Bermuda- based IPC Holdings, Ltd. reported that its operating income, which excludes net realized gains and losses, rose to $44.3 million or $0.92 per share, for the quarter ended March 31, 2002, compared to $20.0 million, or $0.76 per share, for the first quarter of 2001. IPC wrote $147 million in gross premiums during the quarter, an increase of 124.1% over the $65.6 million it wrote in the same period last year. The increases came as a result of higher premiums and an increase in capacity.
IPC wrote additional business with existing clients and new business, offsetting “business which we did not renew because of unsatisfactory terms and conditions, and reductions due to declining rates of exchange for certain currencies.” The company indicated that rate increases on “loss free contracts” were between 15 and 20 percent with even greater increases on policies where there had been losses.
President and CEO Jim Bryce commented, that “2002 is potentially a landmark year for IPC. We started the year with our significantly increased capital base of over $1.1 billion, thanks to the success of our equity offering in December 2001. As a result of our increased capital, we were able to satisfy our existing clients’ requirements for a greater amount of the A+ rated capacity that so many of them were seeking.”
Bryce also indicated that IPC’s new position as the exclusive underwriting agent with respect to property catastrophe reinsurance of Allied World Assurance Co., formed in December by AIG, Chubb and investment bankers Goldman Sachs, gave the company an ability to offer clients additional A+ rated capacity. “This in turn has generated a modest amount of income for IPC, without incurring any additional underwriting risk,” Bryce stated.
He also noted that “During the first quarter, we also exceeded one billion dollars of written premium, measured from the company’s inception. Finally, next month, we commence our tenth year of operations. We are very gratified by the response and support of our clients, which has been reflected in our premium volume for the quarter, representing a significant increase over any comparable period in our past. We have also benefited from a relatively benign quarter in terms of loss activity, which in turn has resulted in our largest quarterly operating profit since inception of $44.3 million. April 1 renewals have, for the most part, met or exceeded our expectations, leading us to believe that our outlook for 2002 will continue to be positive. However, as we always remind our investors, a significant catastrophe can occur at any time, which could potentially have a material effect on our results of operations.”
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