Half Yearly Report

PRESS RELEASE 20 SEPTEMBER 2012

FOR IMMEDIATE RELEASE

INTERIM RESULTS ANNOUNCEMENT

Tawa plc

 Interim results for the six months ended 30 June 2012

Tawa on the move!

Tawa plc ("Tawa" or "the Group") today announces unaudited interim results for the six months ended 30 June 2012.

Activity Highlights

·; On track for the 2012 plan;

·; GBP £14 million released from the tax escrow;

·; On 26 January 2012, the consortium comprising Tawa plc, Skuld, and Paraline Group Limited completed the acquisition of Whittington Insurance Markets Limited (now Asta Capital Limited);

·; On 19 April 2012, Tawa completed the acquisition of Hamburger Internationale Rückversicherung ("HIR"), the holding company for the Chiltington group of companies;

·; On 5 June 2012 Swiss Re transferred 74% of its shares of ASS Assekuranz Service-und Sachverständigen GmbH ("ASS") to Chiltington International Holding GmbH (73%) and Pro Insurance Solutions Limited (1%). ASS is a specialised service provider in disability claims handling. Swiss Re will retain 26% of the shares.

Finance Highlights

·; Reduced loss for the half year: $6.5 million (30 June 2011: loss $9.8 million excluding profit on set-up of QX Re); majority linked to continued investment in incubators;

·; Positive earnings from risk carriers aggregated of $1.6 million (30 June 2011: loss $5.8 million excluding QX Re profits of $20.9 million);

·; Downscaling of risk carriers reserves of $16 million, including $12 million for associate CX Re;

·; Group net assets: $193.3 million (31 December 2011: $198.2 million); and

·; Net assets per share in US dollars : $1.70 /£1.10per share (31 December 2011: $1.75 / £1.13);

Tawa set its goal for 2012 of focussing on volatility reduction, portfolio downscaling and potential sales of some assets. The positive contribution from the risk carriers vindicates this strategy. The balance of the lower income from Pro from its legacy business, continuing investment into the incubators to support Q360 and Lodestar Marine start-ups and the one-off acquisition expenses of Asta are, as expected, still affecting this half year's financial results. Management remain positive that these investments will deliver financial growth and provide a platform for further opportunities in the future.

Gilles Erulin, Chief Executive, commented:

"Tawa is on the move. On the move potentially as to its shareholders, but also internally. We have set ourselves a challenging and exciting road map for this year and we are on target for its key components, such as divestment, burn rate reduction and internal reorganization. We welcome success such as extraction from the tax assets, launch of Lodestar Marine and 45 percent growth on new clients' billings. Meanwhile we remain focused on our service division EBITDA generation which remains insufficient in aggregate. We are in the middle of the transition phase and we are very optimistic for the prospects of the platform we have created."

--ENDS-

Enquiries:

Notes for Editors:

Tawa plc was formed in 2001 and is a specialised investor in the insurance industry. In the last few years, Tawa has moved from being a pure run-off risk owner towards being a multi-segment investor in the insurance market, expanding significantly in the servicing arena of the international insurance industry.

Tawa invests in acquiring run-off portfolios ("Portfolios", "Risk Carriers") and investing in servicing business. The Group also operates as an incubator for new projects and has invested alongside professional teams to create two new businesses, Q360 and Lodestar Marine, in addition to developing its own products to serve the insurance market as a whole such as STRIPE®.

On the portfolio front, Tawa has acquired, since its formation, six insurance entities in run-off - CX Reinsurance Company Limited, KX Reinsurance Company Limited, LGIC Holdings, LLC, PXRE Reinsurance Company, Island Capital Limited and OX Reinsurance Company Limited. As an alternative technique to assuming run-off risks, Tawa has also established a dedicated reinsurance vehicle in Bermuda to reinsure portfolios. On the service side, Tawa acquired Pro Insurance Solutions Ltd (Pro) in 2009 and the HIR group in April 2012. HIR owns the Chiltington Consulting Group. Through HIR, Tawa now offers a vehicle for European run-off portfolio transfers under the European Union portfolio transfer directive.

The Group's combined team of approximately 400 professionals service a number of the largest insurance businesses in the UK and Europe and deliver a market-wide third-party servicing capability and cover London's company and Lloyd's markets as well as Europe, Bermuda, South America and the USA. The service companies provide underwriting, claims management, broking and consulting services to a broad array of international clients across the insurance market, whether active underwriters or run-off. Pro has also established an innovative platform to provide turnkey services supporting clients wishing for immediate start of a new broking or MGA venture.

As part of its expansion in the Lloyd's market, in January 2012, Tawa became the owner of 33% of Asta Capital Limited, the leading turnkey agency management services company in Lloyd's.

In July 2007 Tawa plc was floated on the AIM market.

Further information can be found on the Company's website: www.tawaplc.co.uk.

Highlights

Since the beginning of the year Tawa plcs ("Tawa") energy regarding the run-off portfolio has been focused on volatility reduction, portfolio downscaling and potential sales of some assets. On the Servicing side efforts are oriented towards generating profitable growth, integration of our platforms across the various subsidiaries and regions, and cost synergies. Results of those work streams do not yet compensate for the expense of the continuing investment in the recent start-ups, nor the cost of closing prior year acquisitions. The Group has continued to expand during this half year and management remain positive that these investments will deliver financial growth and provide a platform for further opportunities in the future.

·; Loss for the period attributable to owners of the Company was $6.5 million (30 June 2011: loss $9.8 million excluding profit on set-up of QX Re);

·; The Group's total equity has decreased by $4.9 million since 31 December 2011 to $193.3 million as at 30 June 2012;

·; Net assets per share in sterling decreased from £1.13 to £1.10 ($ decreased from $1.75 to $1.70);

·; The Group's net tangible assets are $167.4 million (31 December 2011: $173.5 million).

On 26 January 2012, a consortium comprising Tawa plc, Skuld, and Paraline Group Limited completed the acquisition of Whittington Insurance Markets Limited. The company has since been renamed Asta Insurance Markets Limited under a new holding company set up by the consortium named Asta Capital Limited ("Asta"). This transaction provides Tawa with a platform through which to expand its range of services to the Lloyd's market. Asta is the leading franchise in the Lloyd's agency management market and provides the Group with real scale as a provider of insurance services to the live market. This is highly complementary with the range of consulting and outsourcing services currently provided through Pro. This half year, the positive earnings of Asta managing agency of $1.8 million have been offset by initial acquisition costs and IFRS adjustments of $2.6 million resulting in a $0.8 million net loss accruing to group consolidated accounts.

On 20 April 2012, Tawa completed the acquisition of Hamburger Internationale Rückversicherung ("HIR"), the holding company for the Chiltington group of companies ("Chiltington"). Chiltington provides consultancy and outsource services to the international (re)insurance industry. While strengthening Tawa's UK and US units, this transaction provides a strong footprint in Continental Europe and a unique platform of insurance consulting in South America. Also, through HIR, Tawa now offers a vehicle for European run-off portfolio transfers under the European Union portfolio transfer directive such as the Austrian Oberoesterreichische portfolio received in May 2012, following the Sparkassen portfolio received in late 2011.

Financial review

During the first six months of 2012, Tawa recognised net losses of $6.5 million compared to net profits of $11.1 million in the six months to 30 June 2011. The half-year 2011 figures benefited from the recognition of an immediate profit of $20.9 million following the set-up of QX Reinsurance Company Limited ("QX Re"). During the period Group net assets decreased by $4.9 million, from $198.2 million ($1.75/£1.13 per share) at 31 December 2011 to $193.3 million ($1.70/£1.10 per share) at 30 June 2012 mainly as a result of investment in new or recently acquired business.

Dividend and dividend policy

No dividend will be distributed in 2012 in relation to the results for the 2011 financial year. The Group does not propose the payment of a dividend to shareholders in relation to the six month period to 30 June 2012 (June 2011: nil).

Operational results

Tawa has the following divisions with clearly identified lines of business, namely:

·; Risk carriers/insurance divisionwhich holds the acquired insurance entities in run-off (the risk carriers). Profitability is achieved by effectively managing these assets and liabilities;

·; Service providers which comprise a platform that generates income from both consulting and outsourcing. Consulting typically includes work provided directly for clients and the outsourcing division includes work done on behalf of clients on our operating platform; and

·; Corporate division which comprises incubators, all group overheads, corporate costs, acquisition activities and financing.

Risk carriers/insurance division

Tawa generates value from run-offs in a variety of ways, depending on the nature of each run-off entity in question. These strategies include:

·; Buying net assets at a significant discount to economic value and accelerating capital extraction; and

·; Buying volatile books of business and applying its management techniques to create value and reduce volatility.

This division comprises the results from the following run-off companies in which Tawa held the following interests at the reporting date:

CX Re was initially a subsidiary of the Group but on 21 March 2006 Tawa disposed of 87.35% of its shareholding. In accordance with IFRS, the retained shareholding of 12.65% has been accounted for as an associate since that date. Although the Company disposed of 87.35% of CX Re the deferred consideration receivable on the sale will reflect the current net asset value of CX Re. As at 30 June 2012, the total deferred consideration was $48.0 million (June 2011: $61.9 million / December 2011: $53.8 million).

The risk carriers' net profit of $1.9 million (June 2011: loss of $5.8 million), excluding taxation which is subject to group relief and any intergroup fees which are eliminated on consolidation, is summarised below:

(1) ICG includes the results of ICL and ICE.

(2) The 30 June 2011 comparative excludes the profit of $20.9 million recognised following the set-up of QX Re.

A dividend of $2.4 million was paid by OX Re during the period.

Service providers

Tawa's servicing platform comprises income from both consulting and outsourcing. Consulting typically refers to work provided directly to clients and the outsourcing division refers to work Tawa does on behalf of clients on its operating platform.

This division comprises the results from the following service companies, in which Tawa had the following interests at the reporting date:

(1) Chiltington group of companies reported under this segment comprises all entities listed in Note 4, with the exception of the risk carriers HIR and PIR.

The service providers' net profit of $0.6 million, excluding any taxation which will be eliminated on consolidation under group relief, is summarised below:

(1) Pro includes the results of Pro and Pro IS.

A dividend of $3.2 million was paid by Pro during the period.

No result has been recognised in the period in respect of Chiltington. As part of the integration process implemented post acquisition, there are some operational and procedural changes that need to be addressed to align the Chiltington reporting cycle with that of the Group. It is anticipated that coterminous reporting will be achieved by 31 December 2012.

Corporate division

This division incorporates the corporate costs and Group overheads, incubator costs, acquisition activities and financing.

The corporate divisions' net loss of $6.7 million, excluding any intergroup fees which are eliminated on consolidation, is summarised below:

The ongoing development in incubators remains substantial. Operating costs of Q360 Limited $2.1 million, Lodestar Marine Limited $1.1 million and STRIPE® $0.6 million were only marginally offset by combined revenues of $0.3 million. As these investments represent development of new projects, it is accepted that the generation of positive cash flows will take varying amounts of time and the Group is implementing measures to control costs.

Although Tawa's associate Asta Capital Limited returned a trading profit for the period of $5.4 million, it reported an overall loss for the period of $2.3 million, of which Tawa has a 33.33% share. The main contributory factors for this loss are fees in relation to the acquisition being expensed and a one-off acquisition completion bonus payable to executives and staff.

Prospects

Following the AGM on 21 June 2012, it was announced that the Board and management are reviewing strategic themes such as:

·; Sale of non core assets;

·; Expansion of the service business and further run-off acquisition opportunities; and

·; Entry of new equity partners either through Tawa new shares offering or through partnerships or similar arrangement to complement existing shareholder capital.

The above all work towards the goal of continuing and accelerating the migration of the Group from a pure run-off acquirer to a diversified insurance specialist. Since then progress has been made on this review, with the latest step being the announcement on 10 September 2012 that Tawa is seeking potential offerors by means of a formal sale process in accordance with Rule 2.6 of the Takeover Code.

The aim of this process is to benchmark the shareholder value creation of the other strategic options available against the potential immediate value to our shareholders of a bid for the entire company. There can be no certainty that an offer will be made or as to the terms of any such offer, be it from strategic investors or financial shareholders.

 The 2011 comparatives include the single reinsurance premium of $56.9 million paid to QX Reinsurance Company Limited from Penn National at inception.