Florida Legislation Statement

Lancashire Holdings Limited
31 January 2007


Lancashire Holdings Limited

31 January 2007

 Lancashire comments on impact of Florida State hurricane reinsurance facility
                                    increase


Lancashire Holdings Limited ('Lancashire' or the 'Company') today commented on
the impact of the recent legislation which will significantly increase the
underwriting capacity of the Florida State hurricane insurance facility. The
Florida Hurricane Catastrophe Fund was formed to provide cost-effective
reinsurance to underwriters of insurance in Florida, including the state-run
insurer of last resort, Citizens Property Insurance Corporation, which will also
increase its underwriting capacity and have greater freedom to charge lower
rates.

Richard Brindle, Chief Executive Officer and Chief Underwriting Officer,
commented:

'Lancashire writes a diversified mix of short-duration insurance lines. We
believe this approach will generate attractive returns for our shareholders over
time.

'Lancashire's business plan did not include Florida property catastrophe treaty
reinsurance and, to date, we have not written any such business. Further, we do
not write Florida specific residential risks. Our Florida specific risks are
limited to commercial property business on a facultative basis, the premium on
which represented a very small percentage of Lancashire's total gross written 
premium in 2006. The great majority of our book comprises risks outside Florida, 
or risks written on a national or worldwide basis, and mostly direct insurance 
business.'

Richard Brindle added:

'Looking ahead for 2007, we are optimistic on the trading outlook for
Lancashire. Our core area of expertise has always been in direct specialist
risks and we are confident our particular model is positioned well to perform
though the cycle. As always, regardless of any changes in our market
environment, underwriting will come first. '


For further information, please contact:

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

Financial Dynamics                          [phone]
Rob Bailhache
Nick Henderson


www.lancashire.bm

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.

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 MARKET CONDITIONS AND THE GROUP'S FINANCIAL POSITION, RESULTS OF
OPERATIONS, LIQUIDITY, PROSPECTS, GROWTH,  BUSINESS STRATEGY, PLANS  AND
OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS 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, INCLUDING THE IMPACT OF  LEGISLATIVE AND REGULATORY CHANGES ON
LANCASHIRE'S BUSINESS, THE IMPACT OF COMPETITION ON MARKET TRENDS IN PREMIUM 
RATES AND THE CAPACITY PROVIDED BY COMMERICAL AND GOVERNMENTAL ENTITIES.  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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