Standard & Poor's today became the fourth major ratingagency to lower its ratings for Bermuda-based IPCRe Ltd. in recentweeks, dropping the financial strength rating to "A" from "A-plus"in the wake of recent storms.

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Prior rating actions by other agencies included a cut to "A"from "A-plus" by A.M. Best, a cut to "triple-B" from "A-minus" byFitch, and a cut to Baa1 from A3 by Moody's.

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S&P also removed from CreditWatch and affirmed its"triple-B-plus" counterparty credit rating on IPC Holding Ltd.

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The ratings outlook is negative.

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S&P said that the ratings actions reflect that thecatastrophes in 2005 created sizable losses for IPCRe, and due toIPCRe's concentrated profile in property catastrophe, its earningsvolatility is higher than what was previously incorporated into theratings.

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In a statement announcing the action, credit analyst Jieqiu Fansaid, "With uncertainty regarding the long-term performance of theproperty-catastrophe business and possible exposures to higherfrequency and higher severity events, IPCRe could face additionalchallenges as a monoline property-catastrophe company in terms ofpricing adequacy and risk management."

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Still, on a more positive note, S&P said the ratings onIPCRe reflect the company's strong competitive position, itshistorically very strong (but volatile) operating performance,strong and stable management team, and strong capitalization.

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S&P noted that it would consider revising the outlook tostable, if IPCRe's efforts to enhance its risk management andmodeling capabilities enable it to meet capital and earningsexpectations and achieve appropriate long-term returns.

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