category ~~ended~~equity ~~March 31,~~investments ~~2008~~are ~~were~~mutual ~~$81~~funds.1 ~~million compared~~These tofunds ~~net~~are ~~cash~~stated ~~outflows~~at offair ~~$58.7~~value ~~million~~as indetermined by the ~~corresponding~~most ~~period~~recently ofreported ~~2007.~~net asset ~~Net~~value ~~cash~~as ~~outflows~~advised ~~from~~by ~~financing activities in~~ the ~~quarter ended March 31, 2008 were $66~~funds.4 ~~million~~These ~~compared~~funds tohave ~~$17.0~~daily ~~million~~reported innet ~~the~~asset ~~corresponding~~values ~~period~~(“NAV”) ~~of 2007,~~– aswith ~~a result of~~ the ~~Company~~funds’s ~~repurchase~~holdings ofpredominantly ~~$49.5~~in ~~million~~publicly ofquoted ~~its~~securities. ~~common~~Due ~~shares~~to inthe ~~March~~funds’ ~~2008~~values ~~and~~being ~~payment~~current ofNAVs, ~~dividends.~~with ~~Cash~~no significant ~~and~~lock ~~cash~~ups, ~~equivalents~~no ~~increased~~delays byin ~~$89.5~~withdrawal ~~million~~and innot ~~the~~publicly ~~quarter~~quoted ~~ended March 31~~prices, ~~2008,~~we ~~resulting~~are inclassifying athe ~~balance~~other ~~of $129.0~~equity ~~million~~investments atas ~~March 31,~~Level ~~2008~~2.

~~With~~Also ~~the~~included ~~exception~~within ofthe ~~cash~~category ~~holdings,~~equity ~~our~~investments ~~funds~~ are ~~primarily~~other ~~invested~~equity ~~in fixed maturity securities~~investments, ~~the~~ ~~fair value of~~ which isrepresent ~~subject to fluctuation depending on changes in prevailing interest rates and individual issuer credit ratings, and investments in mutual funds, being three~~ equity~~-type~~ ~~funds~~securities and afixed ~~fund~~maturities ofheld ~~hedge funds. Our investment portfolio does not currently include direct investments~~ in ~~options,~~rabbi ~~warrants,~~trusts ~~swaps,~~maintained ~~collars~~by orthe ~~similar~~Company ~~derivative~~for ~~instruments,~~deferred ~~although~~compensation ~~such~~plans ~~instruments~~and ~~may~~are ~~be included~~ classified within the ~~underlying~~valuation ~~investments~~hierarchy ofas ~~our~~Level ~~fund of hedge funds. Our investment policy guidelines provide that financial futures and options and foreign exchange contracts may not be used in a speculative manner~~2, ~~but~~on ~~may~~the besame ~~used,~~basis ~~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. As the~~ Company’s ~~does~~other ~~not~~equity ~~directly invest in asset-backed or mortgage-backed~~ securities, weand ~~believe~~fixed ~~that there is insignificant exposure to subprime mortgages~~maturities.

AtAlso included ~~March 31,~~within ~~2008,~~the ~~60%~~category ofequity ~~IPC’s~~investments ~~fixed~~is ~~maturity~~a ~~investment~~fund ~~portfolio~~of ~~(based~~hedge onfunds. ~~fair~~It ~~value)~~has ~~was~~a ~~held~~monthly ~~in securities~~reported ~~rated~~net ~~AAA,~~asset ~~and~~value ~~24%~~with ~~was~~a ~~held~~one-month delay in ~~securities~~its ~~rated AA~~valuation. AtAs ~~December 31~~a result, ~~2007~~ the ~~proportions~~most ofrecently ~~securities~~advised soNAV ~~rated~~included ~~were~~in ~~59%~~our ~~and~~financial ~~24%,~~statements ~~respectively.~~at ~~At March 31, 2008~~ the ~~average~~end of ~~modified~~each ~~duration~~quarter ofhas ~~IPC’s~~historically ~~fixed~~been ~~maturity portfolio~~based ~~was~~upon ~~3.4~~the ~~years,~~NAVs ~~compared~~of tothe ~~3.5~~underlying ~~years~~funds at ~~December 31,~~the ~~2007.~~end ~~We believe that because~~ of the ~~relatively~~preceding ~~short~~month. ~~duration~~However, ~~and~~since ~~high~~the ~~quality~~third ofquarter ~~IPC’s~~ended ~~investment~~September 30, ~~portfolio~~2008, wedue ~~have~~to ~~sufficient~~the ~~liquidity~~ongoing tosignificant ~~meet~~market ~~IPC’s~~volatility ~~ongoing commitments.~~and the guidance

Ratings are an important factor in establishing the competitive position of reinsurance companies. IPCRe and IPCRe Europe have an insurer financial strength rating of “A (Excellent; 3rd of 15 categories)” from A.M. Best and are rated “A- (Strong; 7th of 18 categories)” for financial strength and counter-party credit by Standard & Poor’s (“S & P”). A.M. Best and S & P ratings reflect their opinions of a reinsurance company’s financial strength, operating performance, strategic position and ability to meet its obligations to policyholders, but are not evaluations directed to investors in our securities and are not recommendations to buy, sell or hold our securities. Our ratings are subject to periodic review by A.M. Best and S & P, and we cannot assure you that we will be able to retain those ratings. Prior to October 2005, both A.M. Best and S & P had given IPCRe and IPCRe Europe insurer financial strength ratings of A+. In November 2005, both rating agencies lowered the ratings to their current levels as a result of the impact on our net income and shareholders’ equity resulting from the devastation brought by hurricanes Katrina and Rita, and S & P ascribed a “Negative” outlook. In April 2007, S & P further lowered our rating predominantly as a result of a reassessment of our mono-line business model even though that model has

~~remained~~set ~~relatively~~out ~~unchanged~~in ~~since~~FASB ~~our~~FSP ~~inception.~~SFAS S157-3, &“Determining ~~P then improved~~ the ~~outlook~~Fair toValue ~~“Stable”.~~of Ina ~~November~~Financial ~~2007,~~Asset ~~A.M.~~When ~~Best affirmed our A rating, but lowered~~ the ~~outlook~~Market tofor ~~“Negative”.~~That IfAsset ~~these~~Is ~~ratings~~Not ~~are reduced further from their current levels by A.M. Best and/or S & P~~Active”, ~~our~~we ~~competitive~~have ~~position~~used in the ~~insurance industry could suffer and it may be more~~ ~~difficult~~most ~~for~~recently usavailable toNAV ~~market~~(as ~~our~~of ~~products.~~the Apreceding ~~significant~~month ~~downgrade~~end) toplus aan ~~rating~~estimate ~~below~~of A-the byNAV ~~A.M.~~performance ~~Best~~of orthe Sfund &of Phedge ~~could~~funds ~~trigger~~(for ~~provisions~~the ~~allowing~~current ~~some~~month) ~~cedants~~ to ~~opt~~allow ~~to cancel their reinsurance contracts with~~ us ~~and~~to ~~could~~incorporate ~~result~~all inreadily-available ainformation ~~significant loss~~into ofthe ~~business~~valuation as ~~ceding~~reported ~~companies~~within the ~~move~~Company’s toconsolidated ~~reinsurers~~financial ~~with higher ratings~~statements.

~~IPCRe~~The estimated NAV is ~~not~~obtained afrom ~~licensed~~the ~~insurer~~fund’s ininvestment ~~the~~manager ~~United~~who ~~States~~derives ~~and~~an ~~therefore,~~estimate ~~under~~of the ~~terms~~performance of ~~most~~the offund ~~its contracts with U.S.-~~based ~~companies,~~on ~~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~~month-end ~~of a~~positions ~~letter~~from ~~of credit issued by an acceptable bank,~~ the ~~establishment~~underlying ofthird-party ~~a trust, or a cash advance~~funds. ~~Currently~~In ~~IPCRe~~order ~~obtains letters of credit through a commercial bank pursuant~~ to aobtain ~~bilateral~~comfort ~~facility~~over in the ~~amount~~reasonableness of ~~$350~~this ~~million~~estimated ~~as well as through the $250 million senior secured syndicated facility discussed below. In turn~~NAV, ~~IPCRe~~we ~~provides~~assess the ~~banks~~difference ~~security~~between ~~by giving them liens over certain of IPCRe’s investments in an amount not to exceed 118% of~~ the ~~aggregate~~estimated ~~letters~~NAV ofand ~~credit~~final ~~outstanding.~~month-end ~~Effective~~NAVs ~~March 31,~~to ~~2008~~ensure ~~and~~that ~~December 31, 2007,~~ there ~~were~~have ~~outstanding~~been ~~letters~~no ofsignificant ~~credit of $138~~variances.7 ~~million~~Any ~~and~~movement ~~$183.3~~in ~~million, respectively. The majority of~~ the ~~amount~~estimated atNAV ~~the~~relative ~~end of March 2008 was due~~ to the ~~requirements~~final ~~of our~~NAV ~~clients as a result~~ of ~~claims arising from hurricanes Katrina, Rita and Wilma. If we were unable to obtain~~ the ~~necessary~~fund ~~credit,~~would ~~IPCRe could~~ be ~~limited~~recorded in ~~its ability to write business for our clients in~~ the ~~United~~following ~~States.~~reporting ~~The total amount of security required by the banks under the facilities at March 31, 2008 and December 31, 2007 was $162~~period.1 ~~million~~Such ~~and~~adjustments ~~$214.8~~may ~~million,~~be ~~respectively~~material. ~~Effective April 13, 2006 IPC entered into a five-year, $500 million credit agreement with a syndicate of lenders.~~ The ~~credit~~use ~~agreement consists~~ of a $250 million senior unsecured credit facility available for revolving borrowings and letters of credit, and a $250 million senior secured credit facility available for letters of credit. The revolving line of credit is available for the working capital, liquidity and general corporate requirements of the Company and its subsidiaries. Total letter of credit capacity available to IPC is at least $600 million. Under the terms of the $500 ~~million~~estimated ~~credit~~NAV ~~agreement,~~in ~~IPC~~respect ~~is permitted to declare and pay dividends provided there are no defaults~~ of ~~covenants or unmatured defaults pending. One of~~ the ~~significant~~fund ~~covenants~~ of ~~the~~hedge ~~facility~~funds ~~requires~~increased ~~IPC to maintain a minimum net worth (shareholders’ equity) of $1 billion, plus 25% of any positive net income for each fiscal year, beginning with~~ the ~~fiscal~~level ~~year ending December 31, 2006, plus 25%~~ of ~~the~~unobservable ~~net proceeds of any equity issuance or other capital contributions~~inputs. ~~As of March 31~~Hence, ~~2008~~we ~~the~~have ~~maximum~~classified ~~dividend payable by IPC Holdings under~~ the ~~terms~~fund of ~~the~~funds ~~facility~~as ~~was~~Level ~~$825~~3.0 ~~million. As of the date of this report, no amounts have been drawn under the facility, and we are in compliance with all terms and covenants thereof.~~

As stated above, it is ultimately management’s responsibility to determine fair values of the Company’s investments. In order to verify the quality of the NAV provided by the fund of hedge funds (“Select Hedge”) on a monthly basis, management perform certain procedures to assess the quality by comparison to the monthly estimated NAV to that month’s final NAV (drift analysis). Management also performs this on an annual basis by comparing the year-end NAV to the audited financial statements and investigates any significant movements. In addition to the monthly and annual checks, management hold regular calls with the Select Hedge investment manager to understand and assess the reasonability of the change in NAV.

As part of the annual financial close process, management obtains the fund’s administrator’s Statement on Auditing Standard No. 70, “Reports on the Processing of Transactions by Service Organizations” (“SAS 70”) report. The SAS 70 is an internationally recognized auditing standard on the processing of transactions by service organizations developed by the American Institute of Certified Public Accountants. Management also performs an onsite visit at the fund manager to assess their procedures and controls for ongoing monitoring of the valuation of the underlying funds and of the Select Hedge NAV.

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

The following table presents the fair market value of the Company’s Level 3 financial assets (and liabilities) as at March 31, 2009:

Fair value measurements using significant unobservable inputs (Level 3)


Beginning balance as at January 1, 2009	$	159,709
Transfers in (out) of Level 3	$	—
Total realized and unrealized (losses) gains included in earnings	$	(1,270	)
Subscriptions, redemptions, issuances and settlements	$	(50,000	)

Ending balance at March 31, 2009	$	108,439

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2009	$	7,687

The company uses beginning fair values for the accounting for transfers in and out of Level 3.

Excluding the sub-class shares which are described below, Select Hedge permits monthly withdrawals, although there is a notification period of 3 business days prior to the last business day of a month for the redemption to be effective on the last business day of the next following month. Approximately 90% of the proceeds from a redemption will generally be paid within 20 business days after the redemption date, with the balance paid following the Select Hedge’s year-end audit.

In response to current market conditions, Select Hedge has introduced “side pockets”, which are sub-funds within Select Hedge that have restricted liquidity which may potentially extend over a much longer period than the typical liquidity of Select Hedge. Should the Company seek to liquidate its investment in Select Hedge, the Company would not be able to fully liquidate its investment without some delay, which may be considerable. In such cases, until the Company is permitted to fully liquidate its interest in Select Hedge, the value of its investment could fluctuate based on adjustments to the fair value of the investments contained within the side pocket as determined by Select Hedge. Since December 31, 2008, the Company has held a sub-class of Select Hedge shares in addition to the class of shares it previously held. The sub-class shares are not currently redeemable, but as liquidity returns to the side-pockets and the sub-funds are redeemed as cash, the investment

manager can make the election to return the sub-class shares to the fully paid shares of the Fund. The Company expects that the sub-class shares will continue to be valued monthly at their fair value, which reflects the illiquidity of the underlying positions. The Company will be required to hold its sub-class shares until securities held in the side pockets are liquidated. Management has not made any adjustments to the NAV reported by Select Hedge in estimating fair value. Due to the illiquid nature of the investments in the side pockets, there is significant judgement involved in estimating this fair value. As at March 31, 2009, approximately 31.82% of Select Hedge’s net assets were invested in side pockets, which totaled approximately $35 million.

RESULTS OF OPERATIONS, QUARTERS ENDED MARCH 31, 2009 AND 2008

Our net income for the quarter ended March 31, 2009 was $8.3 million, compared to $86.8 million for the quarter ended March 31, 2008. The primary reasons for the decrease in net income are the continued severe financial market disruption resulting in changes in fair value which are recorded as investment losses, the increase in losses and loss adjustment expenses experienced during the quarter and the increase in general and administrative expenses resulting from costs relating to certain strategic initiatives. These were offset by an increase in earned premiums. Details of these, as well as other variances, are discussed below.

In the quarter ended March 31, 2009, we wrote gross premiums of $234.6 million, compared to $197.9 million in the first quarter of 2008. We wrote premiums in respect of new business totaling $19.6 million, including a $12.4 million pro rata energy contract. Premiums from existing business were $29.7 million more in the first quarter of 2009 in comparison to the first quarter of 2008, mostly due to increases in pricing, where contracts saw price increases which on average were between 5% and 15%. Business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled $14.8 million. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants’ actual exposure base and the original estimates thereof, were $1.5 million more in the first quarter of 2009 in comparison to the first quarter of 2008. There was a $0.7 million increase in reinstatement premiums in the first quarter of 2009 compared to the first quarter of 2008.

In the quarter ended March 31, 2009, we ceded $3.2 million of premiums to our retrocessional facilities, compared with $2.0 million in the first quarter of 2008. The actual contracts ceded are at IPC’s underwriters’ judgement in optimizing the risk profile of the portfolio, which can cause premiums ceded to vary as a proportion of our gross writings from quarter to quarter.

Net premiums earned in the quarter ended March 31, 2009 were $98.7 million, compared to $89.7 million in the first quarter of 2008. This increase is mainly due to the increase in premiums written in the quarter, as explained above.

Net investment income was $21.9 million in the quarter ended March 31, 2009, compared to $23.9 million in the first quarter of 2008. This $2.0 million decrease is mainly attributed to a decrease in fixed maturity investment yields and a decrease in average invested assets.

We recognized a net loss of $35.6 million from investments in the quarter ended March 31, 2009, compared to a net loss of $6.0 million in the first quarter of 2008. This increase is mainly attributed to an adverse $31.7 million change in fair value recorded during the quarter. During January 2009, we redeemed $50 million of our position in a fund of hedge funds, which resulted in a realized loss of $9.0 million. The Company received 90% of the proceeds 20 business days after the redemption date of January 31, 2009, with the remainder expected upon completion of the audit of the fund. The change in fair value comprised decreases of $(20.4) million and $(19.0) million from our fixed maturity investments and our equity investments in mutual funds, respectively, due to current market conditions, which were offset in part by $7.7 million from our investment in a fund of hedge funds.

In the quarter ended March 31, 2009, we incurred net losses and loss adjustment expenses of $39.1 million, compared to $5.3 million in the first quarter of 2008. Net losses incurred in the first quarter of 2009 included $15.0 million from winter storm Klaus that affected southern France and $13.3 million from the bushfires in south eastern Australia, as well as net adverse development to our estimates of ultimate losses for several prior year events. Net incurred losses in the first quarter of 2008 included $14.5 million from events in 2008, primarily the Alon Refinery explosion in Texas, a storm that affected Queensland, Australia, and windstorm Emma that affected parts of Europe. This was offset in part by reductions to our estimates of ultimate losses for several events in 2007 totaling $9.7 million. Other losses in the first quarter of 2008 included net movements from other prior year events and approximately $1.2 million attritional losses from proportional treaties, mostly resulting from the recent failure of several satellites.

Net acquisition costs incurred, which consist primarily of commissions and brokerage fees paid to intermediaries for the production of business, were $9.8 million for the quarter ended March 31, 2009, compared to $8.7 million in the first quarter of 2008. These costs have increased in proportion to the increase in earned premiums in 2009. General and administrative expenses were $24.3 million in the quarter ended March 31, 2009, compared to $7.1 million in the corresponding period of 2008. This increase is mainly due to costs of approximately $13.8 million, including legal and financial advisory services, associated with the Company’s strategic initiatives, designed to increase shareholder value, which resulted in the Agreement and Plan of Amalgamation with Max, as well as costs associated with the acceleration of compensation awards in connection with the retirement of our Chief Executive Officer.

LIQUIDITY AND CAPITAL RESOURCES

IPC Holdings is a holding company that conducts no reinsurance operations of its own, and its cash flows are limited to distributions from IPCRe, IPCRe Europe and IPCUSL by way of loans or dividends. The dividends that IPCRe may pay are limited by the Insurance Act. The dividends that IPC Holdings, IPC Limited, IPCRe and IPCUSL may pay are further limited by the Bermuda Companies Act 1981 which prohibits a Bermuda company from declaring or paying a dividend if there are reasonable grounds for believing that (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities, its issued share capital and its share premium accounts.

Under the Insurance Act, IPCRe is required to maintain a solvency margin and a minimum liquidity ratio, and is prohibited from declaring or paying dividends if to do so would cause IPCRe to fail to meet its solvency margin and its minimum liquidity ratio. Under the Insurance Act, IPCRe is prohibited from paying dividends of more than 25% of its total statutory capital and surplus at the end of the previous fiscal year unless it files an affidavit signed by at least two directors and IPCRe’s principal representative stating that the declaration of such dividends has not caused IPCRe to fail to meet its solvency margin and minimum liquidity ratio. The Insurance Act also prohibits IPCRe from declaring or paying any dividend without the approval of the Supervisor of Insurance of Bermuda if IPCRe failed to meet its solvency margin and minimum liquidity ratio on the last day of the previous fiscal year. In addition, IPCRe is prohibited under the Insurance Act from reducing its opening total statutory capital by more than 15% without the approval of the Bermuda Monetary Authority. The maximum dividend payable by IPCRe in accordance with the foregoing restrictions as of March 31, 2009 was approximately $459.0 million.

IPCRe’s sources of funds consist of premiums written, investment income, paid losses recovered from retrocessionaires and proceeds from sales and redemptions of investments. Cash is used primarily to pay losses and loss adjustment expenses, premiums retroceded, brokerage commissions, excise taxes, general and administrative expenses, repurchase of shares and dividends. Cash flows used in or from operations differ, and may continue to differ, substantially from net income. To date, we have invested all cash flows not required for operating purposes or returned amounts to shareholders via the repurchase of shares and the payment of dividends. The potential for large catastrophes means that unpredictable and substantial payments may need to be made within relatively short periods of time. Hence, future cash flows cannot be predicted with any certainty and may vary significantly between periods.

Net cash inflows from operating activities in the quarter ended March 31, 2009 were $77.9 million compared to $74.8 million in the corresponding period of 2008. Net cash inflows from investing activities in the quarter ended March 31, 2009 were $54.4 million compared to net cash inflows of $81.1 million in the corresponding period of 2008. Net cash outflows from financing activities in the quarter ended March 31, 2009 were $87.2 million compared to $66.4 million in the corresponding period of 2008, as a result of the repayment of the bank loan of $75 million in March 2009, compared to the Company’s repurchase of $49.5 million of its common shares in March 2008 and payment of a $4.2 million dividend on preferred shares in February 2008. Cash and cash equivalents increased by $45.1 million in the quarter ended March 31, 2009, resulting in a balance of $122.1 million at March 31, 2009.

At March 31, 2009, 52% of IPC’s fixed maturity investment portfolio (based on fair value) was held in securities rated AAA, and 28% was held in securities rated AA. At December 31, 2008 the proportions of securities so rated were 44% and 22%, respectively. At March 31, 2009 the average modified duration of IPC’s fixed maturity portfolio was 3.1 years, compared to 3.1 years at December 31, 2008. We believe that because of the relatively short duration and high quality of IPC’s investment portfolio, we have sufficient liquidity to meet IPC’s ongoing commitments.

Ratings are an important factor in establishing the competitive position of reinsurance companies. IPCRe and IPCRe Europe have an insurer financial strength rating of “A (Excellent; 3rd of 15 categories)” with a “Negative” outlook from A.M. Best and are rated “A- (Strong; 7th of 18 categories)” with a “Stable” outlook for financial strength and counter-party credit by Standard & Poor’s Ratings Services (“S&P”). A.M. Best and S&P ratings reflect their opinions of a reinsurance company’s financial strength, operating performance, strategic position and ability to meet its obligations to policyholders, but are not evaluations directed to investors in our securities and are not recommendations to buy, sell or hold our securities. Our ratings are subject to periodic review by A.M. Best and S&P, and we cannot assure you that we will be able to retain those ratings. Prior to October 2005, both A.M. Best and S&P had given IPCRe and IPCRe Europe insurer financial strength ratings of A+. In November 2005, both rating agencies lowered the ratings to their current levels as a result of the impact on our net income and shareholders’ equity resulting from the devastation brought by hurricanes Katrina and Rita, and S&P ascribed a “Negative” outlook. In April 2007, S&P further lowered our rating predominantly as a result of a reassessment of our mono-line business model even though that model has remained relatively unchanged since our inception. S&P then improved the outlook to “Stable”, while A.M. Best affirmed our A rating, but lowered the outlook to “Negative”. In December 2008, A.M. Best affirmed our A rating, and maintained the outlook as “Negative”. Following our presentation of a combined business plan to the ratings agencies, we and Max received indicative ratings for the combined business following the Amalgamation that were satisfactory. If our current ratings are reduced further by A.M. Best and/or S&P, our

competitive position in the reinsurance industry could suffer and it may be more difficult for us to market our products. A downgrade to a rating below A- by A.M. Best or S&P would trigger provisions allowing some cedants to opt to cancel their reinsurance contracts with us and cedants that do not have this termination right may not be willing to engage in new business with us. These events would be expected to result in a significant loss of business as ceding companies move to reinsurers with higher ratings.

IPCRe is not a licensed insurer in the United States of America and therefore, under the terms of most of its contracts with U.S.-based companies, must provide security to reinsureds to cover loss reserves 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 the $250 million senior secured syndicated credit facility available for letters of credit and a $350 million letters of credit bilateral master agreement. On March 1, 2009, certain terms of the senior credit facilities were amended, subject to the closing of the proposed Amalgamation with Max. With respect of the senior secured facility, IPCRe provides the banks security by giving them liens over certain of IPCRe’s investments in an amount not to exceed 118% of the aggregate letters of credit outstanding. Effective March 31, 2009 and December 31, 2008, there were outstanding letters of credit of $133.1 million and $166.3 million, respectively. If we were unable to obtain the necessary credit, IPCRe could be limited in its ability to write business for our clients in the United States. The total amount of security required by the banks under the facilities at March 31, 2009 and December 31, 2008 was $155.8 million and $194.2 million, respectively.

There is a potential contractual obligation to JP Morgan of $9.3 million due within less than one year from March 31, 2009 which is dependent on when and whether there is a significant business combination transaction. In addition, pursuant to the Amalgamation Agreement the Company or Max may be required to pay a termination fee of $50.0 million in certain circumstances. We are continuing to incur significant expenses in connection with legal and financial advisory services relating to the amalgamation, which will be recognized in the period in which the expenses are incurred.

We believe that our operating cash flow and the high quality of our investment portfolio, provides sufficient liquidity to meet our cash demands.

None of the Company, IPCRe or IPCUSL has any material commitments for capital expenditures.

OFF-BALANCE SHEET ARRANGEMENTS

Neither the Company nor any of its subsidiaries has any forms of off-balance sheet arrangements, or cash obligations and commitments, as defined by Item 303(a)(4) of Regulation S-K.

THE AMALGAMATION

The Amalgamation Agreement

On March 1, 2009, the Company, its wholly owned subsidiary IPC Limited and Max entered into the Amalgamation Agreement, pursuant to which Max will amalgamate with IPC Limited. The closing of the Amalgamation is subject to customary closing conditions, including certain approvals by the Company’s and Max’s shareholders and receipt of certain insurance and other regulatory approvals. Immediately following the Amalgamation, the Company will change its name to “Max Capital Group Ltd.”

After the effective time of the Amalgamation, Max shareholders will have the right to receive 0.6429 common shares of the Company and cash in lieu of fractional shares in exchange for each Max common share they hold, unless they exercise appraisal rights under Bermuda law. The Company will issue approximately 36,440,847 common shares in connection with the Amalgamation. Pursuant to the Amalgamation Agreement the Company or Max may be required to pay a termination fee of $50.0 million in certain circumstances. In connection with JPMorgan’s services as financial advisor to the Board of Directors in connection with IPC’s strategic process and the Amalgamation, the Board of Directors agreed to pay JPMorgan an aggregate fee of $13.0 million, $3.7 million of which has been paid as of March 31, 2009 and $9.3 million of which is payable upon the occurrence of a significant business combination transaction.

The Validus Offer

On March 31, 2009, the Company received an unsolicited offer from Validus pursuant to which the Company would amalgamate with a wholly owned subsidiary of Validus and each of the Company’s common shares would be cancelled and converted into the right to receive 1.2037 Validus common shares. On April 7, 2009, the Company announced that the Board of Directors, after thorough consideration and consultation with management and its legal and financial advisors and upon consideration of a variety of factors, determined that Validus’s offer did not constitute a superior proposal under the terms of the Amalgamation Agreement, and reaffirmed its recommendation that the Company’s shareholders approve the Amalgamation with Max. On April 9, 2009 Validus announced that it had filed a preliminary proxy statement with the SEC for the solicitation of proxies in opposition to the Amalgamation with Max.

On April 28, 2009, Validus commenced a lawsuit in the Supreme Court of Bermuda Commercial Court (the “Court”) against the Company, IPC Limited and Max. The complaint alleges, among other things, that: (1) the $50.0 million termination fee is unlawful and unenforceable, (2) the Company’s board of directors breached its duty and acted otherwise than in accordance with the constitution of the Company by entering into the amalgamation agreement with Max and (3) the Company’s board of directors continues to breach its duty by acting in accordance with the provisions in the amalgamation agreement with Max that provide for the termination fee and the restrictions on entering into discussions with third parties regarding acquisition proposals. Through the lawsuit, Validus is apparently seeking declaratory and injunctive relief to prevent the Company and IPC Limited from paying any portion of the $50.0 million termination fee to Max and from taking any steps to give effect to the non-solicitation provisions in the amalgamation agreement. Additionally, Validus has requested the Court require the Company pay the costs of the proceedings in the Court as well as other unspecified relief. While at this time it is not possible to determine the ultimate resolution of, or estimate the liability related to, Validus’s lawsuit, based on its review of the complaint the Company believes that the allegations are without merit.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

The investment portfolio of IPCRe is exposed to market risk. Market risk is the risk of loss of fair value resulting from adverse fluctuations in interest rates, foreign currency exchange rates and equity prices. Measuring potential losses in fair values has become the focus of risk management efforts by many companies. Such measurements are performed through the application of various statistical techniques. One such technique is Value at Risk (“VaR”). VaR is a summary statistical measure that uses historical interest and foreign currency exchange rates, equity prices and estimates of the volatility and correlation of each of these rates and prices to calculate the maximum loss that could occur within a given statistical confidence level and time horizon.

Measuring potential losses in fair values has become the focus of risk management efforts by many companies. Such measurements are performed through the application of various statistical techniques. One such technique is Value at Risk (“VaR”). VaR is a summary statistical measure that uses historical interest and foreign currency exchange rates, equity prices and estimates of the volatility and correlation of each of these rates and prices to calculate the maximum loss that could occur within a given statistical confidence level and time horizon.

We believe that statistical models alone do not provide a reliable method of monitoring and controlling market risk. While VaR models are relatively sophisticated the quantitative market risk information is limited by the assumptions and parameters established in creating the related models, which rely principally on historical data. Because of this, such models may not accurately predict future market behaviour. Therefore, such models are tools and do not substitute for the experience or judgement of senior management.

~~Our~~IPCRe’s fixed income investment ~~manager~~portfolio ~~performed~~is conservatively managed within a ~~VaR~~well-controlled ~~analysis~~risk toenvironment. ~~estimate~~Our ~~the~~investment ~~maximum~~guidelines prohibit ~~potential~~the ~~loss~~purchase of ~~fair~~securities ~~value~~with ~~for~~a ~~each~~speculative ~~segment~~credit ofrating ~~market~~(below ~~risk,~~BBB-/Baa3) asand ofeven ~~March~~aggregate ~~31,~~BBB/Baa ~~2008~~exposure ~~and~~is ~~2007~~limited ~~and~~to ~~for~~a ~~the~~maximum ~~intervening~~of ~~quarterly points~~5%. ~~The~~While ~~analysis~~credit ~~calculated~~risk is monitored and controlled on an on-going basis, historically the VaR ~~with~~analysis ~~respect~~has not toexplicitly ~~the~~incorporated ~~net~~credit ~~fair~~risk. ~~value~~Even though the limitations of our ~~invested~~investment ~~assets~~guidelines ~~(cash~~have ~~and~~not ~~cash equivalents~~been eased, ~~equity~~given ~~and~~the ~~high-grade~~market ~~fixed~~turmoil ~~maturity~~in ~~securities)~~2008, ~~using~~particularly in the ~~historical~~fourth ~~simulation~~quarter, ~~methodology.~~we Athave ~~March~~worked ~~31,~~with ~~2008~~our ~~the~~investment advisors to institute a VaR ofanalysis ~~IPCRe’s~~that ~~investment~~on ~~portfolio~~a ~~was~~going ~~$17.7~~forward ~~million,~~basis will include the additional variability associated with credit risk exposure.

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~~which~~On ~~represents~~behalf of the company, our investment managers performed a ~~95th~~VaR ~~percentile~~analysis to estimate the maximum potential loss of fair value ~~change~~for ~~over~~each asegment ~~one-month~~of ~~time~~market ~~horizon.~~risk, ~~This~~as ~~result~~of ~~was~~March 31, ~~obtained~~2009 ~~through~~and ~~historical~~2008 ~~simulation~~and ~~using~~for ~~approximately~~the ~~750 days~~intervening quarterly points (3except ~~years~~for credit risk, which we only began to measure as of December 31, 2008). The analysis calculated the VaR with respect to the net fair value of ~~historical~~our ~~interest~~invested ~~rate~~assets (cash and cash equivalents, equity ~~market~~and ~~data.~~high-grade Asfixed ofmaturity securities) using the historical simulation methodology. At March 31, ~~2008~~2009 the VaR of IPCRe’s investment portfolio ~~represented~~was 1%$33.3 ofmillion, ~~the~~which ~~total~~represents ~~fair~~a 95th percentile value change over a one-month time horizon. This result was obtained through historical simulation using 3 years of ~~the~~historical ~~investment~~market ~~portfolio~~data.

The following table presents the VaR of each component of market risk of IPCRe’s ~~investment~~invested ~~portfolio~~assets asat ofMarch 31, ~~the~~2009 ~~beginning~~and 2008, respectively, the quarterly points during 2008 and ~~ending points~~the average for the ~~twelve~~12 months ended March 31, ~~2008~~2009, ~~and~~calculated using the ~~average~~VaR ~~thereof~~at the beginning, ending and quarterly points (expressed in thousands of U.S. dollars):

Market Risk	AtMarch 31,~~2008~~2009			AtDecember 31,~~2007~~2008			AtSeptember 30,~~2007~~2008			AtJune 30,~~2007~~2008			AtMarch 31,~~2007~~2008			Average ~~for~~for12 ~~12months~~months endedMarch 31, ~~2008~~2009
Currency	$	1,416		$	2,324		$	2,508		$	2,669		$	2,703		$	2,324
Currency Fixed income (incl. credit risk	$	1,003		$	1,701		$	1,066		$	1,316		$	1,416		$	1,300
Interest Rate		16,871			19,956			22,889			25,917			25,444			22,215
from December 31, 2008)		30,208			32,195			27,950			23,104			16,871			26,066
Equity (incl. hedge fund)		1821,~~140~~289			24,~~782~~859			2114,~~509~~692			2019,~~023~~862			18,~~814~~140			2019,~~654~~768
Sum of Risk		3652,~~427~~500			4758,~~062~~755			4643,~~906~~708			4844,~~609~~282			4636,~~961~~427			4547,~~193~~134
Diversification Benefit		(1819,~~704~~240	)		(2226,~~119~~019	)		(1819,~~913~~690	)		(1920,~~330~~433	)		(1718,~~254~~704	)		(1920,~~264~~817	)
Total Net Risk	$	1733,~~723~~260		$	2432,~~943~~736		$	2724,~~993~~018		$	2923,~~279~~849		$	2917,~~707~~723		$	2526,~~929~~317

From December 31, ~~2007~~2008 to March 31, ~~2008~~2009, ~~equity~~a ~~VaR~~reduction ~~decreased~~in ~~due to~~ the ~~sale~~allocation ofto ~~parts~~higher risk ofasset ~~our~~classes (equity ~~portfolio~~and hedge fund) and ~~subsequent~~an ~~decrease~~increase in the ~~fair~~cash ~~value~~and ofequivalent ~~our~~holdings ~~equity~~relative ~~positions.~~to ~~In addition~~December 31, ~~interest~~2008 ~~rate~~was ~~net~~offset ~~VaR~~by ~~decreased~~an ~~primarily~~increase ~~due to a reduction~~ in the ~~level~~correlation ofbetween ~~interest~~asset ~~rates~~classes resulting in ~~the~~a ~~United~~VaR ~~States~~estimate ~~and~~that ~~exchange~~was ~~rate~~comparable ~~VaR decreased due~~ to the prior ~~decrease in the market value of foreign currency denominated positions~~quarter. IPCRe’s premiums receivable and liabilities for losses from reinsurance contracts it has written are also exposed to the risk of changes in value resulting from fluctuations in foreign currency exchange rates. To an extent, the impact on loss reserves of a movement in an exchange rate, will be partly offset by the impact on assets (receivables and cash~~/investments~~) denominated in the same currency. As of March 31, ~~2008~~2009 an estimated $7145 million (December 31, ~~2007—~~2008 - $2911 million) of net reinsurance premiums receivable, and an estimated $~~119~~70 million (December 31, ~~2007—~~2008 - $~~142~~47 million) of loss reserves, were denominated in non-U.S. currencies. The currencies to which IPC has the most net exposure are ~~U.K. sterling,~~ the Australian dollar, ~~and~~ the Euro and U.K. sterling. If the dollar weakened 10% against ~~U.K. sterling and~~ the Australian dollar, our net adverse exchange exposure would be approximately $~~3 million and $~~2 million ~~respectively~~. If the dollar strengthened 10% against the Euro and U.K. sterling, our net adverse exchange exposure would be approximately $~~0.4~~2 million and $2 million respectively.

Item 4.

Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective. In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f)) or Rule 15d-15(f) under the Securities Exchange Act of 1934) occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Note on Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical information or statements of current condition, including, but not limited to, expectations regarding market cycles, market conditions, the impact of current market conditions and trends on future periods, the impact of our business strategy on our results, trends in pricing and claims and the insurance and reinsurance market response to catastrophic events. Some forward-looking statements may be identified by our use of terms such as “believes”, “anticipates”, “intends”, “expects” or other words of similar import and relate to our plans and objectives for future operations. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. We do not intend, and are under no obligation, to update any forward-looking statement contained in this report. The largest single factors in our results have been and will continue to be the severity and/or frequency of catastrophic events, which are inherently unpredictable. Numerous factors could cause our actual results to differ materially from those in the forward-looking statements, including, but not limited to, the following: (i) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding our expectations; (ii) the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time; (iii) any lowering or loss of ~~one of the~~ financial ratings of ~~IPC~~any ~~Holdings’~~ wholly-owned ~~subsidiary(ies),~~operating ~~IPCRe Limited (“IPCRe”) and/or IPCRe Europe~~subsidiary; (iv) a decrease in the level of demand for property catastrophe reinsurance, or increased competition owing to increased capacity of reinsurers offering property catastrophe coverage; (v) the effect of competition on market trends and pricing; (vi) loss of our non-admitted status in U.S. jurisdictions or the passage of federal or state legislation subjecting us to supervision or regulation in the United States; (vii) challenges by insurance regulators in the United States to our claim of exemption from insurance regulation under current laws; (viii) a contention by the United States Internal Revenue Service that we are engaged in the conduct of a trade or business within the United States (including through a permanent establishment in the United States); (ix) loss of services of any one of our executive officers; (x) changes in general economic conditions, including changes in interest rates and/or equity values in the United States ofand ~~America~~elsewhere and continued ~~elsewhere~~instability in global credit markets; or (xi) changes in exchange rates and greater than expected currency exposure.

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PART II. OTHER INFORMATION

Item 1.

Legal Proceedings.

NONE

Item 1A.

Risk Factors.

~~There~~The ~~have~~following ~~been~~risk factors nosupplement ~~material changes to~~ the ~~risk~~risks ~~factors~~disclosed ~~previously described~~ in Part I, Item 1A inof ~~the~~our ~~Company’s~~ Annual Report on Form 10-K for the year ended December 31, ~~2007,~~2008 filed with the ~~Securities and Exchange Commission (“~~SEC”) on February 2227, ~~2008~~2009.

Risks Related to the Amalgamation

Failure to complete the Amalgamation could negatively impact our share price, future business and financial results.

The Amalgamation Agreement contains a number of conditions precedent that must be satisfied or waived prior to the consummation of the Amalgamation. In addition, the Amalgamation Agreement may be terminated by us or Max under certain circumstances. In addition to customary termination provisions contained in agreements of this nature, we may terminate the Amalgamation Agreement if the total number of dissenting Max common shares for which appraisal rights have been exercised pursuant to Bermuda law exceeds 15% of the issued and outstanding Max common shares on the business day immediately following the last day on which Max shareholders can require appraisal for their common shares. Additionally, we or Max may terminate the Amalgamation Agreement if the other party’s good-faith estimate of such party’s book value as of the day prior to the requesting party’s shareholder meeting indicates that since December 31, 2008, either (1) the other party’s book value has declined by more than 50%, or (2) the other party’s book value has declined by more than 20 percentage points greater than the decline in the terminating party’s book value during the same period (with any increase in a party’s book value since December 31, 2008, deemed to be no change for purposes of measuring the 20 percentage point differential).

If the Amalgamation is not completed, our ongoing business may be adversely affected as follows:

•

the manner in which brokers, insurers, cedants and other third parties perceive us may be negatively impacted, which in turn could affect our ability to compete for or to win new business or obtain renewals in the marketplace;

•

our current and prospective employees may experience uncertainty about their future roles, which may adversely affect our ability to attract and retain key personnel; the attention of our management will have been diverted to the Amalgamation instead of being directed solely to our own operations and pursuit of other opportunities that could have been beneficial to us;

•

we may have to pay certain costs relating to the Amalgamation, including certain legal, accounting and financial advisory fees; and

•

we may be required, in certain circumstances, to pay a termination fee of $50 million to Max.

Validus’s offer may negatively impact our ability to consummate the Amalgamation and may cause disruption to our ongoing business.

On March 31, 2009, the Board of Directors received an unsolicited acquisition proposal from Validus Holdings, Ltd. (“Validus”). On April 7, 2009, after consulting with our management and our outside legal and financial advisors and upon consideration of a variety of factors, the Board of Directors unanimously determined that Validus’s offer did not constitute a superior proposal, as defined in the Amalgamation Agreement. While the Board of Directors unanimously reaffirmed its recommendation that our shareholders approve the Amalgamation, Validus’s offer may still pose potential risks to the consummation of the Amalgamation. On April 8, 2009, Validus announced that it intended to file proxy solicitation materials opposing the Amalgamation and that it was commencing litigation to reduce the $50 million termination fee payable in certain circumstances under the Amalgamation Agreement. On April 9, 2009, Validus filed a preliminary proxy statement with the SEC for the solicitation of proxies in opposition to the Amalgamation. We intend to vigorously defend the terms of the Amalgamation Agreement and the Board of Directors’ recommendations of the Amalgamation. It is unclear what actions Validus may take to further its proposal and prevent the Amalgamation from occurring. However, any legal action or other proceedings in which we or the Board of Directors would have to defend ourselves may be expensive, time-consuming and disruptive to our ongoing business. Even if ultimately unsuccessful, actions taken by Validus could negatively impact the expected timing of the consummation of the Amalgamation, which is expected

to occur in June 2009. In addition, there is a risk that our shareholders may vote against proposals relating to the Amalgamation as a result of Validus’s offer and that, consequently, the required shareholder vote may not be obtained. In that case, it is possible that we may decide not to enter into a transaction with Validus or any other party. Moreover, if the Amalgamation with Max does not occur, it is possible that Validus would be unwilling to enter into a transaction with us, or that a combination between us and any other party, including Validus, could not be negotiated and completed before September. In that case, we would be entering the hurricane season with continued uncertainty with respect to our strategic direction, which may impair our ability to access capital markets at a time when we may be most in need of capital.

We may experience difficulties integrating our business with Max, which could cause the combined entity to fail to realize the anticipated cost savings and other benefits of the Amalgamation.

We entered into the Amalgamation Agreement because we believe that the Amalgamation will be beneficial to us and our shareholders. Achieving the anticipated benefits of the Amalgamation will depend in part upon whether we and Max integrate our businesses in an efficient and effective manner. We may not be able to accomplish this integration process smoothly or successfully. The integration of certain operations following the Amalgamation will take time and will require the dedication of significant management resources, which may temporarily distract management’s attention from the routine business of the combined entity. Any delay or inability of management to successfully integrate the operations of the two companies could compromise the combined entity’s potential to achieve the long-term strategic benefits of the Amalgamation and could have a material adverse effect on the business, financial condition, operating results and market value of the combined entity’s common shares after the Amalgamation.

The success of the combined entity after the Amalgamation will depend in part upon our ability to retain key employees. Competition for qualified personnel can be intense. In addition, key employees may depart because of issues relating to the uncertainty or difficulty of integration or a desire not to remain with the combined entity. Accordingly, no assurance can be given that we will be able to retain key employees.

We must obtain various governmental, regulatory and other consents to complete the Amalgamation, which, if delayed, not granted, or granted with unacceptable conditions, may jeopardize or delay the completion of the Amalgamation, result in additional expenditures or resources and/or reduce the anticipated benefits of the Amalgamation.

We must obtain certain approvals and consents in a timely manner from governmental agencies, including in the U.S., Ireland, Singapore and the United Kingdom prior to the completion of the Amalgamation. If we do not receive these approvals, or do not receive them on terms that satisfy the conditions set forth in the Amalgamation Agreement, then the parties will not be obligated to complete the Amalgamation. The governmental agencies from which we will seek these approvals have broad discretion in administering the governing regulations. As a condition to the approval of the Amalgamation, these agencies may impose terms, conditions, obligations or restrictions that could negatively affect the way the combined entity conducts business following the Amalgamation. The terms, conditions, obligations or restrictions of such approvals could jeopardize or delay the completion of the Amalgamation. If we agree to any material term, condition, obligation or restriction in order to obtain any approval required to complete the Amalgamation, these terms, conditions, obligations or restrictions could adversely affect the ability to integrate our operations with Max’s or could reduce the anticipated benefits of the Amalgamation. This could result in a material adverse effect on our business, financial condition and operating results following the Amalgamation, as well as the market value of the combined entity’s common shares after the Amalgamation.

The Amalgamation Agreement contains provisions that restrict us from pursuing alternative transactions or engaging in discussions with third parties as to alternative transactions.

The Amalgamation Agreement contains detailed provisions that restrict our and our subsidiaries’ and advisors’ ability to initiate, solicit, encourage (including by providing information) or facilitate proposals regarding any amalgamation or similar transaction with another party or participate or otherwise engage in any discussions or negotiations relating to such an alternative transaction. Although the Board of Directors is permitted to change its recommendation in response to a bona fide unsolicited superior proposal, such a change in its recommendation gives Max the right to terminate the Amalgamation Agreement and receive a termination fee of $50 million. In addition, a $50 million termination fee would also be payable by us if (1) the Amalgamation Agreement is terminated for failure to complete the Amalgamation on or before November 30, 2009, and within 12 months of the termination date, we enter into or consummate an acquisition transaction with the person (or affiliate) that made an acquisition proposal that was publicly announced or otherwise communicated to our officers or directors prior to November 30, 2009, (2) the Amalgamation Agreement is terminated on the basis of certain specified breaches (as provided therein) and within 12 months, we enter into or consummate an acquisition transaction with the person (or affiliate) that

made an acquisition proposal that was publicly announced or otherwise communicated to our officers or directors prior to our shareholder meeting with respect to the Amalgamation or (3) the Amalgamation Agreement is terminated for failure by us to obtain its required shareholder vote and within 12 months of the termination date, we or any of our subsidiaries enter into or consummate an acquisition transaction with the person (or affiliate) that made an acquisition proposal that was publicly announced or otherwise communicated to our officers or directors prior to the date of our shareholder meeting with respect to the Amalgamation.

These provisions could discourage third parties from considering or proposing alternative transactions, even if they would constitute superior proposals, or might result in any such superior proposal being less favorable to us than if the third party had been provided with such information or because of the added expense of the termination fee.

Risks Related to the Combined Entity Following the Amalgamation

The price of our common shares after the Amalgamation may be affected by factors different from those affecting the price of our common shares before the Amalgamation.

Following the completion of the Amalgamation, holders of our common shares prior to the Amalgamation will own shares in the combined entity that includes the operations of Max. As our and Max’s businesses are different, the results of operations as well as the price of our common shares following the Amalgamation may be affected by factors different from those factors affecting us as an independent stand-alone entity.

The Amalgamation may result in a ratings downgrade of the combined entity or its insurance subsidiaries which may result in a material adverse effect on the combined entity’s business, financial condition and operating results, as well as the market price of its common shares.

Ratings with respect to claims paying ability and financial strength are important factors in maintaining customer confidence in the combined entity and its ability to market insurance products and compete with other insurance and reinsurance companies. Rating organizations regularly analyze the financial performance and condition of insurers and reinsurers. S&P affirmed IPCRe’s “A-minus” rating with a stable outlook on March 3, 2009, noting decreased earnings and capital volatility after the Amalgamation among factors driving the ratings statement. A.M. Best placed its “A” financial strength rating for IPCRe under review with negative implications March 3, 2009. Explaining the “under review” status of IPCRe, A.M. Best said the IPC-Max combination will be largely influenced by Max from a multitude of perspectives—including premium volume, liabilities, operating platforms and information technology systems. Following the Amalgamation, any ratings downgrades, or the potential for ratings downgrades, of the combined entity or its subsidiaries could adversely affect the combined entity’s ability to market and distribute products and services and successfully compete in the marketplace, which could have a material adverse effect on its business, financial condition and operating results, as well as the market price for our common shares.

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds.

(ca) ~~Issuer Purchases of Equity Securities~~None.

Period	Total Numberof SharesPurchased	AveragePrice Paidper Share		Total Number ofShares Purchased asPart of the PubliclyAnnounced Programs	Maximum Dollar value ofShares that may yet bePurchased under thePrograms ($ in thousands)
January 1-31, 2008	—		—	—	11,301
February 1-29, 2008	—		—	—	311,301
March 1-31, 2008	1,789,946	$	27.61	1,789,946	261,834
Total	1,789,946	$	27.61	1,789,946

(b) None.

On April 24, 2007, the Company announced that its Board of Directors had authorized a share repurchase of up to $200 million of the Company’s common shares. Such repurchase may be conducted by means of open market repurchases, privately negotiated transactions (~~including accelerated share repurchase plans or use of a forward contract to repurchase shares~~c) ~~or otherwise, at prices that are prevailing market prices and in accordance with applicable securities laws~~None. The expiration date of the program is May 1, 2008. As of December 31, 2007, we had $11.3 million remaining under our authorized share repurchase program. On February 14, 2008, the Board of Directors authorized a share repurchase of up to $300 million of the Company’s common shares. The authorization ends on April 1, 2009. As of March 31, 2008, we had $261.8 million remaining under our authorized share repurchase programs.

Item 3.

Defaults upon Senior Securities.

NONE

Item 4.

Submission of Matters to a Vote of Security Holders.

~~NONE~~While there were no matters submitted to a vote during the quarter, the Company filed a preliminary registration statement/joint proxy statement with the SEC on March 27, 2009, and amendments thereto on April 13, 2009, and April 27, 2009, in respect of the Amalgamation.

Item 5.

Other Information.

NONE

2027

Item 6.

Exhibits.

(a) Exhibits

ExhibitNumber	Methodof Filing	Description
3.1	(2)	Memorandum of Association of the Company
2.1	(1)	Agreement and Plan of Amalgamation, dated as of March 1, 2009, among IPC Holdings, Ltd., IPC Limited and Max Capital Group Ltd.
3.2	(3)	Amended and Restated Bye-Laws of the Company
2.2	(2)	First Amendment to Agreement and Plan of Amalgamation, dated as of March 5, 2009, among IPC Holdings, Ltd., IPC Limited and Max Capital Group Ltd.
3.3	(2)	Form of Memorandum of Increase of Share Capital
3.1	(4)	Memorandum of Association of the Company
10.1	(4)	First Amendment to Credit Agreement, dated as of January 25, 2008, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
3.2	(5)	Amended and Restated Bye-Laws of the Company
10.2	(5)	Custody Agreement by and between IPCRe Limited and Mellon Bank, N.A., dated January 9, 2008 and effective as of January 1, 2008.
3.3	(4)	Form of Memorandum of Increase of Share Capital
10.3	(5)	Discretionary Investment Management Agreement between AIG Investments Europe Ltd. and IPCRe Limited, dated January 9, 2008 and effective as of December 20, 2007.
10.1	(6)	First Amendment to Credit Agreement, dated as of January 25, 2008, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
11.1	(1)	Reconciliation of basic and diluted net income per common share (“EPS”)
10.2	(7)	Second Amendment and Consent to Credit Agreement, dated as of March 1, 2009, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
12.1	(1)	Statement of Computation of Ratios of Earnings to Fixed Charges
10.3	(8)	Custody Agreement by and between IPCRe Limited and Mellon Bank, N.A., dated January 9, 2008 and effective as of January 1, 2008.
31.1	(1)	Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
10.4	(8)	Discretionary Investment Management Agreement between AIG Investments Europe Ltd. and IPCRe Limited, dated January 9, 2008 and effective as of December 20, 2007.
31.2	(1)	Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
10.7 †	(9)	Retirement and Consulting Agreement between IPCRe Limited and James P. Bryce
32.1	(6)	Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
10.8 †	(9)	Employment Agreement between IPCRe Limited and John R. Weale
32.2	(6)	Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
10.9 †	(9)	Employment Agreement between IPCRe Limited and Peter J.A. Cozens
10.10 †	(9)	Employment Agreement between IPCRe Limited and Stephen F. Fallon
10.11	(10)	Acknowledgement of receipt of an unsolicited letter dated, March 31, 2009, from Validus Holdings, Ltd. outlining a proposed transaction.
11.1	(3)	Reconciliation of basic and diluted net income per common share (“EPS”)
12.1	(3)	Statement of Computation of Ratios of Earnings to Fixed Charges
15.1	(3)	Letter regarding unaudited interim financial information
31.1	(3)	Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
31.2	(3)	Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
32.1	(11)	Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
32.2	(11)	Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002

(1) ~~Filed~~Incorporated ~~herewith~~by reference to Exhibit 2.1 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

(2) Incorporated by reference to ~~the~~Exhibit ~~corresponding~~2.1 ~~exhibit~~to on our ~~Registration~~Current ~~Statement~~Report on Form S8-1K filed with the SEC on March 10, 2009 (File No. ~~333~~0-~~00088~~27662).

(3) ~~Incorporated~~Filed ~~by reference to Exhibit 3~~herewith.~~2 to our quarterly report on Form 10-Q for the six months ended June 30, 2007 filed with the SEC on July 30, 2007 (File No. 0-27662).~~

~~(4)~~28 ~~Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 31, 2008 (File No. 0-27662).~~

(54) Incorporated by reference to ~~Exhibits~~the ~~10.1~~corresponding ~~and~~exhibit ~~10.2~~on to our ~~Current~~Registration ~~Report~~Statement on Form 8S-K1 ~~filed with the SEC on January 14, 2008~~ (~~File~~ No. 0333-~~27662~~00088).

(65) ~~These~~Incorporated ~~certifications~~by ~~are~~reference ~~being~~to ~~furnished~~Exhibit ~~solely~~3.2 ~~pursuant~~ to ~~Section~~our ~~906~~quarterly ofreport ~~the~~on ~~Sarbanes-Oxley~~Form ~~Act of 2002 (sub~~10-~~sections~~Q ~~(a)~~for ~~and~~the ~~(b)~~six ofmonths ~~Section~~ended ~~1350~~June 30, ~~Chapter~~2007 63filed ofwith ~~Title~~the ~~18,~~SEC ~~United~~on ~~States~~July ~~Code)~~30, ~~and~~2007 ~~are~~(File ~~not~~No. ~~being filed as exhibits to this report~~0-27662).

21(6) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 31, 2008 (File No. 0-27662).

(7)	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

(8)	Incorporated by reference to Exhibits 10.1 and 10.2 to our Current Report on Form 8-K filed with the SEC on January 14, 2008 (File No. 0-27662).

(9)	Incorporated by reference to Exhibits 10.2 to 10.5 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

(10)	Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on March 31, 2009 (File No. 0-27662).

(11)	These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), and are not being filed as exhibits to this report.

†	Management contract or compensatory plan, contract or arrangement.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

IPC Holdings, Ltd.

We have reviewed the consolidated balance sheet of IPC Holdings, Ltd. and subsidiaries as of March 31, 2009, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for the three-month period ended March 31, 2009. These condensed consolidated financial statements are the responsibility of the Company’s management.

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

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

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of IPC Holdings, Ltd. and subsidiaries as of December 31, 2008, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the year ended December 31, 2008 (not presented herein); and in our report dated February 27, 2009 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2008, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG

Chartered Accountants

Hamilton, Bermuda

May 8, 2009

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)
	IPC Holdings, Ltd.
Date: April 29, 2008		/S/ JAMES P. BRYCE
	(Registrant)
		James P. Bryce President and Chief Executive Officer
Date: May 8, 2009	/s/ James P. Bryce
Date: April 29, 2008		/S/ JOHN R. WEALE
	James P. Bryce
		John R. Weale Senior Vice President and Chief Financial Officer
	President and Chief Executive Officer
Date: May 8, 2009	/s/ John R. Weale
	John R. Weale
	Executive Vice President and Chief Financial Officer

2231

EXHIBIT INDEX

ExhibitNumber	Methodof Filing	Description
3.1	(2)	Memorandum of Association of the Company
2.1	(1)	Agreement and Plan of Amalgamation, dated as of March 1, 2009, among IPC Holdings, Ltd., IPC Limited and Max Capital Group Ltd.
3.2	(3)	Amended and Restated Bye-Laws of the Company
2.2	(2)	First Amendment to Agreement and Plan of Amalgamation, dated as of March 5, 2009, among IPC Holdings, Ltd., IPC Limited and Max Capital Group Ltd.
3.3	(2)	Form of Memorandum of Increase of Share Capital
3.1	(4)	Memorandum of Association of the Company
10.1	(4)	First Amendment to Credit Agreement, dated as of January 25, 2008, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
3.2	(5)	Amended and Restated Bye-Laws of the Company
10.2	(5)	Custody Agreement by and between IPCRe Limited and Mellon Bank, N.A., dated January 9, 2008 and effective as of January 1, 2008.
3.3	(4)	Form of Memorandum of Increase of Share Capital
10.3	(5)	Discretionary Investment Management Agreement between AIG Investments Europe Ltd. and IPCRe Limited, dated January 9, 2008 and effective as of December 20, 2007.
10.1	(6)	First Amendment to Credit Agreement, dated as of January 25, 2008, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
11.1	(1)	Reconciliation of basic and diluted net income per common share (“EPS”)
10.2	(7)	Second Amendment and Consent to Credit Agreement, dated as of March 1, 2009, among IPC Holdings, Ltd., IPCRe Limited, the Lenders party thereto and Wachovia Bank, National Association.
12.1	(1)	Statement of Computation of Ratios of Earnings to Fixed Charges
10.3	(8)	Custody Agreement by and between IPCRe Limited and Mellon Bank, N.A., dated January 9, 2008 and effective as of January 1, 2008.
31.1	(1)	Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
10.4	(8)	Discretionary Investment Management Agreement between AIG Investments Europe Ltd. and IPCRe Limited, dated January 9, 2008 and effective as of December 20, 2007.
31.2	(1)	Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
10.7 †	(9)	Retirement and Consulting Agreement between IPCRe Limited and James P. Bryce
32.1	(6)	Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
10.8 †	(9)	Employment Agreement between IPCRe Limited and John R. Weale
32.2	(6)	Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
10.9 †	(9)	Employment Agreement between IPCRe Limited and Peter J.A. Cozens
10.10 †	(9)	Employment Agreement between IPCRe Limited and Stephen F. Fallon
10.11	(10)	Acknowledgement of receipt of an unsolicited letter dated, March 31, 2009, from Validus Holdings, Ltd. outlining a proposed transaction.
11.1	(3)	Reconciliation of basic and diluted net income per common share (“EPS”)
12.1	(3)	Statement of Computation of Ratios of Earnings to Fixed Charges
15.1	(3)	Letter regarding unaudited interim financial information
31.1	(3)	Certification by Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
31.2	(3)	Certification by Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
32.1	(11)	Certification by Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
32.2	(11)	Certification by Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002

(1) ~~Filed~~Incorporated ~~herewith~~by reference to Exhibit 2.1 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

~~(2)~~32 ~~Incorporated by reference to the corresponding exhibit on our Registration Statement on Form S-1 (No. 333-00088).~~

(32) Incorporated by reference to Exhibit 3.2.1 to our ~~quarterly~~Current ~~report~~Report on Form 108-QK ~~for the six months ended June 30, 2007~~ filed with the SEC on ~~July~~March 3010, ~~2007~~2009 (File No. 0-27662).

(43) ~~Incorporated~~Filed ~~by reference to Exhibit 10~~herewith.~~1 to our Current Report on Form 8-K filed with the SEC on January 31, 2008 (File No. 0-27662).~~

23(6) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 31, 2008 (File No. 0-27662).

(7)	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

(8)	Incorporated by reference to Exhibits 10.1 and 10.2 to our Current Report on Form 8-K filed with the SEC on January 14, 2008 (File No. 0-27662).

(9)	Incorporated by reference to Exhibits 10.2 to 10.5 to our Current Report on Form 8-K filed with the SEC on March 02, 2009 (File No. 0-27662).

(10)	Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on March 31, 2009 (File No. 0-27662).

(11)	These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (sub-sections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), and are not being filed as exhibits to this report.

†	Management contract or compensatory plan, contract or arrangement.

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