Corporate Reorganisation

Hiscox PLC
23 October 2006


Monday 23 October 2006
For immediate release



                                   Hiscox plc

                    Announcement of corporate reorganisation

On 11 September 2006 Hiscox plc ('Hiscox') confirmed in the announcement of its 
interim results that its Board had approved a corporate reorganisation to introduce
a new Bermudian domiciled holding company for the Group ('Hiscox Ltd'). Hiscox today
announces that a circular setting out full details of the corporate reorganisation 
together with a prospectus in relation to the admission of Hiscox Ltd to listing 
and trading on the London Stock Exchange's main market for listed securities have
been sent to shareholders.

Key features of the corporate reorganisation

• A new Bermudian domiciled holding company for the Group, Hiscox Ltd, has been 
  established
• Shareholders of Hiscox will receive one share in Hiscox Ltd for each share held 
  in Hiscox
• Application will be made for Hiscox Ltd to be listed on the London Stock Exchange
  and it is expected to replace Hiscox as a member of the FTSE 250 Index
• Shares in Hiscox Ltd will be tradable in CREST through depository interests
• It is not expected that Hiscox's existing dividend policy will be affected and
  shareholders will have the right to elect to receive UK sourced dividends
• The corporate reorganisation is expected to be neutral in tax terms for UK 
  resident shareholders
• Hiscox Ltd will report consolidated results under IFRS in sterling

Background to the corporate reorganisation

Hiscox's strategy is to build the Hiscox group of companies ('Group') on the 
complementary foundations of internationally traded insurance and reinsurance
business, balanced by local retail insurance business. In 2005, Hiscox formed
Hiscox Bermuda as a reinsurer in the Bermudian market and also established Hiscox
USA in New York as the base through which the Group underwrites and distributes
specialist products in the USA. These developments were in response to a
recognition that Hiscox needed to have operations on the ground in the US where
the non-life markets are considered to be the largest in the world and in
Bermuda which had become one of the major reinsurance centres. In addition, a
significant proportion of the business that is written in Hiscox Global
Markets, the Group's international market business unit substantially based in
Lloyd's, emanates from the USA. US business accounted for 36.3 per cent of the
Group's gross earned premiums in 2005. With the formation of Hiscox Bermuda and
Hiscox USA and the strong growth of these divisions anticipated by the
directors, the amount of US and Bermudian originated business is expected to
increase significantly.

The Board has now decided that it is appropriate to move the domicile of the
Group to Bermuda for the following reasons:

• as the major issues and risks are expected increasingly to arise in Hiscox's
  Bermudian and US businesses, the Board believes that the centre for
  decision making needs to be in close proximity to the originating markets for
  those risks;

• it is anticipated that such a move will demonstrate Hiscox's commitment to the 
  Bermudian and US markets and consequently lead to an increased flow of business
  from insurance brokers active in those markets. Indeed, since the opening of 
  Hiscox Bermuda and Hiscox USA a number of new brokers have begun to show new 
  business to the Group; and

• many of the Group's principal competitors already enjoy the substantial 
  potential tax benefits that would become available to Hiscox Ltd and that this 
  scheme should improve the prospects for the Group's share price.

Overview of the corporate reorganisation

The corporate reorganisation is proposed to be effected by way of a scheme of
arrangement under section 425 of the Companies Act (the 'Scheme'). The Scheme is
subject to various conditions including the passing of the requisite
shareholders resolutions and the approval of the Court. If these conditions are
satisfied and the Scheme is approved and implemented in full, Hiscox Ltd will
own the entire issued share capital of Hiscox. Hiscox Ltd will then be listed on
the London Stock Exchange in place of Hiscox and is expected to replace Hiscox 
as a member of the FTSE 250 Index. Existing shareholders will receive one Hiscox
Ltd share for each share held in Hiscox. The listing of the existing Hiscox shares 
will then be cancelled. The effective date for the Scheme and date of admission 
to listing is expected to be 12 December 2006.

The Scheme requires the approval of shareholders at a Court meeting. If the
Scheme is approved by the requisite majority at the Court meeting, an
application will be made to the Court to sanction the Scheme. Shareholders will
also be asked to approve resolutions implementing various matters in connection
with the Scheme at the Court meeting and Extraordinary General Meeting to be
held at 11.00 am on 15 November 2006.

It is intended that the Scheme be neutral in tax terms for UK-resident
shareholders. In particular, a UK-resident Hiscox shareholder who receives
Hiscox Ltd shares under the Scheme should not be charged for capital gains tax
or corporation tax on chargeable gains as a result of the exchange of his Hiscox
shares for Hiscox Ltd shares.

Hiscox Ltd will, shortly after the Scheme becomes effective, put in place a
dividend access mechanism which is designed to preserve the current UK tax
treatment of UK-resident Hiscox shareholders in relation to dividends to be paid
by Hiscox Ltd. Under this dividend access mechanism, holders of Hiscox Ltd
shares may elect to be paid dividends from Hiscox via a trustee rather than from
Hiscox Ltd. Hiscox Ltd will send further details of the plan to shareholders and
an explanation of how holders of Hiscox Ltd shares may elect to receive
dividends from Hiscox shortly after the Scheme becomes effective.

For those shareholders who want their Hiscox Ltd shares to be settled through
the CREST system, a depositary arrangement involving the issue of depositary
interests representing the underlying shares in Hiscox Ltd will be put in place.
Pursuant to this arrangement a depositary, Capita IRG Trustees Limited, will
hold the uncertificated shares in Hiscox Ltd and issue depositary interests
representing the underlying shares which will be held on trust for the holders
of the depositary interests. The depositary interests will be independent
securities constituted under English law and may be held and transferred through
the CREST system.

Hiscox will write to participants in the Hiscox Employee Share Schemes in due
course to explain the effect of the corporate reorganisation on their
participation in more detail. Hiscox Ltd has adopted new employee share schemes,
which are, in all material respects, the same as the current Hiscox employee
shares schemes.

Board of Hiscox Ltd

Robert Hiscox, Bronek Masojada, Stuart Bridges and Robert Childs, Hiscox's
current executive directors, will continue in their roles as the executive
directors of Hiscox Ltd. Carol Franklin Engler and Sir Mervyn Pedelty, currently
non-executive directors of Hiscox, have each been appointed a non-executive
director of Hiscox Ltd. In the event that the Scheme becomes effective Anthony
Howland Jackson, Derek Netherton and Adrian Auer will resign as non-executive
directors of Hiscox and will not become directors of Hiscox Ltd. The Board would
like to thank each of them for their hard work and contribution to Hiscox's
success during their directorships. Daniel Healy, Dr James King, Andrea Rosen
and Dirk Stuurop have each been appointed a non-executive director of Hiscox Ltd.
Details of the new directors are set out below.

New directors of Hiscox Ltd

Daniel M. Healy (Non-executive Director) (Aged 62)
Daniel M. Healy joined North Fork Bancorporation in 1992 as Executive Vice
President and Chief Financial Officer. He has been a member of its Board of
Directors since 2000. Previously he was a partner with KPMG LLP specialising in
financial services, technology and other commercial enterprises. He was Managing
Partner of the San Jose, California and Long Island, New York offices and held
other positions in that firm during his tenure. He is a member of the Board of
Directors and Executive Committee of Harlem RBI, a not for profit organisation,
promoting education to underprivileged children in East Harlem, New York.

Dr. James A.C. King (Non-executive Director) (Aged 67)
James King is chairman of the Bank of N.T. Butterfield & Son Limited. He also
chairs Keytech Limited, the Bermuda Telephone Company Ltd, the Argus Group of
Companies and Grotto Bay Properties Ltd. Dr. King is a graduate of the
University of Toronto, and a fellow of the Royal College of Surgeons, Canada,
and the American College of Surgeons.

Andrea S. Rosen (Non-executive Director) (Aged 52)
Andrea S. Rosen was previously Vice Chair of TD Financial Group and President of
the TD Canada Trust from 2002 to 2005. Prior to this she held various positions
within the TD Financial Group from 1994 to 2002, including Executive Vice
President of TD Commercial Banking and Vice Chair of TD Securities. She was Vice
President of Varity Corporation from 1991 to 1994 and held various positions
with Wood Gundy Limited from 1981 to 1990.

Dirk A. Stuurop (Non-executive Director) (Aged 58)
Dirk A. Stuurop is a private investor and managing partner of Lighthouse
Holdings LLC, a real estate development firm. He has also been Vice Chairman of
the Board of RAM Holdings Limited, a Bermudian domiciled reinsurance operation,
since 2004. Dirk was President of Stuurop & Company, a privately owned firm
providing strategic advice to executive managements and boards of directors. In
1999 he retired as Chairman of Global Financial Institutions at Merrill Lynch
where he worked from 1982. He then served as Chairman of Worldinsure Ltd., a
privately owned provider of solutions to the Life Insurance Industry, from 2000
to 2002. He also served as Senior Executive Director to Banc of America
Securities in 2003.

Expected timetable of key events

Circular and prospectus sent to shareholders                   23 October 2006
 
Court Meeting                                     11.00 am on 15 November 2006

Extraordinary General Meeting                     11.15 am on 15 November 2006

Last day for dealings in Hiscox shares                        11 December 2006

Scheme record time                                 6.00 pm on 11 December 2006

Effective date of Scheme                                      12 December 2006

     
Cancellation of Hiscox shares,
admission of Hiscox Ltd shares
to the Official List and commencement
of dealings in Hiscox Ltd shares on 
the London Stock Exchange                                     12 December 2006


This timetable is based on Hiscox's expectations as at the date of the prospectus 
and may be subject to change.

Each of UBS Limited and N M Rothschild & Sons Limited is acting for Hiscox 
and Hiscox Ltd in connection with the corporate reorganisation and no-one else
and will not be responsible to anyone other than Hiscox plc and Hiscox Ltd for
providing the protections afforded to each of their respective clients or for 
providing advice in relation to the corporate reorganisation or any other matters
referred to in this document.

Enquiries:

Hiscox plc
Robert Hiscox       Chairman                              020 7448 6011
Bronek Masojada     Chief Executive                       020 7448 6012
Stuart Bridges      Finance Director                      020 7448 6013
Rebecca Olejnik     Corporate Communications              020 7448 6332

Maitland
Philip Gawith                                             020 7379 5151
Richard Farnsworth                                        020 7379 5151

UBS Investment Bank                                      
John Woolland                                             020 7567 8000
Lucy Phillips                                             020 7567 8000


N M Rothschild & Sons Limited
Jonathan Eddis                                            020 7280 5000


Notes to editors:

About Hiscox plc

The Hiscox Group is a specialist insurance group listed on the London Stock
Exchange. The Group operates through six insurance underwriting divisions:
Hiscox Global Markets, Hiscox UK, Hiscox Europe, Hiscox Guernsey, Hiscox USA and
Hiscox Bermuda.

In its unaudited consolidated interim results for the six months to 30 June
2006, the Hiscox Group reported gross premiums written of £625.1 million. As at
30 June 2006, the Group's net asset value was £588.4 million.

For further information, visit www.hiscox.com

The circular and prospectus are available for inspection at the UK Listing
Authority's Document Viewing Facility, which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

Telephone: [phone]

Copies of the circular and prospectus are also available for inspection at the
registered office of Hiscox plc (1 Great St Helen's, London EC3A 6HX) and Hiscox
Ltd (Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda) and at the
offices of Allen & Overy LLP, One Bishops Square, London E1 6AO. Copies of the
prospectus may be obtained, free of charge, from Hiscox plc or Hiscox Ltd (as
above).





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