IPC Re expects to be hit by a further $60 million of losses as a result of the latest UK flooding events, which occurred last weekend in central and southern parts of England. That figure matches exposed losses the company estimates from flooding of northern areas of England during June.

However, IPC Holdings, which wholly-owns IPC Re, is taking a conservative approach to quantifying its losses, hence it has gone public with expected losses which appear much higher than other reinsurers exposed to the same events.

As reported in the Royal Gazette, the company is bracing for a $112m hit as a result of losses from the June floods in England ($62.6m) and those the same month in New South Wales, Australia ($50.1m).

Another $60m whammy as a consequence of the July floods in England was also flagged during a conference call yesterday featuring CEO Jim Bryce, controller Robin Newman and chief financial officer John Weale.

But there is also a possibility IPC's losses from the June UK floods will be lower if that month's flooding is declared as two separate events. If there is a gap of 168 hours (seven days) between two flooding events they are regarded as separate events from an insurance/reinsurance point of view.

Explaining that Mr. Bryce said: "You really had two significant meteorological disturbances in the second week of June (14/15) and then on June 24/25/26. Those could be declared as two separate events.

"If you have two separate events you have two retentions which are taken up by the clients, which would reduce the amount of the reinsurance loss to reinsurers. We have taken a very conservative posture by saying that June is possibly only one event (24/25/26 June). We have taken our participation on a very conservative basis.

"If it is two events, or more, the more the loss falls back on the retentions to the ceding companies."

While the status of the June flooding is being assessed, whether it is one event or two, the new flooding in July which hit different areas of England to the June floods, means primary insurers in the UK are now seeking "back-up" reinsurance contracts.

Mr. Bryce said: "The UK in July is currently experiencing its second or third loss event. As loss estimates for June are beginning to crystalise we are just beginning to receive requests for back-up quotations from cedents in the UK. Additional information on all loss events will be required before any serious consideration can be given to these proposals.

"We sell reinsurance contract catastrophe cover - after two events the cover is exhausted and the cedent would then be required to go out and buy what we call back-up, that's backing up for a third possible event."

During June, IPC repurchased $100m of its shares and has authorisation to repurchase a further $100m. The company is pausing its buy-back plan until after the peak hurricane season has passed.

CFO Mr. Weale said IPC's investment income remains strong and was up $31.9m during the second quarter. Net incurred losses were $87.2m, paid claims were $93m, of which $75m related to the hurricanes Katrina, Rita and Wilma in 2005.

Mr. Weale said: "Based on current estimates for the ultimate losses from those events we believe that have paid 79 percent of Katrina, 76 percent of Rita and 75 percent of Wilma."