<PAGE> 1
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, 1999
OR
[ ] 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.)
AMERICAN INTERNATIONAL BUILDING, 29 RICHMOND ROAD, PEMBROKE, HM 08, BERMUDA
(Address of principal executive offices)
(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. Yes . x..No ........
The number of outstanding common shares par value U.S. $0.01 per share of IPC
Holdings, Ltd., as of May 6, 1999, was 25,033,932.
TOTAL PAGES 15
EXHIBIT INDEX LOCATED ON PAGE 13
1
<PAGE> 2
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)
<TABLE>
<CAPTION>
As of As of
March 31, 1999 December 31, 1998
-------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS:
Fixed maturity investments:
Available for sale, at fair market value
(Amortized cost 1999: $490,518; 1998:
$478,806) $490,854 $484,863
Equity investments, available for sale (Cost
1999: $53,564; 1998: $69,268) 75,611 94,152
Cash and cash equivalents 57,521 20,966
Reinsurance balances receivable (Related party
1999: $8,855; 1998: $3,653) 56,804 20,747
Funds held by reinsured companies 2,434 2,434
Deferred premiums ceded 2,129 0
Accrued investment income 11,908 14,752
Deferred acquisition costs 6,621 2,048
Prepaid expenses and other assets 4,222 3,129
-------------- -----------------
TOTAL ASSETS $708,104 $643,091
============== =================
LIABILITIES:
Reserve for losses and loss adjustment expenses $ 58,129 $ 52,226
Unearned premiums 58,428 17,602
Reinsurance balances payable (Related party
1999: $231; 1998: $0) 2,311 0
Deferred commissions 396 0
Investments pending settlement 16,027 0
Accounts payable and accrued liabilities
(Related party 1999: $1,554; 1998: $1,689) 8,151 7,311
-------------- -----------------
TOTAL LIABILITIES 143,442 77,139
-------------- -----------------
SHAREHOLDERS' EQUITY:
Share capital (Common shares outstanding, par
value U.S.$0.01 - 1999: 25,033,932; 1998:
25,033,932 shares) 250 250
Additional paid-in capital 299,833 299,833
Retained earnings 242,196 234,928
Accumulated other comprehensive income 22,383 30,941
-------------- -----------------
TOTAL SHAREHOLDERS' EQUITY 564,662 565,952
-------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $708,104 $643,091
============== =================
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE> 3
IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of United States dollars, except for per share amounts)
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
REVENUES: (Unaudited) (Unaudited)
Gross premiums written $ 65,315 $ 72,173
Premiums ceded (2,839) 0
------------- -------------
Net written premiums 62,476 72,173
Change in unearned premium reserve (38,698) (43,229)
------------- -------------
Net premiums earned 23,778 28,944
Net investment income 7,413 7,262
Realized gains (losses), net on investments 6,545 2,604
------------- -------------
TOTAL REVENUES 37,736 38,810
============= =============
EXPENSES:
Losses and loss adjustment expenses 16,773 4,125
Acquisition costs, net 3,370 3,260
General and administrative expenses 2,276 2,635
Exchange loss (gain) 101 (2)
------------- -------------
TOTAL EXPENSES 22,520 10,018
------------- -------------
NET INCOME $ 15,216 $ 28,792
============= =============
Basic net income per common share $ 0.61 $ 1.15
Diluted net income per common share $ 0.58 $ 1.08
Weighted average number of common share - basic 25,033,932 25,023,046
Weighted average number of common share -
diluted 26,172,696 26,697,683
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE> 4
IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of United States dollars)
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,216 $ 28,792
Adjustments to reconcile net income to cash provided
by operating activities:
Amortization of investment premium, net (17) 207
Realized (gains) losses, net on investments (6,545) (2,604)
Changes in, net:
Reinsurance balances receivable (36,057) (34,641)
Funds held by reinsured companies 0 (2,427)
Deferred premiums ceded (2,129) 0
Accrued investment income 2,844 2,657
Deferred acquisition costs (4,573) (5,469)
Prepaid expenses and other assets (1,093) (1,287)
Reserve for losses and loss adjustment expenses 5,903 320
Unearned premiums 40,826 43,229
Reinsurance balances payable 2,311 0
Deferred commissions 396 0
Accounts payable and accrued liabilities 840 1,331
------------- -------------
17,922 30,108
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed maturity investments (119,600) (100,636)
Proceeds from sale of fixed maturity investments 103,687 79,044
Proceeds from maturities of fixed maturity investments 20,500 5,000
Purchases of equity investments (1,547) (692)
Proceeds from sale of equity investments 23,541 10,597
------------- -------------
26,581 (6,687)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional share capital 0 300
Cash dividends paid to shareholders (7,948) (27,975)
------------- -------------
(7,948) (27,675)
------------- -------------
Net increase (decrease) in cash and cash equivalents 36,555 (4,254)
Cash and cash equivalents, beginning of period 20,966 9,746
------------- -------------
Cash and cash equivalents, end of period $ 57,521 $ 5,492
============= =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
4
<PAGE> 5
IPC HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of United States dollars)
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
Net income $15,216 $28,792
------------- -------------
Other comprehensive income:
Holding (losses ) gains, net on investments during period (2,013) 12,246
Reclassification adjustment for (gains) losses included in
net income (6,545) (2,604)
------------- -------------
(8,558) 9,642
------------- -------------
Comprehensive income $ 6,658 $38,434
============= =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
5
<PAGE> 6
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 United States generally accepted accounting
principles ("GAAP") and include the accounts of IPC Holdings, Ltd. (the
"Company"), and its wholly-owned subsidiaries, IPCRe Limited ("IPCRe") and
IPCRe Services Limited ("Services" and, together with the Company and IPCRe,
"IPC"). 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 three month periods
ended March 31, 1999 and 1998, respectively, the balance sheet at March 31,
1999 and the cash flows for the three month periods ended March 31, 1999 and
1998, respectively. These interim consolidated financial statements should
be read in conjunction with the audited consolidated financial statements for
the year ended December 31, 1998. The results of operations for any interim
period are not necessarily indicative of results for the full year.
2. DIVIDENDS:
On February 28, 1999, the Directors declared a quarterly dividend of $0.3175
per share, payable to shareholders of record on March 9, 1999. Such
dividends were paid March 25, 1999.
On April 27, 1999, the Directors declared a quarterly dividend of $0.3175 per
share, payable on June 24, 1999, to shareholders of record on June 8, 1999.
3. NET INCOME PER SHARE:
The Company has adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share", which requires dual presentation of basic and diluted
earnings per share. Diluted net income per common share is computed by
dividing net income by the weighted average number of shares of common stock
and common stock equivalents outstanding during the year. Stock options
granted to a shareholder of the Company were considered common stock
equivalents and were included in the number of weighted average shares
outstanding using the treasury stock method. Stock options granted to
employees on February 15, 1996, July 25, 1996, January 2, 1997, January 2,
1998 and January 5, 1999 were also considered common stock equivalents for
the purpose of calculating diluted net income per common share.
4. ACCOUNTING FOR DERIVATIVES:
The Financial Accounting Standards Board has also recently issued Statement
of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities," ("SFAS 133") which is effective for
periods beginning after June 15, 1999. Management does not expect the
impact of the adoption of SFAS 133 on the Company's financial position or
results of operations to be material.
5. DEPOSIT ACCOUNTING:
In October, 1998 the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position 98-7, "Accounting for Insurance and
Reinsurance Contracts that do not Transfer Insurance Risk", which is
effective for fiscal years beginning after June 15, 1999. IPCRe does not
currently write or cede business which would be affected by this Statement.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS, QUARTERS ENDED MARCH 31, 1999 AND 1998
In the quarters ended March 31, 1999 and 1998, IPCRe wrote gross premiums of
$65.3 million and $72.2 million, respectively, a decrease of 9.5%. Written
premiums were impacted by the following: rate reductions in the period,
generally in the range of 10% but as high as 15 to 20% in some cases; program
restructuring where ceding companies have consolidated; and the non-renewal of
some contracts by IPCRe, where the rates and/or terms were considered
unsatisfactory. These reductions, which totaled approximately $12.0 million,
were partially offset by increased signings and additional business from
existing clients, and selectively written business for new clients, which
totaled approximately $4.0 million. Premiums were also boosted by
reinstatement premiums from increased claim activity. Net premiums written
were also impacted by IPCRe's first cession to its proportional reinsurance
facility, which had the effect of reducing written premium by a further $2.8
million. Premiums earned in the three months ended March 31, 1999 were $23.8
million, compared to $28.9 million in the same period in 1998, a decrease of
17.8%. This reduction is primarily due to the decrease in net premiums
written.
Net investment income was $7.4 million in the quarter ended March 31, 1999,
compared to $7.3 million for the quarter ended March 31, 1998, an increase of
2.1%. The increase arises from the average amount of invested assets being
10.1% higher, offset by decreases in short term interest rates.
Net realized gains from the sale of investments in the quarter ended March 31,
1999 totaled $6.5 million, compared to $2.6 million in the corresponding
period of 1998. Net realized gains and losses fluctuate from period to
period, depending on the individual securities sold, as recommended by IPCRe's
investment advisor.
In the three months ended March 31, 1999, incurred losses were $16.8 million,
compared to $4.1 million in the corresponding period of 1998. Claim activity
in the three months ended March 31, 1999 included $6.3 million from the Rouge
Industries steel mill explosion in Michigan, as well as losses from crop hail
damage during 1998, storms which took place in Australia and Ireland in late
December 1998, the winter storms which took place in the mid-west United
States in January of this year, as well as some development from Hurricanes
Georges and Mitch and Typhoon Vicki. IPC's loss and loss expense ratio (the
ratio of losses and loss adjustment expenses to premiums earned) was 70.5% in
the first quarter of 1999 compared to 14.2% in the corresponding period of
1998.
Acquisition costs incurred, which consist primarily of commissions and
brokerage fees paid to intermediaries for the production of business, were
$3.4 million for the quarter ended March 31, 1999, compared to $3.3 million in
the same period of 1998. Certain contracts have been written with profit
commission clauses or "no claims" bonuses, which return a portion of the net
underwriting profits generated from those contracts as a commission to the
insureds. This has resulted in an increase in the level of acquisition cost
as a percentage of premiums earned. General and administrative expenses were
$2.3 million in the quarter ended March 31, 1999, compared to the $2.6 million
incurred in the corresponding period in 1998. IPC's expense ratio (the ratio
of acquisition costs plus general and administrative expenses to premiums
earned) was 23.8% for the quarter ended March 31, 1999 compared to 20.4% for
the corresponding period in 1998.
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 March 31, 1999 and 1998, respectively:
Quarter ended March 31,
1999 1998
----- -----
Loss & loss expense ratio 70.5% 14.2%
Expense ratio 23.8% 20.4%
Combined ratio 94.3% 34.6%
Net income for the quarter ended March 31, 1999 was $15.2 million, compared
to $28.8 million for the corresponding period in 1998, a decrease of 47.2%.
Excluding the effects of net realized gains and losses arising from the sale
of investments, net operating income for the first quarter of 1999 was $8.7
million, compared to $26.2 million for the first quarter of 1998, a decrease
of 66.9%. The decrease is a result of the reduction of premium income,
combined with increases in claims and expenses, as discussed above.
7
<PAGE> 8
LIQUIDITY AND CAPITAL RESOURCES
The Company is a holding company that conducts no reinsurance operations of
its own. The Company's cash flows are limited to distributions from IPCRe
and Services by way of loans or dividends. The dividends that IPCRe may pay
are limited under Bermuda legislation and IPCRe's revolving credit facility.
The Bermuda Insurance Act of 1978, and subsequent amendments thereto
("Bermuda regulations"), require IPCRe to maintain a minimum solvency margin
and a minimum liquidity ratio. The maximum dividend payable by IPCRe in
accordance with Bermuda regulations as of January 1, 1999 was approximately
$141 million.
IPCRe's sources of funds consist of premiums written, investment income 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 and 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 the Company's cash flows may fluctuate significantly from
period to period.
Cash flows from operating activities in the first three months of 1999 were
$17.9 million compared to $30.1 million in the first three months of 1998,
which represents a decrease of 40.5%. The decrease arises primarily from
the reduction in operating income, as noted above.
Net cash flows generated from investing activities in the first three months
of 1999 were $26.6 million. In addition, $7.9 million were paid to
shareholders in dividends on March 25, 1999. Cash and cash equivalents
increased by $36.6 million in the three months, resulting in a balance of
$57.5 million at March 31, 1999. At March 31, 1999, 50% of IPC's fixed
maturity portfolio (based on market value) was held in cash, United States
Treasury notes and in securities rated AAA, and 39% was held in securities
rated AA. The average modified duration of IPC's fixed maturity portfolio
was 2.7 years. IPC's portfolio does not contain any investments in real
estate or mortgage loans. Management believes that IPCRe's $300 million
revolving credit facility, and the relatively high quality of its investment
portfolio, provides sufficient liquidity to meet IPC's cash demands.
YEAR 2000 READINESS DISCLOSURE STATEMENT
Certain computer programs use only the last two digits to refer to a
year. Therefore, these computer programs do not properly recognize the
century in which a particular year occurs and may, for example, treat "00" as
being the year 1900, instead of the year 2000. These computer programs may
be used in software applications or may be embedded in microprocessors used
to control the operation of computer hardware and other devices. If not
corrected, many computer programs could fail or create erroneous results.
This problem is commonly known as the "Y2K", "Millennium Bug" and/or "Year
2000" issue and systems and equipment which use computer programs and
microprocessors that do not have this problem are generally referred to as
being "compliant".
IPC's Critical Systems
IPC believes that all of its critical systems, including its hardware
and software, are currently compliant. IPC's critical systems include those
used in assessing underwriting risk, recording policy details, processing
related premium and claims transactions and communicating with brokers who
produce the business. Following minor remedial work to some computer
hardware and the upgrading of some software, a test programme was undertaken
on these systems and the results were completed by September 30, 1998 and
subjected to audit by technology consultants provided through American
International Group, Inc. ("AIG"). Accordingly, while there can be no
assurance that these systems will be free from failure, IPC believes that any
failure will not result in material adverse impact on IPC's results of
operations or financial condition.
Third Party Dependencies
IPC's Y2K compliance programme also includes a review of third party
dependencies, which includes non-information technology areas, including
office equipment, power supply, telecommunications and building
infrastructure.
Administrative Services
IPC's day-to-day administrative services, including the provision of
non-information technology, are performed by American International Company,
Limited ("AICL"), a wholly-owned subsidiary of AIG, pursuant to an
administrative services agreement (the "Administrative Services Agreement").
Services and facilities provided pursuant to the Administrative Services
Agreement include legal and accounting services, office space in Bermuda, the
use of office equipment, electronic data services and other services required
by IPC in the ordinary course of business. IPC and AICL have worked jointly
to ensure compliance of systems used in the processing of IPC's business and
this work was successfully completed by September 30, 1998.
8
<PAGE> 9
In addition, AICL is monitoring progress towards compliance by
significant third parties from whom IPC receives non-information technology
services, such as the suppliers of electric power and local and long-distance
telephone services. In the event that such third parties are unable to
achieve compliance, AICL has developed contingency plans, for example,
independent power supply, which are designed to mitigate the effects of a
failure on the part of such third parties to supply services.
Accordingly, while there can be no assurance that these systems will be
free from failure, IPC believes that any failure will not result in material
adverse impact on IPC's results of operations or financial condition.
Other Third Parties
As of March 31, 1999, IPC has contacted other third parties, such as
brokers and depository institutions, with whom IPC currently has a
relationship which, in IPC's judgement, involves material Y2K compliance
concerns, in order to establish their degree of compliance and/or their plans
to become compliant prior to December 31, 1999. Among other things, IPC's
brokers collect, and maintain records of, premiums and claims and, as such,
make payments into IPC's depository institutions. Prior to June 30, 1999,
IPC intends to develop contingency plans to mitigate the effects of failure
of such third party systems on IPC's business operations. There can be no
assurance that the systems of such third parties will be timely converted,
that IPC will be able to develop satisfactory contingency plans or that
failure of such systems in any event would not have a material adverse effect
on IPC's results of operations or financial condition.
Costs
The costs incurred by IPC up to March 31, 1999 in effecting Y2K
compliance of its own systems are nominal and it is not anticipated that the
future costs of IPC's Year 2000 evaluation and compliance implementation will
be material. In addition, AICL is responsible for the cost of compliance of
the administrative services it supplies to IPC. Therefore, assuming
compliance has been achieved as aforesaid, it is not anticipated that the
total costs incurred in relation to the Y2K issue will have a material
adverse effect on IPC's results of operations.
Policy Risks
The extent of worldwide property damage (whether insured or uninsured)
which could result from failure or malfunction of non-compliant systems is
not known. Many of the insurance markets around the world in which IPC's
clients operate have not established a clear position on whether to include
or exclude Y2K risk in policies available in those markets. Although Y2K
exclusion clauses have been produced by some individual companies and some
insurance and reinsurance industry associations, to date they have not been
applied in a uniform manner. The Y2K issue is unique. Therefore,
notwithstanding the presence or absence of an exclusion of the Y2K risk in
insurance or reinsurance policies, in the general absence of legal precedent,
courts may determine, on a case-by-case basis, that coverage exists for
property damage resulting from failure or malfunction of non-compliant
systems.
IPCRe is principally an excess of loss property catastrophe reinsurer.
Currently, IPCRe's reinsurance policies do not specifically include Y2K as a
covered event and IPCRe currently does not intend to provide specific
coverage for losses arising from Y2K events. However, in the future, it is
possible that market forces could oblige IPCRe to provide such coverage, or
that certain of IPCRe's policies could be held to cover such losses. IPC
carefully monitors the terms of policy renewals with respect to the extent
that they oblige IPC to provide such coverage and, with respect to the
January 1, 1999 renewals, declined certain business. Regardless of IPCRe's
intent not to provide specific coverage for losses arising from Y2K events
and IPCRe's actions to avoid obligations to provide such coverage, if IPCRe
is obliged to provide such coverage or its policies are held to cover such
losses, there can be no assurance that such losses would not have a material
adverse effect on IPCRe's future results of operations or financial
condition, commencing in the year 2000.
9
<PAGE> 10
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
IPCRe commissioned an independent Value at Risk analysis, to estimate the
maximum potential loss of fair value for each segment of market risk, as of
December 31, 1998. There were no material changes to the composition of
IPCRe's investment portfolio during the quarter ended March 31, 1999. The
equity element of the total portfolio was reduced from approximately 15% to 12%
in February, 1999, and the proceeds were used to purchase money-market
instruments. In addition, there were no material changes to interest rates or
foreign exchange rates in the quarter.
Accordingly, management does not believe that there has been any material
change to the amount of market risk to which the Company is exposed, in the
period from January 1 to March 31, 1999.
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 Exchange Act. Forward-looking statements are statements other than
historical information or statements of current condition. Some
forward-looking statements may be identified by use of terms such as
"believes", "anticipates", "intends", or "expects". These forward-looking
statements relate to Year 2000 issues and the effect of the future adoption of
accounting standards. 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 the Company or any other person
that the objectives or plans of the Company will be achieved. Numerous
factors could cause the Company's actual results to differ materially from
those in the forward-looking statements, including unanticipated consequences
of the Millennium bug with respect to IPC or third parties.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
10
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Unless otherwise indicated, exhibits are incorporated by reference
to the corresponding numbered exhibits to the Company's
Registration Statement on Form S-1 incorporated by reference to the
corresponding numbered (Registration No. 333-00088).
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 Memorandum of Association of the Company
3.2 Amended and Restated Bye-laws of the Company
3.3 Form of Memorandum of Increase of Share Capital
11.1 * Reconciliation of the numerator and denominator for
basic and diluted net income per common share ("EPS").
27.1 * Financial Data Schedule
* Filed herewith
(b) Reports on Form 8-K
NONE
11
<PAGE> 12
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)
DATE MAY 6, 1999 /s/ John P. Dowling
- ----------------- -----------------------------------------------
JOHN P. DOWLING
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DATE MAY 6, 1999 /s/ John R. Weale
- ----------------- -----------------------------------------------
JOHN R. WEALE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
12
<PAGE> 13
EXHIBIT INDEX
Unless otherwise indicated, exhibits are incorporated by reference to
the corresponding numbered exhibits to the Company's Registration Statement
on Form S-1 (Registration No. 333-00088).
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Memorandum of Association of the Company
3.2 Amended and Restated Bye-laws of the Company
3.3 Form of Memorandum of Increase of Share Capital
11.1 * Reconciliation of the numerator and denominator for basic
and diluted net income per common share ("EPS")
27.1 * Financial Data Schedule
* Filed herewith
13
<PAGE> 1
EXHIBIT 11.1
IPC HOLDINGS, LTD. AND SUBSIDIARIES
RECONCILIATION OF BASIC AND DILUTED NET INCOME PER COMMON SHARE
(Expressed in thousands of United States dollars, except for per share amounts)
A reconciliation of the numerator and denominator for basic and diluted EPS is
given in the following table:
BASIC
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1999 1998
-------------- ------------
(unaudited) (unaudited)
<S> <C> <C>
Net income $ 15,216 $ 28,792
Common shares outstanding at January 1, 25,033,932 25,017,603
Common shares outstanding at March 31, 25,033,932 25,033,932
Weighted average common shares outstanding 25,033,932 25,023,046
Net income per common share $ 0.61 $ 1.15
DILUTED
Net income $ 15,216 $ 28,792
Weighted average common shares outstanding 25,033,932 25,023,046
Dilutive effect of share options 1,138,764 1,674,637
------------- ------------
Total 26,172,696 26,697,683
============= ============
Net income per common share $ 0.58 $ 1.08
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM 10-Q OF IPC HOLDINGS, LTD. FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FINANCIAL STATEMENTS (AND THE
NOTES THERETO) CONTAINED IN SUCH REPORT.
<S> <C>
</LEGEND>
<MULTIPLIER> 1000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 490,854
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 75,611
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 578,359
<CASH> 57,521
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 6,621
<TOTAL-ASSETS> 708,104
<POLICY-LOSSES> 58,129
<UNEARNED-PREMIUMS> 58,428
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
<COMMON> 250
0
0
<OTHER-SE> 564,412
<TOTAL-LIABILITY-AND-EQUITY> 708,104
23,778
<INVESTMENT-INCOME> 7,413
<INVESTMENT-GAINS> 6,545
<OTHER-INCOME> 0
<BENEFITS> 16,773
<UNDERWRITING-AMORTIZATION> 3,370
<UNDERWRITING-OTHER> 2,276
<INCOME-PRETAX> 15,216
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,216
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,216
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.58
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
