Admission to AIM

Lancashire Holdings Limited
16 December 2005

                          Lancashire Holdings Limited



    For publication in the United Kingdom and Bermuda only. Not for release,
publication or distribution in the United States of America, Australia, Canada,
                 South Africa, the Republic of Ireland or Japan



Hamilton, Bermuda 16 December, 2005



                LANCASHIRE ADMITTED TO TRADING IN LONDON ON AIM



Introduction

Lancashire Holdings Limited ('Lancashire' or the 'Company') is delighted to
announce that its common shares have been admitted to trading on AIM following
the raising of approximately US$1.1 billion (before expenses) in new capital.
Unconditional dealings in the Company's common shares will therefore commence
today.



Lancashire's ticker is LRE.



The Rating Committee of A.M. Best Company, Inc. notified Lancashire, on an
indicative basis, 9 December 2005 that it intends to issue a Financial Strength
Rating of A- (Excellent) to Lancashire Insurance Company Limited subject to
confirmation of receipt of necessary funds, which confirmation is expected to be
made on or before 19 December 2005.



Lancashire's Proposed Business Activities

In the retrocession and reinsurance classes, Lancashire intends to focus on non
marine property catastrophe retrocession and marine and energy excess of loss
reinsurance.  In the insurance classes, the business will concentrate on the
offshore and onshore energy, property direct and facultative, property
terrorism, marine (hull, total loss and war) and aviation terrorism classes.



Lancashire expects that all of its insurance and reinsurance business will be
introduced by brokers - both the large international groups and the smaller,
specialist intermediaries.  Lancashire conducts its operations and is managed
and controlled from Bermuda.  A UK incorporated marketing company, Lancashire
Insurance Marketing Services Limited, has been formed for business introduction
purposes.



Board and Management



Lancashire has assembled a carefully selected team chosen for their
complementary skills, insurance market following and experience of building a
business.  Bob Spass of Capital Z is non-executive Chairman.  Bob was a
co-founder of both Insurance Partners, L.P. and Capital Z, two private equity
firms specialising in the financial services arena.  Richard Brindle is Chief
Executive Officer and Chief Underwriting Officer.  Richard brings a strong
underwriting track record to the business from his time at Syndicate 488 and
Syndicate 2488 at Lloyd's.  Ralf Oelssner, Colin Alexander, William Spiegel of
Cypress and Barry Volpert of Crestview are confirmed as non-executive directors.



Neil McConachie will join the Board as Chief Financial Officer and Chief
Operating Officer from Montpelier Re where he is, inter alia, currently
Treasurer and Chief Accounting Officer.  Alex Richards (formerly of Renaissance
Re), Alex Maloney (formerly of Zurich Global Energy) and Charles Mathias
(formerly of RK Harrison) are also joining Lancashire's executive team.



    For publication in the United Kingdom and Bermuda only. Not for release,
publication or distribution in the United States of America, Australia, Canada,
                 South Africa, the Republic of Ireland or Japan



Financing

Lancashire's founders and related investors have subscribed for approximately
US$560 million of common shares.  This investor group includes Capital Z,
Crestview Partners, Cypress, Moore Capital, Och-Ziff and SAB Capital.



In addition, a number of leading international investors have subscribed for
US$403 million of common shares.



Lancashire has also issued a total of approximately US$125 million of debt
capital through the issue of trust preferred securities and subordinated notes.



Together with initial capital subscribed by Lancashire's founders, the Company
has raised total equity and debt capital of approximately US$1.1 billion.



Merrill Lynch is acting as Nominated Adviser and Broker to Lancashire and acted
as Sole Bookrunner and Lead Manager on the placing of common shares (the '
Placing').  Benfield Advisory and Kinmont acted as Lancashire's joint financial
advisers.  JPMorgan Cazenove acted as Joint Lead Manager on the Placing; Fox-
Pitt, Kelton and Teather & Greenwood were Co-Lead Managers.



It should be noted that although A.M. Best has indicated that (subject to
receipt of necessary funds) Lancashire Insurance Company Limited will be granted
an 'A-' financial strength rating, if A.M. Best is unable or unwilling for any
reason to grant the initial 'A-' financial strength rating to Lancashire
Insurance Company Limited after the Group has demonstrated to A.M. Best the
receipt of necessary funds, it is likely that the common shares would be
suspended and the Company may seek to return the net proceeds of the Placing to
shareholders.



    For publication in the United Kingdom and Bermuda only. Not for release,
publication or distribution in the United States of America, Australia, Canada,
                 South Africa, the Republic of Ireland or Japan


Contacts:

Merrill Lynch
Rupert Hume-Kendall                                     [phone]
Simon Fraser
Matthew Thomson

Benfield Advisory
Tristan McDonald                                        [phone]
Ross Milburn

Kinmont
Gavin Kelly                                             [phone]
John O'Malley

Financial Dynamics
Robert Bailhache                                        [phone]
Dominick Peasley





Merrill Lynch, JPMorgan Cazenove, Fox-Pitt, Kelton, Teather & Greenwood,
Benfield Advisory and Kinmont, each of which is authorised and regulated in the
UK by the Financial Services Authority, each acted for the Company and no-one
else in connection with the Placing and Admission and will not be responsible to
anyone other than the Company for providing the protections afforded to their
respective clients or for providing advice in relation to the Placing and
Admission, this announcement or any other matter.  Merrill Lynch's
responsibilities as the nominated adviser to the Company are owed solely to the
London Stock Exchange and are not owed to the Company or to any Director or to
any other person, whether in respect of any decision to acquire common shares,
in relation to any part of this announcement or otherwise.



In connection with the Placing, no common shares of the Company were marketed to
or were made available for purchase by the public in the United Kingdom, Bermuda
or elsewhere.



The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.



    For publication in the United Kingdom and Bermuda only. Not for release,
publication or distribution in the United States of America, Australia, Canada,
                 South Africa, the Republic of Ireland or Japan





No offer, invitation or inducement to acquire common shares or other securities
in the Company or any other company is being made by this announcement.



Certain statements contained in this announcement may constitute forward-looking
statements. Any such forward-looking statements involve risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
Lancashire, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements speak only as of
the date of this announcement and there can be no assurance that the results and
events contemplated by such forward-looking statements will, in fact, occur. The
Company and the Directors expressly disclaim any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statement
contained herein, save as required to comply with any legal or regulatory
obligations (including the AIM Rules).



This announcement is not an invitation nor is it intended to be an inducement to
engage in investment activity for the purpose of Section 21 of the Financial
Services and Markets Act 2000  ('FSMA'). The Company's common shares were in any
event placed only with (i) persons who have professional experience in matters
relating to investments and who are investment professionals within the meaning
of Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 of the United Kingdom (the 'Financial Promotion Order') or
(ii) persons who fall within Article 49(2)(a) to (d) ('high net worth companies,
unincorporated associations etc.') of the Financial Promotion Order (all such
persons together being referred to as 'relevant persons'). Any investment or
investment activity to which this announcement relates is available only to
relevant persons in the United Kingdom and will be engaged in only with relevant
persons. Anyone other than a relevant person must not rely on this announcement.



The contents of this announcement, which have been prepared by and are the sole
responsibility of Lancashire Holdings Limited, have been approved by Merrill
Lynch International of Merrill Lynch Financial Centre, 2 King Edward Street,
London EC1A 1HQ, solely for the purposes of section 21(2)(b) of FSMA.



THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION INTO THE
UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA, THE REPUBLIC OF IRELAND OR
JAPAN.  NEITHER THIS ANNOUNCEMENT NOR ANY COPY OF IT MAY BE TAKEN OR DISTRIBUTED
OR PUBLISHED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA,
SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR DISTRIBUTED TO U.S. PERSONS.



    For publication in the United Kingdom and Bermuda only. Not for release,
publication or distribution in the United States of America, Australia, Canada,
                 South Africa, the Republic of Ireland or Japan





THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT
INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE INTO
THE UNITED STATES OR ANY OTHER JURISDICTION.   SECURITIES MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED OR AN APPLICABLE EXEMPTION FROM REGISTRATION.  THE SECURITIES
OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE SO REGISTERED.
THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES, AUSTRALIA,
CANADA, OR JAPAN OR ANY OTHER JURISDICTION.



Stabilisation / FSA


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