Bermuda insurance company Allied World Assurance Company, Ltd. is to cancel its underwriting agency agreement with IPC Re Underwriting Services within the next two years.

The IPC company, a unit of IPC Holdings Ltd., has had the contract with AWAC since the latter formed in November, 2001.

AWAC is also in the midst of ending agreements with American International Group Inc. that saw AIG handle its administrative functions since 2001.

AIG is both AWAC and IPC's largest shareholders, holding a greater than 20 percent stake in both, and being key to the formation of each.

In a Press statement, IPC said it had received notice from AWAC to cancel the underwriting agency agreement effective November 30, 2007. Under the terms of the agreement, IPCUSL provides underwriting services on property catastrophe treaty reinsurance sold by AWAC.