A.M. Best Downgrades Ratings of IPC Holdings Ltd. and Its Subsidiaries

A.M. Best Co. has downgraded the financial strength ratings to A- (Excellent) from A (Excellent) and issuer credit ratings to “a-” from “a” of IPCRe Limited (Bermuda) and IPCRe Europe Limited (Dublin, Ireland), which are reinsurance subsidiaries of IPC Holdings Ltd. (IPC) (Bermuda) (NASDAQ: IPCR). The ratings continue to be under review with negative implications following the recent announcement of the definitive agreement between IPC and Validus Holdings, Ltd (NYSE: VR). A.M. Best also has downgraded IPC’s ICR to “bbb-” from “bbb” and the indicative ratings for securities available under shelf registration to “bb” from “bb+” on preferred stock, “bbb-” from “bbb” on senior unsecured debt and to “bb+” from “bbb-” on subordinated debt of IPC. These ratings remain under review with negative implications.

The ratings of IPC were initially assigned a negative outlook in December 2007 based on concerns regarding the company’s enterprise risk management and its impact on capital optimization, which could drive stronger, sustainable long-term results. In order to seek out capital optimization, the IPC Board of Directors and its management had been pursuing a merger or acquisition strategy. However, the business profile of IPC has deteriorated over the last several months, during which time IPC has been party to a failed transaction and the target of a hostile take over. If for any reason the current transaction is not completed, in A.M. Best’s opinion, as a stand-alone entity, IPC’s business profile is now commensurate with that of an A- (Excellent) rated organization.

The under review status reflects the execution risk associated with the current pending transaction; therefore, the ratings will remain under review until the transaction closes and there is a clearer indication of the future status of IPC’s organizational structure.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.