Dubai Subsidiary

Lancashire Holdings Limited
28 November 2006


                          Lancashire Holdings Limited


Hamilton, Bermuda, 28th November 2006


                  LANCASHIRE MIDDLE EAST MARKETING SUBSIDIARY

Lancashire Holdings Limited ('Lancashire' or 'the Company') today announced that
it intends to incorporate a subsidiary  in the Dubai International Financial
Centre ('DIFC') and submit an application to the Dubai Financial Services 
Authority ('DFSA') seeking status for the new subsidiary as an authorised
insurance intermediation firm.

The new company will allow Lancashire to market its UK and Bermuda-based
insurance subsidiaries more effectively and  efficiently in the region.
Richard Brindle, Chief Executive Officer, commented:

'This application demonstrates our commitment to building the Lancashire brand.
In the short term we do not anticipate  any change to our existing forecasts. In
the longer term having a presence in the Middle East will allow the Lancashire 
Group to grow a solid book of business that will complement our existing
underwriting.  Using the DIFC as our marketing  centre to source the business,
we intend to write non-catastrophe exposed engineering risks in the region and
other  lines such as energy.  We have chosen the DIFC because it is the regional
domicile of choice.'

The application is subject to DFSA and DIFCA approval.

For further information, please contact:

Lancashire Holdings                         [phone]
Greg Lunn

Financial Dynamics                          [phone]
Rob Bailhache
Nick Henderson



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 $1 billion dollars 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.lancashire.bm.


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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