Interim Management Statement

FOR IMMEDIATE RELEASE

26 October 2010

BRIT INSURANCE HOLDINGS N.V.

INTERIM MANAGEMENT STATEMENT

Brit Insurance Holdings N.V. ("Brit Insurance" or "the Group"), the international general insurance and reinsurance group, releases the following Interim Management Statement and trading update as required by the UK Listing Authority's Disclosure and Transparency rules, relating to the 42 week period from 1 January 2010 to 25 October 2010.

Summary

·; Gross written premium down 8.5% to £1,220.6m for the nine month period (the period) ended 30 September 2010 (30 September 2009: £1,334.4m), a decrease of 9.0% at constant exchange rates.

·; Lower premium volumes reflect continued active portfolio management and a disciplined approach to the renewals where premium rates are under excessive pressure

·; Average premium rate increase on renewed business for the period of 1.1% (30 September 2009: increase of 4.8%)

·; Overall development of prior year claims reserves continues to be positive reflecting the Group's consistent reserving approach

·; Investment return for the period of £101.8m, a non-annualised return of 2.9% (30 September 2009: £119.8m and 3.6%)

Dane Douetil, Chief Executive Officer of Brit Insurance Holdings N.V., said:

"The third quarter saw broadly a continuation of the trends experienced in the first half of the year. Underwriting remained competitive in most classes whilst the Group again experienced better than expected investment returns. Our approach has also been consistent with previous quarters, with our underwriters strongly defending business that can be renewed at adequate prices whilst being prepared to walk away from inadequately rated business.

"Cost control has been an important priority as we shrink the top line in response to a weakening market. We will go into 2011 well equipped to deal with what we expect to remain a competitive marketplace."

Financial performance

Gross written premium and premium rate movements by Strategic Business Unit (SBU)

Estimates are based on the Group's underwriters' estimates of rate changes, including adjustments to terms and conditions, and relate to renewal business only, since this represents the business with the best year-on-year data.

Underwriting

Overall gross written premium for the period was £1,220.6 a fall of 9.0% at constant currency. On an underlying basis, after adjusting for movements on prior year premium estimates which were significantly lower than in the previous years, gross written premium was 3.8% lower.

Premium volumes within Global Markets continue to reflect portfolio actions taken over the last two years, whereas on an underlying basis, premium volumes within the UK and Reinsurance SBUs were broadly flat. Overall the Group was able to keep rate movements in positive territory, with an average rate increase on renewed business of 1.1%, by continuing to decline business where rates were under excessive pressure.

Global Markets (49% of Group premium)

The underwriting market for Global Markets remains competitive across most business lines with more than enough capacity preventing significant rate rises. In this environment an overall 0.2% average rate increase on renewed business in the period is pleasing. In the majority of classes of business rate movements ranged from -1% to +1%.

As a result of the unit's underwriting discipline and the effect of the portfolio management actions taken over the last two years, gross written premium in the period was 9.8% lower at constant currency. In particular premium volumes were materially lower in Accident and Health and the longer-tail classes of business - Professional Lines and Specialty Lines - where business currently no longer meets the Group's required long-term return on capital. Partly offsetting this was a 10% growth in underlying premium in the Property division following development of the open market team and the controlled expansion of the Group's wholly-owned MGA in the US - Brit Insurance Services Inc (BISI).

Reinsurance (24% of Group premium)

The Reinsurance portfolio has been relatively stable during the year with average rate increases on renewed business of 0.4% whilst underlying premium volumes were down 0.5%. After taking into account movements on prior year estimates, primarily arising from the non-recurrence of reinstatement premiums, gross written premium was down by 13.3% at constant currency.

Portfolio composition over the period was materially unchanged reflecting the stability of the reinsurance market and the SBU's position within it.

UK (27% of Group premium)

In what continues to be a competitive commercial insurance market in the UK, the SBU continues to focus on building its product offering and distribution capability. Furthermore the SBU has taken a number of significant portfolio actions during the year, namely the withdrawal from Municipal (Local Authority) business and a material reduction in Private Motor. These reductions have been offset by good growth in the core Property book.

Average premium rate increases in the period were 3.1% with the highest rate increases experienced in Motor (11.3%) whilst premium rates for Liability lines (Employers' Liability and Professional Indemnity) have tracked higher as the year has progressed.

Claim activity

During the period the International Property Catastrophe market continued to experience heavy claim activity with the New Zealand earthquake adding to market losses in the first half of 2010 from European windstorm Xynthia, Australian hail and flood and the earthquake in Chile. At this stage the Group does not expect the New Zealand earthquake to be a major claim (i.e. more than £10m net of reinsurance). The outlook for claims from the Chilean earthquake continues to improve against the Group's initial estimate and is likely to offset claims arising from the New Zealand event.

To date the US hurricane season has been favourable to the insurance industry. There have been 17 named storms of which five reached at least category 3 strength; however none of the hurricanes have made US landfall.

Outside of natural catastrophes, claims activity remains in line with expectations and claims reserves for prior years continue to develop favourably.

Investments

Total investment return for the period was £101.8m representing a 2.9% return on average cash and investments. Over the period to 30 September 2010, total cash and investments was materially unchanged at £3.5bn and during the last three months the Group's asset allocation has remained relatively unchanged.

Strong performance in equities, fixed income (particularly in US dollar government bonds) and specialised investment funds lead to an investment return of £101.8m or 2.9% (non-annualised) for the first nine months of 2010. The investment return to 30 September 2010 is set out below.

The Group delivered an investment return of £44.3m or 1.3% (non-annualised) in the third quarter. Returns for equities and specialised investment funds were 9.1% and 4.4% respectively and benefited from the strong performance of global stock markets and the rise in gold prices. The rally in interest rates, particularly in US Treasuries led to good performance in US dollar and Sterling government and corporate bonds. Corporate bonds continue to deliver a significant proportion of absolute return as spreads tightened further over the quarter. Cash returns continue to fall, with 3-month LIBOR lower than at the end of the second quarter in both US dollars and Sterling.

Headcount and expenses

Group headcount at 30 September 2010 was 756 and has increased marginally since 31 December 2009 (741) reflecting the build-out of offices in Amsterdam, Chicago and Sydney.

Expense levels in the quarter are in line with expectations and the Group continues to expect a full year expense ratio (excluding central costs) of around 35%.

Foreign Exchange

The Group experienced a foreign exchange charge in the third quarter of £6.4m relating to marking to market the element of the Group's capital that it holds in non-Sterling currencies. At 30 September 2010, £280.2m of the Group's net tangible assets was denominated in non-Sterling currencies.

In addition in the third quarter the negative effect from foreign exchange on non-monetary items was £11.1m. As previously commented the Group considers the effect of foreign exchange on non-monetary items to be a timing difference that will reverse in future periods.

For the nine months to 30 September 2010, the total foreign exchange benefit was £7.5m with a mark to market gain of £13.9m being partially offset by the negative effect of foreign exchange on non-monetary items of £6.4m.

Capital and liquidity

The Group's main insurance carriers, Brit Insurance Limited (BIL) and Lloyd's Syndicate 2987, benefit from strong ratings from the major rating agencies. BIL's ratings of A (Excellent) from AM Best and A (Strong) from Fitch Ratings remain in the target range of mid to high 'A'.

On 21 September 2010 and in response to the indicative offer by Apollo and CVC, Fitch Ratings placed the Group's ratings on rating watch negative. The Group is working closely with Fitch Ratings, as well as AM Best, to resolve any questions arising from the offer.

Syndicate 2987's effective rating from trading through Lloyd's is A+ (Strong) from Standard and Poor's and Fitch Ratings and A (Excellent) from AM Best. These ratings are unaffected by the approach from Apollo and CVC.

At 30 September 2010, the Group's gearing ratio1 was 15.6% (31 December 2009: 25.1%) and remains within the Group appetite to retain a gearing ratio below 30%.

The Group continues to commit significant resource to its Solvency II programme and is on track to meet the deadlines set by the FSA and Lloyd's to achieve internal model approval.

Distributions

As announced on 28 July 2010, the Board is recommending a half-year distribution of 30.0p per share. Subject to the two month creditor objection period required under the Dutch Civil Code, this will be paid on 7 December 2010 to shareholders who were on the register on 22 October 2010.

Additional Non-Executive Director

A resolution will be put to a General Meeting on 17 December 2010 to appoint Mr Maarten Joannes Hulshoff as an additional non-executive Director to the Board. Mr Hulshoff, a Dutch national born in 1947, holds a master's degree in economics from the Erasmus University, the Netherlands. He has held various management positions with Citigroup in Europe and Asia and has been Chairman of the Managing Board of NCM (renamed Atradius), Rabobank International and Rodamco Europe (merged into Unibail-Rodamco).

Mr. Hulshoff currently holds a number of senior board positions within a number of major companies, including Chairman of the Supervisory Boards of Credit Europe Bank and Goedland, Member of the Board of Damen Shipyards Group and Member of the Board of HB Reavis.

Offer by Achilles Netherlands B.V. (Achilles)

Shareholders should note the separate announcement made today relating to the offer made by Achilles, a company formed on behalf of, and which will be majority-owned by, funds managed by Apollo Management VII, L.P. and funds advised by CVC Capital Partners Limited.

Outlook

The insurance market is forecast to remain competitive for the remainder of 2010 and into 2011 with sufficient capital in most lines of business. In time, however, the impact of low interest rates and, for the UK market, high industry accident year combined ratios should lead to a period of improving pricing. Meanwhile the Group is focused on continued portfolio management and optimisation through rigorous adherence to technical pricing and the use of enhanced actuarial and benchmarking tools. Evidence of this approach can be seen in the 9.0% reduction in gross premium written in a period of flat rate movements.

The three SBUs continue to trade at different points in the insurance cycle. The UK market remains in the toughest position with little evidence to suggest that current modest price increases will materially accelerate in the short term. The UK SBU is closely monitoring market developments and is well positioned to wait for and react to a cyclical upturn. As previously commented the outlook for Global Markets's key business lines is finely poised and in this context a focus on portfolio management and risk selection are the key to outperformance. The highest risk adjusted returns exist within Reinsurance where the Group continues to operate close to its maximum catastrophe risk appetite.

1 Gearing ratio: Ratio, in percent, of total borrowings divided by total capital resources

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Notes to Editors

Brit Insurance is an international general insurance and reinsurance group specialising in commercial insurance. The Group writes a diverse portfolio of over 70 classes of insurance and reinsurance offering worldwide protection. The scope is wide-ranging: from sole traders to the largest multinational corporations; from manufacturers to professional services; from shops to satellites. Our distribution model is centred on brokers and intermediaries. Reflecting where our customers trade, we are organised into three strategic business units - Global Markets, UK and Reinsurance - which have access to our underwriting platforms including Brit Insurance Limited and our Lloyd's syndicate, Brit Syndicate 2987.

For more information please go to: www.britinsurance.com