IPC Holdings Ltd. last night reported a 70-percent increase in net income in the second quarter despite $13.8 million in losses related to US floods and tornadoes.

The Bermuda-based reinsurerrecorded a profit of $47.5 million, or 78 cents per share, for the April through June period. This compared to net income of $28 million in the corresponding period in 2007.

A $20.7 million reduction in estimates of ultimate net losses for a number of prior-year events, mostly from 2007, boosted IPC's numbers.

The company's combined ratio, a measure of the proportion of each premium dollar spent on claims and expenses, was 10.5 percent, compared to 105.7 percent in the same period last year.

Net investment income dipped to $23.4 million from $31.9 million last year,

IPC president and chief excutive officer Jim Bryce said: "The severity of per-risk losses continued during the second quarter, with the tragic events in China and the Universal Studios fire in Hollywood.

"While these events had no direct impact on IPC's results for the quarter, they nevertheless serve as a reminder of the need for discipline in the reinsurance market. Excess capacity, resulting from the abundance of capital, has had some impact on rates, though generally underwriting discipline is being shown in our specialist line of property catastrophe reinsurance.

"However, there is greater pressure as market capital continues to grow. Sensitivity in demand and pricing was demonstrated by the commencement of hurricane season, which resulted in an increase in demand and an immediate but temporary increase in pricing in the United States. Generally, renewals at July 1, 2008 were in line with, or better than, our expectations."

Despite the frequency of catastrophes during the quarter, Mr. Bryce said insurers' high risk retention rates meant that there was little impact of property catastrophe reinsurers.

"The continued updated claims information received from clients has again enabled us to adjust our reserves, which has had a positive effect on our operating results," Mr. Bryce added.

"However, the ongoing turbulence in the credit markets has had a marked impact on equities and fixed maturity securities generally, and despite the highly-rated, short duration nature of our portfolio, we have not been immune from its consequences."