Full Description

IPC Holdings, Ltd. (IPC) provides property catastrophe reinsurance and, to a limited extent, property-per-risk excess, aviation (including satellite) and other short-tail reinsurance on a worldwide basis. The Company provides treaty reinsurance principally to insurers of personal and commercial property worldwide. During the year ended December 31, 2008, approximately 93% of the Company’s gross premiums written, excluding reinstatement premiums, covered property catastrophe reinsurance risks. The Company’s principle types of reinsurance products are catastrophe excess of loss reinsurance, risk excess of loss reinsurance, retrocessional reinsurance and aviation reinsurance, including satellite. In September 2009, Validus Holdings, Ltd. completed the acquisition of IPC.

Catastrophe Excess of Loss Reinsurance

Catastrophe excess of loss reinsurance provides coverage to a primary insurer when aggregated claims and claim expenses from an occurrence of a peril, covered under a portfolio of primary insurance contracts written by the primary insurer, exceed the attachment point specified in the reinsurance contract with the primary insurer. The primary insurer can then recover up to the limit of reinsurance it has elected to buy for each layer.

Risk Excess of Loss Reinsurance

To a lesser extent, the Company also writes risk excess of loss property reinsurance. This reinsurance responds to a loss of the reinsured in excess of its retention level on a single risk, rather than to aggregated losses for all covered risks. A risk in this context might mean the insurance coverage on one building or a group of buildings or the insurance coverage under a single policy, which the reinsured treats as a single risk.

Retrocessional Reinsurance

The Company also provides reinsurance cover to other reinsurance companies, which is known as retrocessional protection. Most of the underlying risks retroceded arise from property catastrophe excess of loss contracts.

Aviation Reinsurance

The Company also writes a small amount of short-tail aviation reinsurance on proportional and excess of loss bases. Although they primarily involve property damage, these aviation risks may involve casualty coverage arising from the same event causing the property damage. In 2008, this included business written in four pro rata satellite contracts, where the underlying insurance is written on an excess of loss basis.

Other Lines of Business

Other lines include a reinsurance quota share of kidnap and ransom and related exposures. It also includes some marine excess of loss reinsurance contracts, surety and some miscellaneous property reinsurance covers, on both a pro rata and excess of loss basis.