IPC Holdings, Ltd. Reports First Quarter 2001 Earnings; Operating Income $0.76 versus $0.40 in 2000

Apr 24, 2001, 01:00 ET from IPC Holdings, Ltd.

    PEMBROKE, Bermuda, April 24 /PRNewswire/ -- IPC Holdings, Ltd.
 (Nasdaq:   IPCR) today reported operating income, which excludes net realized
 gains, of $20.0 million or $0.76 per share, for the quarter ended March 31,
 2001, compared to $10.0 million, or $0.40 per share, for the first quarter of
 2000.
     President and Chief Executive Officer Jim Bryce commented: "It is
 gratifying to report that the improvements in pricing and other conditions
 that we have previously noted, are reflected in our premium growth this
 quarter. In addition, we can report that the improvements in market conditions
 have continued into the second quarter of 2001 to date at a similar level.
 During the past quarter we have also benefitted from cedants' more focused
 emphasis on quality, which presented opportunities to write new business, and
 additional business for some of our existing clients. This increase in
 revenues, together with another relatively benign quarter in terms of
 catastrophe activity, resulted in IPC returning to one of our strongest
 quarters for approximately three years. We have also continued our strategy of
 not renewing business where terms and conditions are not improving to our
 satisfaction, and re-deploying our capacity accordingly."
     Gross written premiums were $65.6 million in the first quarter of 2001,
 compared to $57.8 million written in the first quarter of 2000, an increase of
 13.5%. Premiums were higher because of rate increases, generally in the range
 of 10% to 25% for loss free contracts, with greater increases on loss impacted
 contracts. In addition, IPC wrote premiums for new business and additional
 business for existing clients, which offset business which was not renewed
 because of unsatisfactory terms and conditions, reductions due to declining
 rates of exchange for certain currencies, as well as a decrease in
 reinstatement premiums. Premiums ceded to IPCRe's pro rata retrocessional
 facility in the quarter ended March 31, 2001 were $0.9 million compared to
 $1.4 million in the quarter ended March 31, 2000.
     Net premiums earned in the quarter ended March 31, 2001 were
 $24.5 million, compared to $22.7 million earned in the quarter ended March 31,
 2000, an increase of 7.7%.  The increase in earned premiums is primarily due
 to the increase in written premiums over the past three quarters.  Net
 investment income was $8.1 million in the three months ended March 31, 2001,
 compared to $7.6 million first quarter of 2000.  Investment income was higher
 in the period because of a 4.1% increase in the average amount of invested
 assets, as well as a small increase in the yield of the portfolio, compared to
 the first quarter of 2000.
     Net loss and loss adjustment expenses incurred were $7.0 million in the
 quarter ended March 31, 2001, compared to $14.9 million for the quarter ended
 March 31, 2000, a reduction of 53.2%.   Losses in the first quarter of 2001
 included estimated provisions for moderate events such as the earthquakes in
 Seattle and Hiroshima, winter storms in the U.S. and storms in Australia, as
 well as a provision for indexed loss contracts for prior periods.  In the
 first quarter of 2000, losses were incurred from events including cyclones
 Lothar and Martin and Typhoon Bart.
     Acquisition costs and general and administrative expenses totaled
 $5.2 million for the quarter ended March 31, 2001, compared to $5.2 million in
 the first quarter of 2000.  Acquisition costs have increased because of the
 increase in earned premiums, together with the fact that in the first quarter
 of 2000 there was a reduction in an accrual for profit commissions, because of
 claims that were reported on contracts containing such provisions.  This
 increase has been offset by reductions in our general and administrative
 expenses, primarily the result of some expense savings.
     Net income, which includes net realized gains and losses from the sale of
 investments, was $23.9 million, or $0.91 per share for the three months ended
 March 31, 2001, compared to $9.8 million, or $0.39 per share, for the three
 months ended March 31, 2000.
     Total assets at March 31, 2001 were $711.1 million, an increase of 9.8%
 over total assets at December 31, 2000.  At March 31, 2001 total shareholders'
 investment was $580.9 million, compared to $559.3 million at December 31,
 2000, an increase of 3.9%.
     IPC's management will be holding a conference call to discuss these first
 quarter results at 8:30 EDT tomorrow, April 25, 2001.  This conference call
 will be broadcast simultaneously on the Internet at www.streetfusion.com, and
 a replay of the call will also be available at this site until 12:00 midnight
 EDT on Saturday, April 28, 2001.
 
     This press release contains forward-looking statements, including
 expectations regarding market conditions, the impact of current market
 conditions and trends on future periods, the impact of our business strategy
 on our results and trends in pricing and claims activity.  These
 forward-looking statements are based on a number of assumptions that are
 subject to risk and uncertainty, including potential market response to losses
 from catastrophic events, discontinuation of current market conditions or
 trends, and the effects of losses on our results of operations.  In addition,
 the largest single factor in our results has been and will continue to be the
 severity or frequency of catastrophic events, which is inherently
 unpredictable.  Our actual results and market response may be materially
 different from those expressed or implied by such forward-looking statements.
 
     IPC Holdings, Ltd., through its wholly-owned subsidiary IPCRe Limited,
 provides property catastrophe reinsurance and, to a limited extent, marine,
 aviation, property-per-risk excess and other short-tail property reinsurance
 on a worldwide basis.
 
                       IPC HOLDINGS, LTD. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
 
       (Expressed in thousands of U.S.dollars, except for per share amounts)
 
                                                      As of            As of
                                                    March 31,    December 31,
                                                      2001              2000
     ASSETS:                                       (unaudited)       (audited)
 
     Fixed maturity investments:
        Available for sale, at fair market
        value                                       $521,302          $523,660
     Equity investments, available for sale           94,981            65,462
     Cash and cash equivalents                        13,716             9,409
     Reinsurance balances receivable                  56,258            25,419
     Deferred premiums ceded                           1,058             1,120
     Loss reserves recoverable                           962             1,187
     Accrued investment income                        11,716            15,304
     Deferred acquisition costs                        6,487             2,249
     Prepaid expenses and other assets                 4,620             3,680
       Total assets                                 $711,100          $647,490
 
     LIABILITIES:
 
     Reserve for losses and loss adjustment
      expenses                                       $62,192           $61,358
     Unearned premiums                                59,224            19,068
     Reinsurance balances payable                      1,471               920
     Deferred commissions                                196               202
     Accounts payable and accrued
      liabilities                                      7,098             6,672
       Total liabilities                             130,181            88,220
 
     SHAREHOLDERS' INVESTMENT:
 
     Share capital  (Common shares
      outstanding, par value U.S.$0.01)                  251               250
     Additional paid in capital                      300,305           299,929
     Retained earnings                               278,416           254,511
     Accumulated other comprehensive income            1,947             4,580
       Total shareholders' equity                    580,919           559,270
 
       Total liabilities and
       Shareholders' equity                         $711,100          $647,490
 
            Diluted book value per common
             share                                    $22.11            $21.93
 
 
                      IPC HOLDINGS, LTD. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
 
                         (Expressed in thousands of U.S
                            dollars, except for per
                                 share amounts)
 
 
 
                                                Three months ended March 31,
                                                       2001              2000
     REVENUES:                                    (Unaudited)       (Unaudited)
 
     Gross premiums written                          $65,622           $57,833
     Premiums ceded                                     (917)           (1,355)
     Net premiums written                             64,705            56,478
     Change in unearned premiums, net                (40,218)          (33,751)
     Net premiums earned                              24,487            22,727
     Net investment income                             8,061             7,587
     Realized gains (losses), net on
      investments                                      3,864              (143)
       Total revenues                                 36,412            30,171
 
     EXPENSES:
 
     Losses and loss adjustment expenses,
      net                                              6,967            14,912
     Acquisition costs, net                            3,047             2,491
     General and administrative expenses               2,124             2,680
     Exchange loss                                       369               277
       Total expenses                                 12,507            20,360
 
     NET INCOME                                      $23,905            $9,811
 
 
     Basic net income per common share                 $0.95             $0.39
     Diluted net income per common share               $0.91             $0.39
 
     Operating income per common share
      (diluted)                                        $0.76             $0.40
 
     Weighted average number of common
      shares - basic                              25,060,623        25,033,932
     Weighted average number of common
      shares - diluted                            26,269,689        25,101,570
 
     Loss and loss expense ratio                       28.5%             65.6%
     Expense ratio                                     21.1%             22.8%
     Combined ratio                                    49.6%             88.4%
 
 

SOURCE IPC Holdings, Ltd.
    PEMBROKE, Bermuda, April 24 /PRNewswire/ -- IPC Holdings, Ltd.
 (Nasdaq:   IPCR) today reported operating income, which excludes net realized
 gains, of $20.0 million or $0.76 per share, for the quarter ended March 31,
 2001, compared to $10.0 million, or $0.40 per share, for the first quarter of
 2000.
     President and Chief Executive Officer Jim Bryce commented: "It is
 gratifying to report that the improvements in pricing and other conditions
 that we have previously noted, are reflected in our premium growth this
 quarter. In addition, we can report that the improvements in market conditions
 have continued into the second quarter of 2001 to date at a similar level.
 During the past quarter we have also benefitted from cedants' more focused
 emphasis on quality, which presented opportunities to write new business, and
 additional business for some of our existing clients. This increase in
 revenues, together with another relatively benign quarter in terms of
 catastrophe activity, resulted in IPC returning to one of our strongest
 quarters for approximately three years. We have also continued our strategy of
 not renewing business where terms and conditions are not improving to our
 satisfaction, and re-deploying our capacity accordingly."
     Gross written premiums were $65.6 million in the first quarter of 2001,
 compared to $57.8 million written in the first quarter of 2000, an increase of
 13.5%. Premiums were higher because of rate increases, generally in the range
 of 10% to 25% for loss free contracts, with greater increases on loss impacted
 contracts. In addition, IPC wrote premiums for new business and additional
 business for existing clients, which offset business which was not renewed
 because of unsatisfactory terms and conditions, reductions due to declining
 rates of exchange for certain currencies, as well as a decrease in
 reinstatement premiums. Premiums ceded to IPCRe's pro rata retrocessional
 facility in the quarter ended March 31, 2001 were $0.9 million compared to
 $1.4 million in the quarter ended March 31, 2000.
     Net premiums earned in the quarter ended March 31, 2001 were
 $24.5 million, compared to $22.7 million earned in the quarter ended March 31,
 2000, an increase of 7.7%.  The increase in earned premiums is primarily due
 to the increase in written premiums over the past three quarters.  Net
 investment income was $8.1 million in the three months ended March 31, 2001,
 compared to $7.6 million first quarter of 2000.  Investment income was higher
 in the period because of a 4.1% increase in the average amount of invested
 assets, as well as a small increase in the yield of the portfolio, compared to
 the first quarter of 2000.
     Net loss and loss adjustment expenses incurred were $7.0 million in the
 quarter ended March 31, 2001, compared to $14.9 million for the quarter ended
 March 31, 2000, a reduction of 53.2%.   Losses in the first quarter of 2001
 included estimated provisions for moderate events such as the earthquakes in
 Seattle and Hiroshima, winter storms in the U.S. and storms in Australia, as
 well as a provision for indexed loss contracts for prior periods.  In the
 first quarter of 2000, losses were incurred from events including cyclones
 Lothar and Martin and Typhoon Bart.
     Acquisition costs and general and administrative expenses totaled
 $5.2 million for the quarter ended March 31, 2001, compared to $5.2 million in
 the first quarter of 2000.  Acquisition costs have increased because of the
 increase in earned premiums, together with the fact that in the first quarter
 of 2000 there was a reduction in an accrual for profit commissions, because of
 claims that were reported on contracts containing such provisions.  This
 increase has been offset by reductions in our general and administrative
 expenses, primarily the result of some expense savings.
     Net income, which includes net realized gains and losses from the sale of
 investments, was $23.9 million, or $0.91 per share for the three months ended
 March 31, 2001, compared to $9.8 million, or $0.39 per share, for the three
 months ended March 31, 2000.
     Total assets at March 31, 2001 were $711.1 million, an increase of 9.8%
 over total assets at December 31, 2000.  At March 31, 2001 total shareholders'
 investment was $580.9 million, compared to $559.3 million at December 31,
 2000, an increase of 3.9%.
     IPC's management will be holding a conference call to discuss these first
 quarter results at 8:30 EDT tomorrow, April 25, 2001.  This conference call
 will be broadcast simultaneously on the Internet at www.streetfusion.com, and
 a replay of the call will also be available at this site until 12:00 midnight
 EDT on Saturday, April 28, 2001.
 
     This press release contains forward-looking statements, including
 expectations regarding market conditions, the impact of current market
 conditions and trends on future periods, the impact of our business strategy
 on our results and trends in pricing and claims activity.  These
 forward-looking statements are based on a number of assumptions that are
 subject to risk and uncertainty, including potential market response to losses
 from catastrophic events, discontinuation of current market conditions or
 trends, and the effects of losses on our results of operations.  In addition,
 the largest single factor in our results has been and will continue to be the
 severity or frequency of catastrophic events, which is inherently
 unpredictable.  Our actual results and market response may be materially
 different from those expressed or implied by such forward-looking statements.
 
     IPC Holdings, Ltd., through its wholly-owned subsidiary IPCRe Limited,
 provides property catastrophe reinsurance and, to a limited extent, marine,
 aviation, property-per-risk excess and other short-tail property reinsurance
 on a worldwide basis.
 
                       IPC HOLDINGS, LTD. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
 
       (Expressed in thousands of U.S.dollars, except for per share amounts)
 
                                                      As of            As of
                                                    March 31,    December 31,
                                                      2001              2000
     ASSETS:                                       (unaudited)       (audited)
 
     Fixed maturity investments:
        Available for sale, at fair market
        value                                       $521,302          $523,660
     Equity investments, available for sale           94,981            65,462
     Cash and cash equivalents                        13,716             9,409
     Reinsurance balances receivable                  56,258            25,419
     Deferred premiums ceded                           1,058             1,120
     Loss reserves recoverable                           962             1,187
     Accrued investment income                        11,716            15,304
     Deferred acquisition costs                        6,487             2,249
     Prepaid expenses and other assets                 4,620             3,680
       Total assets                                 $711,100          $647,490
 
     LIABILITIES:
 
     Reserve for losses and loss adjustment
      expenses                                       $62,192           $61,358
     Unearned premiums                                59,224            19,068
     Reinsurance balances payable                      1,471               920
     Deferred commissions                                196               202
     Accounts payable and accrued
      liabilities                                      7,098             6,672
       Total liabilities                             130,181            88,220
 
     SHAREHOLDERS' INVESTMENT:
 
     Share capital  (Common shares
      outstanding, par value U.S.$0.01)                  251               250
     Additional paid in capital                      300,305           299,929
     Retained earnings                               278,416           254,511
     Accumulated other comprehensive income            1,947             4,580
       Total shareholders' equity                    580,919           559,270
 
       Total liabilities and
       Shareholders' equity                         $711,100          $647,490
 
            Diluted book value per common
             share                                    $22.11            $21.93
 
 
                      IPC HOLDINGS, LTD. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
 
                         (Expressed in thousands of U.S
                            dollars, except for per
                                 share amounts)
 
 
 
                                                Three months ended March 31,
                                                       2001              2000
     REVENUES:                                    (Unaudited)       (Unaudited)
 
     Gross premiums written                          $65,622           $57,833
     Premiums ceded                                     (917)           (1,355)
     Net premiums written                             64,705            56,478
     Change in unearned premiums, net                (40,218)          (33,751)
     Net premiums earned                              24,487            22,727
     Net investment income                             8,061             7,587
     Realized gains (losses), net on
      investments                                      3,864              (143)
       Total revenues                                 36,412            30,171
 
     EXPENSES:
 
     Losses and loss adjustment expenses,
      net                                              6,967            14,912
     Acquisition costs, net                            3,047             2,491
     General and administrative expenses               2,124             2,680
     Exchange loss                                       369               277
       Total expenses                                 12,507            20,360
 
     NET INCOME                                      $23,905            $9,811
 
 
     Basic net income per common share                 $0.95             $0.39
     Diluted net income per common share               $0.91             $0.39
 
     Operating income per common share
      (diluted)                                        $0.76             $0.40
 
     Weighted average number of common
      shares - basic                              25,060,623        25,033,932
     Weighted average number of common
      shares - diluted                            26,269,689        25,101,570
 
     Loss and loss expense ratio                       28.5%             65.6%
     Expense ratio                                     21.1%             22.8%
     Combined ratio                                    49.6%             88.4%
 
 SOURCE  IPC Holdings, Ltd.