Interim Results

Catlin Group Limited
14 September 2004


14 September 2004 

                             
                 CATLIN GROUP LIMITED ANNOUNCES INTERIM RESULTS
                     FOR THE SIX MONTHS ENDED 30 JUNE 2004


HAMILTON, Bermuda - Catlin Group Limited ('CGL': London Stock Exchange), the
international property and casualty insurer and reinsurer, announces record
interim premium income and net income amid continuing positive market
conditions.

Financial highlights:

   • Net income increased to US$95.8 million (30 June 2003: US$50.7 million)
   • Annualised weighted return on average equity amounted to 23.3% (30 June
     2003: 19.0%)
   • Gross premiums written rose to US$935.3 million (30 June 2003: US$747.0
     million)
   • Net premiums earned increased to US$548.2 million (30 June 2003:
     US$356.3 million)
   • Combined ratio improved to 81.8% (30 June 2003: 87.8%)
   • Pro forma net income per share of 62 cents (30 June 2003: 41 cents)
   • Interim dividend of 7.8 cents (4.3 pence) per share
   • Net asset value of US$5.93 (£3.28) per share as at 30 June 2004

                                              For the six months ended 30 June
                                              (US$000 except where indicated)
                                                   2004        2003    % change
Gross premiums written                          935,300     747,004         25%
Net premiums written                            795,342     657,462         21%
Net premiums earned                             548,230     356,305         54%
Total revenues                                  565,220     376,020         50%
Income before income taxes                      112,627      59,605         89%
Net income                                       95,846      50,726         89%
Pro forma net income per share (cents)               62          41         51%
Dividends per share (pence)                         4.3          --          --
Unearned premiums                               914,015     710,048         29%
Effective tax rate                                 14.9%       14.9%         --
Combined ratio                                     81.8%       87.8%
Annualised weighted return on average equity       23.3%       19.0%


Operational highlights:

   • Successful start-up of Catlin UK, the Group's third operating platform
   • Strong growth of Corporate Direct and Corporate Reinsurance business
     segments (composed of Catlin Bermuda and Catlin UK), which combined
     accounted for 27% of consolidated gross premiums written
   • Successful start-up of offices in Germany and Australia
   • Development of online quotation engine allowing for single data entry
   • Hurricanes Charley and Frances not expected to have significant impact
     on Group's financial returns for full year

Commenting on the Group's interim results, Chief Executive Stephen Catlin said:

'We are pleased to announce record premium income and net income in our first
results statement as a listed company. All four of the Group's business segments
have performed well in the first six months of 2004. We are particularly pleased
with the rapid development of Catlin UK and Catlin Bermuda.

'Premium rates increased by a weighted average of 2% during the first half of
2004, with much of this increase pertaining to business written in the early
months of the year. Currently, we anticipate rates in 2005 will continue to
offer the prospect of attractive returns.

'These interim results give us confidence that the Group will generate a
superior return on equity for the full year. Whilst the impact of Hurricane Ivan
is still uncertain, we expect that the second half of 2004 will continue to
deliver strong profitability for Catlin.'

This summary should be read in conjunction with the detailed results
announcement which follows.
                                    - ends -
For more information contact:
Media Relations:
James Burcke, Head of Communications                   Tel: [phone]
Mobile: [phone]
E-mail: [e-mail]

Liz Morley, Gavin Anderson & Company                   Tel: [phone]
E-mail: [e-mail]

Investor Relations:
William Spurgin, Head of Investor Relations            Tel: [phone]
Mobile: [phone]
E-mail: [e-mail]

Notes to editors:

1. The Catlin Group, headquartered in Bermuda, is a publicly listed,
property/casualty insurer and reinsurer writing more than 30 classes of business
worldwide. Catlin wrote gross premiums of $1.2 billion in 2003.

2. Attached are Catlin Group Limited's interim results statement and
consolidated financial statements for the first six months of 2004. Catlin's
financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America ('US GAAP'). The Group
reports in US dollars.

3. Rate of exchange at 30 June 2004: £1 = US$1.81 (balance sheet);
£1 = US$1.82 (income statement).

4. The loss ratio is calculated as losses and loss expenses divided
by net premiums earned. The expense ratio is calculated as total expenses, less
Group financing costs and amortisation expense, divided by net premiums earned.
The combined ratio is the aggregate of the loss ratio and expense ratio.


Financial Results

Catlin Group Limited produced record premium income and net income in its first
set of interim results as a listed company. These results reflect the Group's
commitment to underwriting profitability and demonstrate the potential of its
three-platform underwriting structure.

The Group's income before taxes increased 89% to US$112.6 million (30 June 2003:
US$59.6 million) for the first six months of 2004, while net income rose by a
similar percentage to US$95.8 million (30 June 2003: US$50.7 million). The
Group's annualised return on average equity for the six months rose to 23.3% (30
June 2003: 19.0%; 31 December 2003: 22.1%).

Gross premiums written increased by 25% during the first six months of 2004 to
US$935.3 million (30 June 2003: US$747.0 million). Net premiums earned rose by
54% to US$548.2 million (30 June 2003: US$356.3 million), partly driven by the
increase in gross premiums written during the first six months of 2004. It also
reflects the earning of the additional premium income written in 2002 and 2003
as a result of the increased capacity of the Catlin Syndicate at Lloyd's. The
rate of written premium growth is now slowing, and the rate of earned premium
growth experienced in the second half of 2003 will not be repeated in the second
half of 2004.

At 30 June 2004, unearned premiums on the Group's balance sheet amounted to
US$914.0 million (30 June 2003: US$710.0 million), an increase of 29% from the
previous year.

During the first six months of 2004, the Group's effective tax rate was 14.9%
(30 June 2003: 14.9%). Management believes that this is indicative of the likely
tax rate for the full year.

The Group's combined ratio for the first six months of 2004 improved to 81.8%
(30 June 2003: 87.8%), reflecting both the Group's focus on underwriting
profitability, the favourable underwriting conditions and the relatively benign
loss environment during the period.

Based on the share capital structure in place at the time of the Group's initial
public offering on 6 April 2004, pro forma net income per share amounted to 62
cents (30 June 2003: 41 cents). As at 30 June 2004, the number of common shares
in issue was 154.1 million (30 June 2003 pro forma: 122.9 million). Earnings per
share on a reported basis were US$1.19 (30 June 2003: $2.38). The reported
earnings per share reflect the change in capital structure at the time of the
initial public offering, including the conversion of preference shares to common
shares.


Dividend

The Board of Directors has declared an interim dividend of 4.3 pence per share,
which will be paid on 15 November 2004 to shareholders of record at the close of
business on 15 October 2004. The dividend is determined in dollars but declared
in sterling based on the prevailing exchange rate at 30 June 2004. Shareholders
may elect to receive their dividend in US dollars based on the prevailing
exchange rate at 22 October 2004. The latest date for receipt of forms of
election for payment of the dividend in US dollars is 15 October 2004.


Overview of Results and Operations

All segments of the business contributed to the Group's excellent performance in
the first six months of 2004, with the growth in written premium recorded by the
Corporate Direct and Corporate Reinsurance segments particularly strong. These
segments, which comprise of the operations of Catlin UK and Catlin Bermuda,
accounted for 27% of the Group's consolidated gross premiums in the first six
months of 2004 (30 June 2003: 17%). Excluding intra-Group reinsurance
transactions, gross premium written in the Corporate Direct and Corporate
Reinsurance segments increased to US$197 million in the first six months of 2004
(30 June 2003: US$24 million).

The growth in the Corporate Direct segment was primarily due to the
establishment of Catlin UK, which specialises in writing property, casualty and
professional indemnity coverages for smaller to midsize UK commercial accounts.
Also contributing to the segment's growth was the expansion of Catlin Bermuda's
third party insurance underwriting, including the transfer in 2004 of a book of
US medical malpractice business previously underwritten by the Catlin Syndicate.

The results of Catlin UK during its start-up phase have fully met our
expectations. While it is already an important element of the Group, Catlin UK
has potential for further development and growth. For example, an online
quotation engine has recently been implemented which allows selected brokers to
receive premium quotations rapidly over the internet. We expect the quotation
engine to facilitate the underwriting of significant volumes of smaller premium
business and provide the capability for single data entry. While the quotation
engine is now only being used by Catlin UK for professional indemnity and
directors' and officers' liability insurance, it has promising potential to be
used for other classes of business written by all three Catlin underwriting
platforms.

The gross premiums written in the Corporate Reinsurance segment also increased,
though the overall growth in this segment was masked by a reduction in the
amount of premiums ceded to Catlin Bermuda by the Catlin Syndicate due to the
decision by Lloyd's to reduce the maximum level of qualifying quota share (QQS)
reinsurance for all Lloyd's syndicates to 10% of premiums written from the prior
30%. Third-party gross premiums written by the Corporate Reinsurance segment
(after elimination of intra-Group reinsurance transactions) increased by 268%,
reflecting strong growth in the reinsurance business underwritten by Catlin
Bermuda and Catlin UK.

Excellent results were produced by the Lloyd's Direct and Reinsurance segments,
which comprise the operations of the Catlin Syndicate. The capacity of the
Catlin Syndicate remains at £500 million (US$905 million) for the 2004 year of
account, making the Catlin Syndicate one of the 10 largest at Lloyd's in terms
of capacity.

Premium rates across all classes of business written by the Group rose by a
weighted average of 2% during the first half of 2004. Rate increases were more
substantial during the January renewal season than later in the first half.
Overall, rate adequacy in all of the Group's business segments remains robust.

While trading conditions were favourable during the six month period, the Group
also benefited from its distinctive and effective operating structure. The three
underwriting platforms -- the Catlin Syndicate at Lloyd's, Catlin Bermuda and
Catlin UK -- provide the Group with a structure that allows it to underwrite
diverse books of business in three of the world's largest insurance
marketplaces: Lloyd's, Bermuda and the UK company market. Unlike many other
companies operating at Lloyd's, Catlin Group owns 100% of the capacity of its
Lloyd's syndicate, which provides the Group with flexibility as to which
platform is best suited to underwrite a particular account. The Group's Bermuda
domicile provides additional flexibility, including tax and other financial
benefits.

Catlin Germany in Cologne, which was established in late 2003, began
underwriting cash in transit and other types of specie coverage on behalf of the
Catlin Syndicate with effect from 1 January 2004, and has already produced new,
quality business for the Syndicate. In addition, the Group established a
representative office in Sydney, Australia, in early 2004. This modest start-up
operation is expected to lead to increased business for the Group from Australia
and New Zealand.

The Group continued its conservative investment philosophy during the period.
Assets are primarily invested in fixed maturities and cash and cash equivalents.
The annualised investment return for the period was 1.7%.

The Group successfully completed its initial public offering of common shares on
6 April 2004 when Catlin Group shares began to trade unconditionally on the
London Stock Exchange. The offering raised US$182 million net of expenses. Those
funds are being used to support the Group's increased premium income and other
initiatives. As a result of the funds raised in the IPO and retained earnings,
the stockholders' equity of the Group increased to US$913.2 million at 30 June
2004 (30 June 2003: US$560.6 million).


Segmental Information

The Group's underwriting results by segment are presented prior to adjustments
necessary to eliminate intra-Group reinsurance transactions on consolidation.
Administrative and other expenses are managed on a Group basis and are allocated
between segments based on net premiums earned.

During 2004 the Group changed its method of calculating its expense ratio to
follow market practice more closely. Previously, all expenses were included in
the calculation, whereas now Group financing costs and amortisation expense are
excluded. Comparative figures are also presented on this revised basis.


Six months ended 30 June 2004

               Lloyd's       Lloyd's   Corporate     Corporate      Intra-group    Total
                                                                    reinsurance
                Direct   Reinsurance      Direct   Reinsurance      eliminations
               US$'000       US$'000     US$'000       US$'000        US$'000    US$'000

Gross
premiums       557,725       180,561     116,105       139,661        (58,752)   935,300
written
Reinsurance
premiums
ceded         (149,539)      (22,527)    (24,941)       (1,703)        58,752   (139,958)
-------------  --------      --------    --------      --------       --------   --------
Net premiums
written        408,186       158,034      91,164       137,958              -    795,342
Change in
unearned
premiums       (84,228)      (71,494)    (74,701)      (16,689)             -   (247,112)
-------------  --------      --------    --------      --------       --------   --------
Net premiums
earned         323,958        86,540      16,463       121,269              -    548,230
Losses and
loss
expenses      (166,503)      (29,448)    (10,535)      (59,618)             -   (266,104)
Expenses      (126,842)      (26,726)     (7,195)      (25,726)             -   (186,489)
-------------  ---------      --------    --------      --------       --------  ---------
Net
underwriting
result          30,613        30,366      (1,267)       35,925              -     95,637
-------------  ---------      --------    --------      --------       --------  ---------

Loss ratio        51.4          34.0        64.0          49.2                      48.5
Expense           38.4          30.2        43.0          20.5                      33.3
ratio
Combined          89.8          64.2       107.0          69.7                      81.8
ratio


Six months ended 30 June 2003

               Lloyd's       Lloyd's   Corporate     Corporate    Intra-group      Total
                Direct   Reinsurance      Direct   Reinsurance   eliminations
               US$'000       US$'000     US$'000       US$'000        US$'000    US$'000

Gross
premiums       528,379       194,878       1,744       126,178       (104,175)   747,004
written
Reinsurance
premiums
ceded         (156,177)      (37,436)       (104)            -        104,175    (89,542)
-------------  ---------      --------     -------      --------       --------  ---------
Net premiums
written        372,202       157,442       1,640       126,178              -    657,462
Change in
unearned
premiums      (142,319)      (87,686)       (990)      (70,162)             -   (301,157)
-------------  ---------      --------     -------      --------       --------  ---------
Net premiums
earned         229,883        69,756         650        56,016              -    356,305
Losses and
loss
expenses      (107,891)      (24,393)       (389)      (32,679)             -   (165,352)
Expenses      (112,648)      (29,395)        (86)       (8,934)             -   (151,063)
-------------  ---------      --------     -------      --------       --------  ---------
Net
underwriting
result           9,344        15,968         175        14,403              -     39,890
-------------  ---------      --------     -------      --------       --------  ---------

Loss ratio        46.9          35.0        59.9          58.3                      46.4
Expense           48.0          41.1        12.4          14.9                      41.4
ratio
Combined          94.9          76.1        72.3          73.2                      87.8
ratio


Second quarter 2004 forecasts for Catlin Syndicate at Lloyd's

The forecasts relating to the 2002 and 2003 years of account of the Catlin
Syndicate (Syndicate 2003), which is managed by Catlin Underwriting Agencies
Limited, remain unchanged from those announced at the end of the first quarter.

The forecasts, which are set out below, are expressed as a percentage of
capacity based on figures as at 30 June 2004:

Year of account   Capacity (£m)   Current forecast (%)   Previous forecast (%)
           2002          £274.6      10.0% - 15.0%           10.0% - 15.0%
           2003          £500.0      13.5% - 18.5%           13.5% - 18.5%


Outlook

We are encouraged by our operating results in the first six months of 2004.
Barring a major catastrophe or other unforeseen event, this performance gives us
confidence for a satisfactory outcome for the full year. While Hurricanes
Charley and Frances caused considerable insured damage and loss of life in
Florida within the past month, the combined impact of these two storms on the
Group is currently estimated at US$40 million to $US60 million, net of
reinsurance recoveries. This amount is within our planning assumptions and
should not have a significant impact on the Group's expected financial returns
for the full year. It is too early to assess with any degree of precision the
impact of Hurricane Ivan, which is expected to reach the United States after the
release of this statement. The net impact to the Group depends on the strength
of the storm and its course, and we are assessing our loss scenarios on a
continuous basis.

Our proven underwriting discipline, including our focus on underwriting for
profit, combined with our realistic and flexible approach to managing
underwriting cycles will benefit shareholders in the periods ahead.

Stephen Catlin
Chief Executive
14 September 2004


Consolidated Balance Sheets
(US dollars in thousands, except share amounts)


                                            June 30       June 30       Dec 31
                                               2004          2003         2003
                                         (unaudited)   (unaudited)    (audited)
Assets
Investments
 Fixed maturities, available-for-sale
 (amortized cost 2004: $1,080,859; June
 2003: $198,171; Dec 2003: $750,051)      $1,079,129      $199,374     $755,905

 Short-term investments                       52,701       121,065      153,101
 Cash and cash equivalents                   579,261       686,470      325,667
 Investment in associate                       2,361         2,249        2,542
                                             --------     ---------     --------
 Total investments                         1,713,452     1,009,158    1,237,215
Accrued investment income                     10,408         3,405        9,281
Premiums and other receivables               720,518       552,208      472,706
Reinsurance recoverable (net of
allowance of 2004: $10,588; June 2003:
$9,151; Dec 2003: $9,097)                    255,680       258,410      287,165
Deposit with reinsurer                        60,606        94,470       94,470
Reinsurers' share of unearned premiums        96,252        85,370       38,287
Deferred acquisition costs                   185,618       144,789      130,185
Intangible assets and goodwill
(accumulated amortization 2004:
$25,266; June 2003: $21,580; Dec 2003:
$23,257)                                      69,374        66,447       70,531
Deferred tax asset                                 -        15,235        7,082
Other assets                                  81,400        35,336       45,542
                                             --------     ---------     --------
Total assets                              $3,193,308    $2,264,828   $2,392,464
                                             ========     =========     ========
                                                                        
                                              
                                              June 30      June 30        Dec 31
                                                 2004          2003         2003
                                          (unaudited)   (unaudited)    (audited)
Liabilities and Stockholders' Equity
Liabilities:
Unpaid losses and loss expenses            $1,085,491      $758,279     $962,535
Unearned premiums                             914,015       710,048      612,325
Deferred gain                                  19,418        29,089       29,089
Reinsurance payable                           113,148       112,134       43,520
Deferred tax liability                          6,707             -            -
Notes payable                                  50,359        50,358       50,107
Accounts payable and other liabilities         90,919        44,333       56,251
                                             --------     ---------     --------
Total liabilities                          $2,280,057    $1,704,241   $1,753,827
                                             ========     =========     ========



Stockholders' Equity:                        June 30      June 30       Dec 31
                                                2004         2003         2003
Preference shares
Class A cumulative convertible
preference shares, par value $0.0001
(June and Dec 2003: Authorized
110,000,000; Issued and outstanding
15,000,000)                                        -           $7           $2
Class B-1 cumulative convertible
preference shares, par value $0.0001
(June and Dec 2003: Authorized
470,000,000; Issued and outstanding
457,000,000)                                       -           46           46
Class B-2 cumulative convertible
preference shares, par value $0.0001
(June and Dec 2003: Authorized, issued
and outstanding 25,000,000)                        -            2            2

Common shares
Ordinary common shares, par value
$0.0001                                            -            7            8
(2003: Authorized 300,000,000; June 2003:
issued and outstanding 75,000,000; Dec
2003: issued and outstanding 75,109,082)

Ordinary common shares, par value $0.01        1,541            -            -
Authorized 250,000,000; issued and
outstanding 154,071,925

Additional paid-in capital                   715,167      531,211      533,276
Accumulated other comprehensive (loss)        (6,012)      (1,108)      (1,406)
Retained earnings                            202,555       30,422      106,709
                                             --------    ---------     --------
Total stockholders' equity                   913,251      560,587      638,637
                                             --------    ---------     --------
Total liabilities and stockholders'
equity                                    $3,193,308   $2,264,828   $2,392,464
                                          ===========  ===========  ===========

Approved by the Board of Directors on September 13, 2004

Consolidated Statements of Operations (Unaudited)
For the Six Months ended June 30, 2004 and 2003
(US dollars in thousands, except share amounts)


                                                            2004         2003

Revenues
Gross premiums written                                  $935,300     $747,004
Reinsurance premiums ceded                              (139,958)     (89,542)
                                                          --------     --------

Net premiums written                                     795,342      657,462
Change in unearned premiums                             (247,112)    (301,157)
                                                          --------     --------

Net premiums earned                                      548,230      356,305
Net investment income                                     18,867       13,087
Net realized gains/(losses) on investments                 1,223       (1,494)
Net realized (losses)/gains on foreign currency
exchange                                                  (3,160)       8,102
Other income                                                  60           20
                                                          --------     --------
Total revenues                                           565,220      376,020

Expenses
Losses and loss expenses                                 266,104      165,352
Policy acquisition costs                                 142,858      126,499
Administrative expenses                                   28,309       18,372
Other expenses                                            15,322        6,192
                                                          --------     --------
Total expenses                                           452,593      316,415
                                                          --------     --------
Income before income tax charge                          112,627       59,605
Income tax charge                                        (16,781)      (8,879)
                                                          --------     --------
Net income                                               $95,846      $50,726
                                                          ========     ========

Earnings per common share
Basic                                                      $1.19        $2.38
                                                          ========     ========
Diluted                                                    $1.10        $0.38
                                                          ========     ========


Consolidated Statements of Changes in Stockholders' Equity and Accumulated
Other Comprehensive Income (unaudited) 
For the Six Months ended June 30, 2004 and 2003
(US dollars in thousands, except share amounts)


              Common   Preference   Additional   Retained   Accumulated Other       Total
              Stock      Shares      Paid-in     Earnings     Comprehensive     Stockholders'
                                     Capital                     (Loss)            Equity

Balance
January 1
2003              $7          $55     $530,304   $(20,304)         $(1,075)       $508,987

Comprehensive
income:
Net income         -            -            -     50,726                -          50,726

Other
comprehensive
loss               -            -            -          -              (33)            (33)
                ------      -------      -------    -------         --------        --------
Total
comprehensive
income             -            -            -     50,726              (33)         50,693
                ------      -------      -------   --------         --------        --------

Stock option
scheme
expense            -            -          907          -                -             907
                ------      -------      -------   --------         --------        --------
Balance June
30, 2003          $7          $55     $531,211    $30,422          $(1,108)       $560,587
                ======      =======    =========   ========         ========       =========

Balance
January 1,
2004              $8          $50     $533,276   $106,709          $(1,406)       $638,637

Comprehensive
income:
Net income         -            -            -     95,846                -          95,846

Other
comprehensive
loss               -            -            -          -           (4,606)         (4,606)
                ------      -------      -------   --------         --------        --------
Total
comprehensive
income             -            -            -     95,846           (4,606)         91,240
                ------      -------      -------   --------         --------        --------

Payment of
PIK
dividend           4                        (4)         -                -               -
Redesignation
of preference
shares            50          (50)           -          -                -               -
19-1 bonus
issue          1,167            -       (1,167)         -                -               -
Global           312            -      182,092          -                -         182,404
Offer
Stock option
scheme
expense            -            -          970          -                -             970
                ------      -------      -------   ---------          --------        --------
Balance June
30, 2004      $1,541            -     $715,167   $202,555            $(6,012)       $913,251
               =======      =======    =========  =========          ========        ========


Consolidated Statements of Cash Flows (unaudited)
For the Six Months ended June 30, 2004 and 2003
(US dollars in thousands, except share amounts)

                                                               2004       2003

Cash flows provided by operating activities
Net income                                                   95,846     50,726
Adjustments to reconcile net income to net cash provided
by operations
Amortization and depreciation                                 5,126      3,220
Amortization/accretion of discounts of fixed maturities        (955)       686
Net realized (gains)/losses on investments                   (1,224)     1,495
Unpaid losses and loss expenses                             112,902     39,976
Unearned premiums                                           296,655    316,679
Premiums and other receivables                             (251,791)  (210,289)
Deferred acquisition costs                                  (54,290)   (76,557)
Reinsurance payable                                          65,970     41,255
Reinsurance recoverable                                      35,977     13,528
Deposit with reinsurer                                       33,864     14,730
Reinsurers' share of unearned premiums                      (52,591)   (20,645)
Deferred gain                                               (10,811)         -
Accounts payable and other liabilities                       35,210      3,873
Deferred tax asset/liability                                  3,048     13,606
Other                                                       (14,953)    (5,500)
                                                            ---------  ---------
Net cash flows provided by operating activities             297,983    186,783
                                                            ---------  ---------

Cash flows used in investing activities
Purchases of fixed maturities                              (601,327)  (262,056)
Purchases of short-term investments                        (494,193)   (63,484)
Proceeds from sales of fixed maturities                     247,606    181,656
Proceeds from maturities of fixed maturities                 26,346     29,721
Proceeds from sales of short-term investments               600,118     36,660
Purchase of intangible assets                                  (346)         -
Purchases of property and equipment                          (6,893)    (3,283)
Proceeds from sales of property and equipment                     1          -
                                                            ---------  ---------
Net cash flows used in investing activities                (228,688)   (80,786)
                                                            ---------  ---------



                                                            2004         2003

Cash flows provided by financing activities
Net proceeds from issuance of common shares              182,404            -
Proceeds from notes payable                                    -       50,571
Repayment of notes payable                                     -          (87)
Proceeds from short term debt                                552            -
Repayments of short term debt                               (119)           -
                                                          --------     --------
Net cash flows provided by financing activities          182,837       50,484
                                                          --------     --------
Net increase in cash and cash equivalents                252,132      156,481
Cash and cash equivalents - beginning of period          325,667      523,536
Foreign exchange difference                                1,462        6,453
                                                          --------     --------
Cash and cash equivalents - end of period               $579,261     $686,470
                                                          ========     ========

Supplemental cash flow information

Taxes paid                                                  $105         $576
                                                          ========     ========
Interest paid                                               $298          $-
                                                          ========     ========

Notes to the Consolidated Financial Statements (unaudited)
For the Six Months ended June 30, 2004 and 2003
(US dollars in thousands, except share amounts)


1.       Basis of Preparation

The unaudited interim financial statements have been prepared in accordance with
the accounting policies set out in the consolidated financial statements for the
year ended December 31, 2003.


2.       Segmental Information

The Group organizes its business through four segments, with related supporting
service and holding companies, as follows: Lloyd's Direct and Lloyd's
Reinsurance; Corporate Direct and Corporate Reinsurance.


Net income before tax by operating segment before intra-Group reinsurance
eliminations for the half year ended June 30, 2004 is as follows:
                
                Lloyd's       Lloyd's   Corporate     Corporate    Intra-group      Total
                 Direct   Reinsurance      Direct   Reinsurance   eliminations
                  $'000         $'000       $'000         $'000          $'000      $'000

Gross premiums
written         557,725       180,561     116,105       139,661        (58,752)   935,300
Reinsurance
premiums ceded (149,539)      (22,527)    (24,941)       (1,703)        58,752   (139,958)
                -------       -------     -------       -------        -------    -------
Net premiums
written         408,186       158,034      91,164       137,958              -    795,342
                =======       =======     =======       =======        =======    =======
Net premiums
earned          323,958        86,540      16,463       121,269              -    548,230
Losses, loss
expenses and
profit
commissions    (166,503)      (29,448)    (10,535)      (59,618)             -   (266,104)
Acquisition
costs          (105,452)      (21,012)     (6,108)      (17,719)         7,433   (142,858)
Administration
expenses        (16,728)       (4,469)       (850)       (6,262)             -    (28,309)
Other expenses   (4,662)       (1,245)       (237)       (1,745)        (7,433)   (15,322)
                -------       -------      -------      -------        -------    -------
Net
underwriting
result           30,613        30,366      (1,267)       35,925              -     95,637

Other income
and expenses:

Net investment
income and net
realised
gain/(loss) on
investments      11,871         3,171         604         4,444              -     20,090
Net realised
gains/(losses)
on foreign
currency
exchange         (1,867)         (499)        (95)         (699)             -     (3,160)
Other income         35             9           3            13              -         60
Net income /
(loss) before
income taxes     40,652        33,047        (755)       39,683              -    112,627
                =======       =======     =======       =======        =======    =======
Total revenue   333,997        89,221      16,975       125,027              -    565,220
                =======       =======     =======       =======        =======    =======


Net income before tax by operating segment before intra-Group reinsurance
eliminations for the half year ended June 30, 2003 is as follows:
                  
                Lloyd's       Lloyd's   Corporate     Corporate    Intra-group      Total
                 Direct   Reinsurance      Direct   Reinsurance   eliminations
                  $'000         $'000       $'000         $'000                     $'000

Gross premiums
written         528,379       194,878       1,744       126,178       (104,175)   747,004
Reinsurance
premiums ceded (156,177)      (37,436)       (104)            -        104,175    (89,542)
Net premiums
written         372,202       157,442       1,640       126,178              -    657,462
                =======       =======     =======       =======        =======    =======
Net premiums
earned          229,883        69,756         650        56,016              -    356,305
Losses, loss
expenses and
profit
commissions    (107,891)      (24,393)       (389)      (32,679)             -   (165,352)
Acquisition
costs           (99,641)      (25,448)        (50)       (5,765)         4,405   (126,499)
Administration
expenses        (11,854)       (3,597)        (33)       (2,888)             -    (18,372)
Other expenses   (1,153)         (350)         (3)         (281)        (4,405)    (6,192)
                -------       -------      -------      -------        -------    -------
Net
underwriting
result            9,344        15,968         175        14,403              -     39,890
Other income
and expenses:

Net investment
income and net
realised
gain/(loss) on
investments       7,481         2,269          21         1,822              -     11,593
Net realised
gains/(losses)
on foreign
currency
exchange          5,227         1,586          15         1,274              -      8,102
Other income         13             4           -             3              -         20
Net income /
(loss) before
income taxes     22,065        19,827         211        17,502              -     59,605
                =======       =======     =======       =======        =======    =======
Total           242,604        73,615         686        59,115              -    376,020
revenue
                =======       =======     =======       =======        =======    =======


Total assets by segment at June 30, 2004 and 2003 are as follows:

                                                      2004                2003
                                                     $'000               $'000

Lloyd's Direct                                   1,135,047           1,124,928
Lloyd's Reinsurance                                252,693             171,099
Corporate Direct                                    80,670                 785
Corporate Reinsurance                              440,477             236,923
Other                                            1,853,224           1,046,287
Consolidation adjustments                         (568,803)           (353,929)
                                                 ---------           ---------
Total assets                                     3,193,308           2,226,093
                                                 =========           =========

'Other' in the table above includes assets such as investments and cash and cash
equivalents which are not allocated to individual segments.


3.       Investments

Fixed maturities
The fair values and amortized costs of fixed maturities at June 30, 2004 and
2003 are as follows:

                                 2004                         2003
                         Fair          Amortized        Fair        Amortized
                         Value           Cost           Value          Cost

US government and
agencies                 $511,466        $510,603       $71,285        $71,291
Non-US governments         41,412          41,538         8,229          8,088
Corporate securities      273,679         275,397        38,836         38,192
Asset-backed
securities                252,572         253,321        81,024         80,600
                          --------        --------      --------       --------
Total fixed
maturities             $1,079,129      $1,080,859      $199,374       $198,171
                          ========        ========      ========       ========


The gross unrealized gains and losses related to fixed maturities at June 30,
2004 and 2003 are as follows:

                              2004                            2003
                      Gross           Gross           Gross           Gross
                   Unrealized      Unrealized      Unrealized      Unrealized
                      Gains          Losses           Gains          Losses

US government and
agencies                $2,970          $2,107            $444            $450
Non-US
governments                 16             142             154              13
Corporate
securities                 224           1,942             659              14
Asset-backed
securities                 129             878             494              71
                        --------       ---------        --------       ---------
Total fixed
maturities              $3,339          $5,069          $1,751            $548
                        ========       =========        ========       =========

The net realized gains/(losses) on fixed maturities for the six months ended
June 2004 were $1,116 (2003: $(1,348)).

Fixed maturities at June 30, 2004, by contractual maturity, are shown below.
Expected maturities could differ from contractual maturities because borrowers
may have the right to call or prepay obligations, with or without call or
prepayment penalties.

                                                       Fair          Amortized
                                                       Value             Cost

Due in one year or less                              $188,267         $188,681
Due after one through five years                      330,847          332,384
Due after five years through ten years                306,512          305,524
Due after ten years                                       931              949
                                                      ---------        ---------

Asset-backed securities                               252,572          253,321
                                                      ---------        ---------

Total                                              $1,079,129       $1,080,859
                                                      =========        =========


Restricted Assets
The Group is required to maintain assets on deposit with various regulatory
authorities to support its insurance and reinsurance operations. These
requirements are generally promulgated in the statutory regulations of the
individual jurisdictions. These funds on deposit are available to settle
insurance and reinsurance liabilities. The Group also utilizes trust funds in
certain large transactions where the trust funds are set up for the benefit of
the ceding companies, and generally take the place of Letter of Credit ('LOC')
requirements. The total value of these restricted assets by category at June 30,
2004 and 2003 are as follows:

                                                          2004            2003

Fixed maturities, available for sale                  $445,409        $109,666
Short term investments                                  37,102          90,077
Cash and cash equivalents                              126,462         100,726
                                                        --------        --------
Total restricted assets                               $608,973        $300,469
                                                        ========        ========

The Group also has cash and short-term investments in segregated portfolios
primarily to provide collateral or guarantees for LOCs as described in Note 6.


4.       Unpaid Losses and Loss Expenses

The Group establishes reserves for losses and loss adjustment expenses, which
are estimates of future payments of reported and unreported claims for losses
and related expenses, with respect to insured events that have occurred. The
process of establishing reserves continues to be complex and imprecise,
requiring the use of informed estimates and judgments. The Group's estimates and
judgments may be revised as additional experience and other data become
available and are reviewed, as new or improved methodologies are developed or as
current laws change. Any such revisions could result in future changes in
estimates of losses or reinsurance recoverable, and would be reflected in the
Group's results of operations in the period in which the estimates are changed.
Management believe they have made a reasonable estimate of the level of reserves
at June 30, 2004 and 2003.


The reconciliation of unpaid losses and loss expenses for the six months ended
June 30, 2004 and 2003 is as follows:

                                                               2004       2003

Gross unpaid losses and loss expenses, beginning of
period                                                     $962,535   $695,168
Reinsurance recoverable on loss and loss expenses          (242,187)  (214,174)
                                                            ---------  ---------
Net unpaid losses and loss expenses beginning of
period                                                      720,348    480,994
                                                            ---------  ---------
Incurred losses and loss expenses for claims related to:

Current year                                                281,934    165,122
Prior years                                                 (15,830)       230
                                                            ---------  ---------
Total incurred losses and loss expenses                     266,104    165,352
                                                            ---------  ---------
Paid losses and loss expenses for claims related to:
Current year                                                (22,385)    (5,543)
Prior years                                                 (87,196)   (87,256)
                                                            ---------  ---------
Total paid losses and loss expenses                        (109,581)   (92,799)
                                                            ---------  ---------
Foreign exchange adjustment                                   5,043     (4,480)
                                                            ---------  ---------
Net unpaid losses and loss expenses end of period           881,914    549,067
Reinsurance recoverable on loss and loss expenses           203,577    209,212
                                                            ---------  ---------
Gross unpaid losses and loss expenses, end of period     $1,085,491   $758,279
                                                            =========  =========

As a result of the changes in estimates of insured events in prior years, the
half-year 2004 provision for losses and loss expenses net of reinsurance
recoveries decreased by $15,830 (2003: increase of $230).

The Group's estimated gross loss for the September 11, 2001 event at June 30,
2004, is $133,468 (2003: $136,603). This estimate is based on extensive analysis
of business written at contract level, using all available information, together
with underwriters' judgments of the loss potential, and is subject to regular
and ongoing review. The current estimate includes $1,200 (2003: $800) for
claims-related fees and expenses, and although subrogation is being pursued for
direct property losses, no allowance is reflected in these figures. The net loss
at June 30, 2004 is estimated to be $23,934 (2003: $24,497) and reflects
anticipated reinsurance recoveries based on a single event assumption.


5.       Reinsurance

The Group purchases reinsurance to limit various exposures including catastrophe
risks. Although reinsurance agreements contractually obligate the Group's
reinsurers to reimburse it for the agreed upon portion of its gross paid losses,
they do not discharge the primary liability of the Group. The effect of
reinsurance and retrocessional activity on premiums written and earned is as
follows:

                               2004                              2003
                    Premiums            Premiums         Premiums      Premiums
                     Written              Earned          Written        Earned

Direct               $673,830            $481,925       $530,123      $325,294
Assumed               261,470             147,705        216,881        95,846
Ceded                (139,958)            (81,400)       (89,542)      (64,835)
                      ---------          ---------      ---------     ---------
Net Premiums         $795,342            $548,230       $657,462      $356,305
                      =========          =========      =========     =========

The Group's provision for reinsurance recoverable as of June 30, 2004 and 2003
is as follows:

                                                          2004            2003

Gross reinsurance recoverable                         $266,268        $267,561
Provision for uncollectible balances                   (10,588)         (9,151)
                                                      ----------       ---------
Net reinsurance recoverable                           $255,680        $258,410
                                                      ==========       =========

The Group holds collateral against certain reinsurance recoverable positions,
totaling $60,606 (2003: $94,470).


6.       Notes Payable, Debt and Financing Arrangements

In November 2003, the Group entered into a $350 Million Letter of Credit/
Revolving Loan Facility (the 'Club Facility'). The following was outstanding
under the Club Facility as at June 30, 2004:

   • Debt outstanding was $50 million, in the form of a 364-day $100 million
    revolving facility with a one year term-out option. It represents an
    unsecured loan to Catlin Group Limited; however, the facility is secured by
    cross guarantees of material subsidiaries. This debt bears interest at
    three-month Libor plus 85 basis points and the Group is required to maintain
    free and unencumbered assets consisting of OECD Government Bonds, US
    Agencies and Corporate Bonds, discounted by 12.5%, sufficient to repay the
    loan at any time. The undrawn portion of the facility costs 35 basis points
    per annum. This loan, which is available under one, two or three month
    renewal periods, can be repaid at any time at the discretion of the Group in
    increments of $10 million. The Group has the option to convert all cash
    advances into a term loan with a final maturity date of no later than
    November 22, 2005.

   • As security for its underwriting, CSL has deposited with Lloyd's a
    clean, irrevocable standby letter of credit ('LOC') amounting to $184,168
    (£101,750). In the event of the Group's failing to meet its obligations
    under policies of insurance written on its behalf, Lloyd's may draw down
    this letter of credit. This LOC became effective on November 24, 2003 and
    has an initial expiry date of December 31, 2008. Collateral of $45 million
    must be provided by June 30, 2005 and a further $30 million by June 30,
    2006. This LOC costs 130 basis points on the unsecured component and 25
    basis points on the secured. The unutilized portion of the LOC costs 50
    basis points per annum.

   • A second, 1-year $50 million Standby LOC facility is available for
    utilization by CICL. At June 30, 2004, $3,975 in LOC's were outstanding, of
    which $2,046 are issued by CICL Bermuda. Collateral of 112.5% of 50% of the
    face value of the utilised portion of the LOC issued by CICL Bermuda must be
    provided. This LOC facility costs 125 basis points on the unsecured
    component and 25 basis points on the secured. The unutilized portion of the
    LOC costs 35 basis points per annum.


7.       Taxation

Under current Bermuda law, the Company and its Bermuda subsidiary are not
required to pay any taxes in Bermuda on their income or capital gains. The
Company has received an undertaking from the Minister of Finance in Bermuda
that, in the event of any taxes being imposed, the Company will be exempt from
taxation in Bermuda until March 2016.

Income from the Group's operations at Lloyd's is subject to United Kingdom
corporation taxes. Lloyd's is required to pay US income tax on US connected
income ('US income') written by Lloyd's syndicates. Lloyd's has a closing
agreement with the IRS whereby the amount of tax due on this business is
calculated by Lloyd's and remitted directly to the IRS. These amounts are then
charged to the personal accounts of the Names and Corporate Members in
proportion to their participation in the relevant syndicates. The Group's
Corporate Members are also subject to this arrangement but, as UK domiciled
companies, will receive UK corporation tax credits for any US income tax
incurred up to the value of the equivalent UK corporation income tax charge on
the US income.

The Group, through its US operations, is subject to income taxes imposed by US
authorities and is required to file US tax returns. Certain international
operations of the Group are also subject to income taxes imposed by the
jurisdictions in which they operate.

The Group is not subject to taxation other than as stated above. There can be no
assurance that there will not be changes in applicable laws, regulations or
treaties, which might require the Group to change the way it operates or become
subject to taxation.

The income tax provisions for the six months ended June 30, 2004 and 2003 are as
follows:

                                                            2004          2003

Current tax expense                                           $-        $6,188
Deferred tax expense/(benefit)                            16,781         2,691
                                                         --------      --------
Expense/(benefit) for income taxes                       $16,781        $8,879
                                                         ========      ========



8.       Stockholders' Equity

The following is a detail of the number and par value of common shares
authorized, issued and outstanding as of June 30, 2004 and 2003:

 2004
                                                          Issued and
                           Authorized                    Outstanding
                  Number of    Par               Number of              Par
                   Shares     Value               Shares               Value
                    '000      '$000                '000                '$000

Ordinary common
shares,
par value $0.01    250,000    $2,500               154,072             $1,541
per share         ---------  -------              --------            -------
Total              250,000    $2,500               154,072             $1,541
                  =========  =======              ========            =======

           
2003                                                     Issued and
                           Authorized                    Outstanding
                  Number of    Par               Number of              Par
                   Shares     Value               Shares               Value
                    '000      '$000                '000                '$000

Ordinary common
shares,
par value $0.0001   300,000      $30                75,000               $7
per share           ---------  -------              --------            -------
Total               300,000      $30                75,000               $7
                    =========  =======              ========            =======

On July 4, 2002, the Company reorganized its existing share structure. This
involved the reclassification of all authorized and issued share capital into
65,000,000 Class A convertible preference shares and 75,000,000 ordinary common
shares. These were allocated to existing shareholders pro rata to their
shareholding immediately prior to the reorganization.

Following this reorganization, the Company undertook an exercise to raise
additional capital, which was completed during 2002. This involved issuing
457,000,000 Class B-1 preference shares to new investors and 25,000,000 Class
B-2 preference shares to Western General Insurance Ltd, the majority shareholder
prior to the capital raising.

All Class A and Class B preference shares were convertible into ordinary common
shares and were not redeemable. Each preference share was convertible into one
ordinary common share. Preference shares accrued a dividend of 6 percent per
annum compounding semi-annually and preference dividends were not taken in cash
but rather through an issue of new ordinary common shares.

The Company byelaws incorporated an adjustment mechanism whereby the share
capital of the Company would be adjusted, based on a formula relating to the
December 31, 2001 net asset value of the Group, as at December 31, 2003. Under
this formula, the holdings of Class A preference shareholders in Class A
preference shares could be increased by up to 30 million shares and decreased by
up to 50 million shares and their holdings in ordinary common shares could be
decreased by up to 10 million shares. The adjustment resulted in a decrease of
50 million shares in issued and outstanding Class A preference shares and of 1
million shares in issued and outstanding ordinary common shares. This adjustment
was reflected in the financial statements at December 31, 2003 through a
reduction in the value of Class A preference shares and ordinary common shares
and an equivalent increase in additional paid in capital.


On April 6, 2004, the Group completed its initial public offering ('IPO') and
was admitted to the London Stock Exchange plc. Immediately prior to admission,
certain changes to the Company's capital structure took place. Accrued dividends
on preference shares were settled through the issuance of additional common
shares and a small number of share options were exercised. All preference shares
were then converted into common shares and were consolidated on a five-to-one
basis, achieved through a 19-to-1 bonus issuance and a 100-to-1 share
consolidation.

The Group raised $200 million ($182 million net of expenses) through the
issuance of 31,180,000 new shares. In addition, as part of the IPO, existing
shareholders sold a further 23,380,000 shares.

Following the capital changes and the IPO, the Company has 154,071,925 common
shares issued and outstanding. To maintain economic equivalence, the warrants
and stock options that were outstanding at the time of the IPO were also
consolidated on a five-to-one basis and their exercise prices increased by a
factor of five.


9.       Earnings per Share

Basic earnings per share is calculated by dividing the earnings attributable to
common shareholders by the weighted average number of common shares in issue
during the year.

Diluted earnings per share is calculated by dividing the earnings attributable
to all shareholders by the weighted average number of common shares in issue
adjusted to assume conversion of all dilutive potential common shares. The
company has the following potentially dilutive instruments outstanding during
the periods presented:

(i)     Class A cumulative redeemable preference shares;
(ii)    Class B-1 cumulative redeemable preference shares;
(iii)   Class B-2 cumulative redeemable preference shares;
(iv)    Employee stock option plan; and
(v)     Warrants

Reconciliation of the earnings for the half year ended June 30, 2004 and 2003
used in the calculations are set out below:

                                                              2004        2003
                                                             $'000       $'000

Net income attributable to stockholders                     95,846      50,726
Less: preference dividends                                       -     (15,009)
Diluted earnings attributable to ordinary stockholders      95,846      35,717


Reconciliations of the number of shares as at June 30, 2004 and 2003 used in the
calculations are set out below. Share numbers at June 30, 2003 have been
restated for the effects of the 19-to-1 bonus issue and the 100-to-1 share
consolidation that took place immediately prior to the IPO.

                                                           2004          2003
                                                         Number        Number

Weighted average number of shares                    80,676,699    15,000,000
Dilution effect of warrants                           4,700,181     4,630,273
Dilution effect of stock options                      1,457,517     1,430,499
Dilution effect of convertible participating
preference shares                                             -   109,400,000
Dilution effect of accrued dividends on convertible
participating preference shares, to be paid in
common stock                                                  -     2,850,948
Weighted average number of shares on a diluted
basis                                                86,834,397   133,311,720


10.   Subsequent Events

On August 10, the 364-day $100 million revolving facility with a one year
term-out option, part of the Club Facility, was reduced to $50 million, the
amount currently outstanding.


11.   Reconciliation to UK GAAP

The Group's consolidated financial statements are prepared in accordance with US
GAAP, which differs in certain respects from UK GAAP.

The following statements summarize the material adjustments, gross of their tax
effect, which reconcile the net income attributable to group stockholders and
the stockholders' equity under US GAAP to the amounts which would have been
reported had UK GAAP been applied.

Net income                                           Six months ended June 30
                                                         
                                             Note       2004              2003
                                                       $'000             $'000

Net income under US GAAP                              95,846            50,726
Adjustment for:
Deferral of acquisition costs                 (a)          -            (6,002)
Stop loss accounting                          (b)    (10,811)           (6,133)
Goodwill amortization                         (c)     (1,723)           (1,550)
Translation differences                       (d)      2,535               953
Unrealized appreciation on investments        (e)     (7,822)           (1,044)
Taxation                                      (f)      2,915             7,068
                                                      ------            ------
Profit / (loss) after taxation under UK GAAP          80,940            44,018
Payment in kind dividend                      (g)          -           (15,009)
                                                      ------            ------
Retained profit under UK GAAP                         80,940            29,009
                                                      ======            ======


Stockholders' equity                                            At June 30
                                                               
                                                    Note        2004      2003
                                                               $'000     $'000

Stockholders' equity under US GAAP                           913,251   560,587
Adjustment for:
Stop loss accounting                                 (b)      18,278    29,089
Goodwill amortization                                (c)      (8,218)   (4,649)
Taxation                                             (f)      (5,484)   (8,449)
                                                             -------   -------
Stockholders' equity under UK GAAP                           917,827   576,578
                                                             =======   =======

(a)     Under US GAAP, the Group's accounting policy for deferred acquisition
costs ('DAC') defers only those costs directly associated with acquisition of
policies, primarily commissions and other premium levies. Under UK GAAP, the
Group applied a broader definition of DAC such that, in addition to costs
deferred under US GAAP, certain other operating costs were deferred. The Group
followed this approach under UK GAAP for all financial years up to and including
2002. From 2003 onwards, the Group's accounting treatment for DAC under UK GAAP
was adjusted to be entirely consistent with its US GAAP treatment.

(b)     Under US GAAP, the whole account stop loss contract, purchased by
syndicate 2003 to protect underwriting years up to and including 2001, has been
accounted for as a deposit due to its retroactive nature, in accordance with
SFAS 113. As a result, the indemnity amount due under the contract is treated as
a deferred gain to be released to income as recoveries are made from the
reinsurer. Under UK GAAP, this contract has been accounted for as reinsurance
and therefore the full indemnity amount has been recognized as a reinsurance
recovery in 2001. No deferred gain is recognized in the UK GAAP balance sheet,
resulting in a corresponding increase in stockholders' equity.

(c)     Under US GAAP, goodwill has not been amortized in accordance with the
provisions of SFAS 142, starting with its implementation in 2002. Prior to 2002,
goodwill was being amortized over 20 years. Under UK GAAP, this goodwill is
amortized on a straight line basis over a period of 10 years. This results in US
GAAP stockholders' equity exceeding that applicable under UK GAAP with effect
from the 2002 year.

(d)     Translation differences on the translation of functional currency assets
and liabilities into US dollars are recognized in other comprehensive income
under US GAAP. Under UK GAAP, these items are reflected as part of the profit or
loss for the financial year. While the different treatment of these items
affects reported profit under UK GAAP, there is no effect on total stockholders'
equity.

(e)     Unrealized appreciation/(depreciation) on investments is recognized in
other comprehensive income under US GAAP. Under UK GAAP, this is reflected as
part of the profit or loss for the financial year. While the different treatment
of these items affects reported profit under UK GAAP, there is no effect on
total stockholders' equity.

(f)       All of the reconciling items are presented before tax. This line item
represents the tax effect of all of the reconciling items.

(g)     Under US GAAP, this dividend does not affect income or stockholders'
equity, being paid as an issue of new capital. Under UK GAAP, the dividend is
treated as an expense in the statement of operations, offset by a specific
appropriation of stockholders' equity. Accordingly, there is no difference in
total stockholders' equity between US and UK GAAP.


Independent Review Report to the Board of Directors and Shareholders of Catlin
Group Limited


Introduction

We have been instructed by the Company to review the financial information which
comprises the consolidated balance sheets, consolidated statements of
operations, consolidated statements of changes in stockholders' equity and
accumulated other comprehensive income, consolidated statements of cash flows as
at 30 June 2004, comparative figures and associated notes. We have read the
other information contained in the Interim Report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.


Directors' responsibilities

The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.


Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom and United States Auditing Standards
and therefore provides a lower level of assurance than an audit. Accordingly we
do not express an audit opinion on the financial information.

This report, including the conclusion, has been prepared for and only for the
addressees for the purpose of the Listing Rules of the Financial Services
Authority and for no other purpose. We do not, in producing this report, accept
or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.


Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2004.

PricewaterhouseCoopers
Bermuda
13 September 2004

Notes:

a) The maintenance and integrity of the Catlin Group Limited web site is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the Interim Report
since it was initially presented on the web site.

b) Legislation in the United Kingdom governing the preparation and dissemination
of financial information may differ from legislation in other jurisdictions.



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