UK could reduce the worlwide demand for property catastrophe reinsurance, Bermuda-based IPC Holdings, Ltd. states in its annual report to shareholders.

About 82 percent of the company's written premiums in 1997 came from catastrophe excess-of-loss reinsurance.

As previously reported, IPC Holdings, Ltd. had net income for the year to December 31 of $100.1 million ($3.79 per share), an 8.4 percent increase over the $92.6 million ($3.55) for 1996. The company cited state sponsored catastrophe type property insurance entities set up in Florida, Hawaii, and California as threats to its market share. IPC participates in the California programme earning $4.1 million in premiums.

"Although IPC has been selected to participate, and currently participates, in part of the reinsurance programme for this entity, there can be no assurance that such participation will continue,'' the company warned. "In the United Kingdom, the government has enacted a bill to allow insurers to build claim equalisation reserves which might reduce the amount of reinsurance bought. Management is also aware of many potential initiatives by capital market participants to produce alternative products that may compete with the existing catastrophe reinsurance markets.'' About 46 percent of the company's premiums came from the US in 1997. Another 11 percent came from the UK, its next largest source of business.

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