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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the quarterly period ended: September 30, 2002

OR

For the transition period from ................................... to ...................................

Commission file number: 0-27662

IPC Holdings, Ltd.

American International Building, 29 Richmond Road, Pembroke, HM 08, Bermuda

(441) 298-5100

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

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

Exhibit Index located on page 18

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

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

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

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

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

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

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

(Expressed in thousands of United States dollars)

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

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

(Expressed in thousands of United States dollars)

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

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IPC HOLDINGS, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1.		GENERAL:
		The consolidated interim financial statements presented herein have been prepared on the basis of accounting principles generally accepted in the United States of America and include the accounts of IPC Holdings, Ltd. (the “Company”), and its wholly owned subsidiaries, IPCRe Limited (“IPCRe”) and IPCRe Underwriting Services Limited (“IPCUSL” and, together with the Company and IPCRe, “IPC”) and IPCRe Europe Limited, which is a wholly-owned subsidiary of IPCRe. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the nine month periods ended September 30, 2002 and 2001, respectively, the balance sheet as of September 30, 2002 and the cash flows for the nine month periods ended September 30, 2002 and 2001, respectively. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2001. The results of operations for any interim period are not necessarily indicative of results for the full year.
2.		DIVIDENDS:
		No dividends have been declared or paid in 2002 to date.

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

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

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

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

		RESULTS OF OPERATIONS, NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
		Our net income for the nine months ended September 30, 2002 was $137.9 million, compared to a net loss of $(24.2) million for the corresponding period in 2001. Excluding the effects of net realized gains and losses arising from investments, net operating income for the first nine months of 2002 was $146.2 million, compared to a net operating loss of $(30.4) million for the first nine months of 2001. This increase is primarily the result of higher premiums and lower loss ratio, as discussed below. In 2001, results were significantly impacted by losses caused by the attack on the World Trade Center.
		In the nine months ended September 30, 2002 and 2001, we wrote premiums of $242.7 million and $125.7 million, respectively, an increase of 93.1%. Written premiums in the nine months were higher due to the utilization of our increased capacity resulting from the additional capital that we raised in December 2001. We wrote an additional $83.2 million for our existing clients, and $61.7 million for new clients. New business premiums included $0.9 million from a contract which provides catastrophic workers’ compensation and life coverage, and $7.5 million in respect of participations in terrorist property cover pools. The increase also includes the impact of increases in premium rates, which were generally in the range of 10% to 20% for loss-free contracts, and greater increases for loss-impacted contracts. These increases were partly offset by business which was not renewed because of unsatisfactory terms and conditions which totaled approximately $13.5 million. Written premiums in the nine months ended 2001 included $19.2 million of reinstatement premiums, of which $17.0 million related to programs impacted by World Trade Center losses. We ceded premiums of $5.6 million to IPCRe’s proportional reinsurance facilities in the first nine months of 2002, compared to $4.1 million ceded in the first nine months of 2001. Net premiums earned in the nine months ended September 30, 2002 were $165.8 million, compared to $94.4 million in the same period in 2001, an increase of 75.6%. Earned premiums were higher due to the significant increase in written premiums.
		Net investment income was $37.4 million in the nine months ended September 30, 2002, compared to $23.5 million for the nine months ended September 30, 2001, an increase of 59.0%. This increase is a result of the 103.1% increase in the average amount of invested assets, offset by the effect of the reduction in the average yield generated by the portfolio.