Credit Facility

Lancashire Holdings Limited
17 July 2007


                                
17 July 2007


              LANCASHIRE ANNOUNCES US$200 MILLION CREDIT FACILITY

Lancashire Holdings Limited today announced that it and its wholly owned
subsidiary Lancashire Insurance Company Limited have entered into a $200 million
secured five year letter of credit facility (the 'Facility').

The Facility will be used to support obligations of Lancashire Insurance Company
Limited under reinsurance contracts. The Facility also has a $75 million
sub-limit for revolving loans, which can be used for working capital and other
corporate purposes. The Facility replaces the existing $350 million three year
letter of credit facility.

Neil McConachie, Chief Financial Officer, commented: 'With favourable conditions
in the credit markets, we considered this an opportune time to refinance the
Facility at very attractive terms and at a size which is appropriate for the
expected letter of credit needs of our predominantly direct portfolio over the
medium term. We are very pleased to have a group of leading financial
institutions continuing to show their strong support for the Lancashire group.
This facility maintains the long-term financial flexibility and strength we have
committed to our clients.'

The Facility was arranged by Banc of America Securities LLC and HSBC Securities
(USA) Inc. as Joint Lead Arrangers and Joint Book Managers. Bank of America,
N.A. is Administrative Agent, Fronting Bank and L/C Administrator. HSBC Bank
USA, National Association is the Syndication Agent. ING Bank N.V., London
Branch, The Bank of New York, Lloyds TSB, Barclays Bank PLC and JPMorgan Chase
Bank, N.A. are also lenders under the Facility.

Neil McConachie added 'We believe our business plan, as a diversified direct
specialty insurance writer, lends itself to strong performance through hard and
soft cycles. We underwrite a diverse worldwide portfolio of short-tail property
risks. Programs are mostly written on a direct basis, and the majority of the
2007 book is not expected to be significantly exposed to natural catastrophes.
We believe this strategy will generate above average returns for shareholders
over time.'

For further information, please contact:

Lancashire Holdings
Neil McConachie                      [phone]
Greg Lunn                            [phone]

Financial Dynamics
Robert Bailhache                     [phone]
Nick Henderson                       [phone]


www.lancashiregroup.com

About Lancashire

Lancashire, through its UK and Bermuda-based insurance subsidiaries, is a global
provider of specialty insurance  products.  Its insurance subsidiaries carry the
Lancashire group rating of A minus (Excellent) from A.M. Best with a  stable
outlook.  Lancashire has capital in excess of US$1 billion and its common shares
trade on AIM under the ticker  symbol LRE.  Lancashire is headquartered at
Mintflower Place, 8 Par-La-Ville Road, Hamilton HM 08, Bermuda.  The  mailing
address is Lancashire Holdings Limited, P.O. Box HM 2358, Hamilton HM HX,
Bermuda.  For more information on  Lancashire, visit the Company's website at
www.lancashiregroup.com.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS MADE IN THIS ANNOUNCEMENT THAT ARE NOT BASED ON CURRENT OR
HISTORICAL FACTS ARE FORWARD-LOOKING IN  NATURE INCLUDING, WITHOUT LIMITATION,
STATEMENTS CONTAINING WORDS 'BELIEVES', 'ANTICIPATES', 'PLANS', 'PROJECTS', 
'INTENDS', 'EXPECTS', 'ESTIMATES', 'PREDICTS', 'MAY','WILL', 'SEEKS', 'SHOULD'
OR, IN EACH CASE, THEIR NEGATIVE OR  COMPARABLE TERMINOLOGY.  ALL STATEMENTS
OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDING, WITHOUT LIMITATION, THOSE 
REGARDING THE GROUP'S FINANCIAL POSITION, RESULTS OF OPERATIONS, LIQUIDITY,
PROSPECTS, GROWTH, BUSINESS STRATEGY, PLANS  AND OBJECTIVES OF MANAGEMENT FOR
FUTURE OPERATIONS (INCLUDING DEVELOPMENT PLANS AND OBJECTIVES RELATING TO THE
GROUP'S  INSURANCE BUSINESS) ARE FORWARD-LOOKING STATEMENTS.  SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,  UNCERTAINTIES AND OTHER
IMPORTANT FACTORS THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS OF THE GROUP  TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH  FORWARD-LOOKING
STATEMENTS.  THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS
ANNOUNCEMENT OR OTHER  INFORMATION CONCERNED. LANCASHIRE HOLDINGS LIMITED
EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING (SAVE AS REQUIRED  TO COMPLY
WITH ANY LEGAL OR REGULATORY OBLIGATIONS (INCLUDING THE AIM RULES)) TO
DISSEMINATE ANY UPDATES OR REVISIONS  TO ANY FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN TO REFLECT ANY CHANGES IN THE GROUP'S EXPECTATIONS WITH REGARD 
THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH
STATEMENT IS BASED.


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