Bermuda-based IPC Holdings Ltd. last night reported net income of $77.2 million for the first quarter and said it would repurchase up to $200 million of shares over the next 12 months.

IPC's net income was up by $14.6 million on the same period last year and most of that was down to a drastic improvement investment income, while operating income was down.

Two storms impacted on the results, as IPC established a $50 million reserve to meet claims arising from Kyrill, which devastated parts of Europe in mid-January. There was also a $3 million net prior year loss development arising from Cyclone Larry, which hit Australia in March 2006.

Net operating income was $68.5 million, or $0.95 per common share, compared to $75.3 million, or $1.04 per common share for the first quarter of 2006. President and chief executive officer Jim Bryce said: "We continue to see terms and conditions, including price, remaining robust within the US. However, the same cannot be said for territories outside the US, where pricing is generally flat to down.

"Sidecar (unrated reinsurance vehicles) activity within the retrocessional market is somewhat reduced, as capacity generated by the traditional reinsurance market during 2006 is utilised.

"With pricing outside of the US at less attractive levels, and our initiative to cut back significantly on contracts with world-wide scope of coverage, we believe we need less capital than we are currently holding, and have therefore decided to return capital through repurchase of shares."

Mr. Bryce added: "Despite our strong performance over the past five quarters, our more than adequate capital level and our reduced risk profile, last week saw a sudden and perplexing announcement from Standard & Poor's, lowering our financial strength ratings".

Gross premiums written totalled $236.2 million, compared to $235.6 million in the first quarter of 2006 — despite approximately $52.8 million of business which was not renewed because of unsatisfactory terms and conditions.

IPC saw a net gain of $8.7 million from investments in the first quarter, compared to a net loss from investments of $12.6 million in the first quarter of 2006.