Credit Facility

Lancashire Holdings Limited
23 May 2006

                          Lancashire Holdings Limited



Hamilton, Bermuda, 23 May 2006



              LANCASHIRE ANNOUNCES US$350 MILLION CREDIT FACILITY



Lancashire Holdings Limited today announced that it and its wholly owned
subsidiary Lancashire Insurance Company Limited have entered into a US$350
million three year letter of credit facility (the 'Facility').



The letters of credit will be used to support obligations under reinsurance
liabilities of Lancashire Insurance Company Limited.  The Facility also has a
US$75 million sub-limit for revolving loans which will be used for working
capital and other corporate purposes.



Neil McConachie, Chief Financial Officer and Chief Operating Officer, commented:
'We are very pleased to have these leading financial institutions showing their
support for the Lancashire group. This facility boosts the long-term financial
flexibility and strength we have committed to our clients.'



The Facility was arranged by Banc of America Securities LLC as Sole Lead
Arranger and Sole Book Manager.  HSBC Bank USA, National Association and The
Bank of New York are Co-Syndication agents.  ING Bank N.V., London Branch and
Barclays Bank PLC are Co-Documentation Agents.  Bank of America, N.A. is
Administrative Agent, Fronting Bank and L/C Administrator.  JPMorgan Chase Bank,
N.A. and Bayerische Hypo und Vereinsbank AG, New York Branch are also lenders
under the Facility.





For further information, please contact:


Lancashire Holdings                                   [phone]
Neil McConachie

Financial Dynamics                                    [phone]
Rob Bailhache
Nick Henderson





www.lancashire.bm



About Lancashire



Lancashire was established in 2005 as a new insurance and reinsurance business
to take advantage of the favourable underwriting conditions expected to arise
from the large insured losses incurred in 2004 and 2005.  The Company has an
A.M. Best rating of A- (Excellent) with a stable outlook.



Lancashire was admitted to AIM on 16 December 2005 following an Offer of Common
Shares to investors.  The Common Shares trade on AIM under the ticker symbol
LRE.









                   NOTE REGARDING FORWARD-LOOKING STATEMENTS



CERTAIN STATEMENTS MADE IN THIS ANNOUNCEMENT OR ON THE CONFERENCE CALL 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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