Statement re Kinesis Underwriting Commences

LANCASHIRE HOLDINGS LIMITED 22 January 2014London UK KINESIS UNDERWRITING COMMENCES - OVER USD 250 MILLION OF LIMIT BOUND FOR 1 JANUARY 2014 Lancashire Holdings Limited ("Lancashire" or the "Company") has today announcedthat Kinesis Capital Management Limited ("KCM") has commenced underwritingfully collateralised reinsurance business on behalf of Kinesis Reinsurance ILimited ("Kinesis Re"). Following the successful fund-raising conducted by Kinesis Re's parent company,Kinesis Holdings I Limited ("Kinesis Holdings"), from a number of externalinvestors, Kinesis Re has underwritten its first tranche of multi-classreinsurance agreements with combined aggregate limits in excess of USD 250million, which incepted on or around 1 January 2014. All the reinsurancecontracts are fully collateralised. Lancashire contributed 10 per cent of thecapital raised by Kinesis Holdings. Goldman Sachs worked with Lancashire tostructure the Kinesis vehicles, which will allow investors access to the marketon a regular and opportunistic basis. Richard Brindle, Lancashire's Chief Executive Officer, said: "The successfullaunch of Kinesis, as a multi-class, fully collateralised reinsurance provider,is an exciting development in Lancashire's third party capital managementstrategy. We have built an excellent team at KCM, led by Darren Redhead, whichhas strong underwriting skills and capabilities and this bodes well for futuregrowth. Together, Lancashire, Kinesis and Cathedral constitute our threeplatforms to access different kinds of capital, all with high calibre,established underwriters. This approach allows us to provide brokers andclients with insurance and reinsurance solutions for all types of risk transferrequirements." Darren Redhead, KCM's Chief Executive Officer, said: "We are delighted thatthe Kinesis vehicles are now fully established and funded and we look forwardto continuing to develop KCM's business and reputation in the Insurance-LinkedSecurities arena. We are very pleased with the start we have made, with thequality of the investors and clients, and are looking to develop furthercapacity and specialty class transactions during the year ahead". For further information, please contact: Lancashire Holdings Limited Christopher Head +44 20 7264 4145 [email protected] Jonny Creagh-Coen +44 20 7264 4066 [email protected] Haggie Partners +44 20 7562 4444 Peter Rigby (Peter Rigby mobile +44 7803851426) About Lancashire Lancashire, through its UK and Bermuda-based operating subsidiaries, is aglobal provider of specialty insurance and reinsurance products. The Groupcompanies carry the following ratings: Financial Financial Long Term Strength Strength Issuer Rating (1) Outlook(1) Rating (2) A.M. Best A (Excellent) Stable bbb Standard & Poor's A- Stable BBB Moody's A3 Stable Baa2 (1)Financial Strength Rating and Financial Strength Outlook apply to LancashireInsurance Company Limited and Lancashire Insurance Company (UK) Limited. (2) Long Term Issuer Rating applies to Lancashire Holdings Limited. NB: Cathedral benefits from Lloyd's ratings: Standard & Poor's: A+ (Strong);A.M. Best: A (Excellent); and Fitch: A+ (Strong). Lancashire has capital in excess of $1.5 billion and its common shares trade onthe Main Market of the London Stock Exchange under the ticker symbol LRE.Lancashire has its corporate headquarters and mailing address at Level 11,Vitro, 60 Fenchurch Street, London EC3M 4AD, United Kingdom and its registeredoffice at Power House, 7 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information on Lancashire, visit the Company's website atwww.lancashiregroup.com Lancashire Insurance Company Limited is regulated by the Bermuda MonetaryAuthority in Bermuda. Lancashire Insurance Company (UK) Limited is authorised by the PrudentialRegulation Authority and regulated by the Financial Conduct Authority and thePrudential Regulation Authority in the UK. KCM and Kinesis Re are regulated by the Bermuda Monetary Authority in Bermuda. For more information on Lancashire's subsidiary, Cathedral Capital Limited("Cathedral"), visit Cathedral's website at www.cathedralcapital.com Cathedral Underwriting Limited is authorised by the Prudential RegulationAuthority and regulated by the Financial Conduct Authority and the PrudentialRegulation Authority in the UK. IMPORTANT NOTICES THIS RELEASE IS FOR INFORMATION ONLY AND DOES NOT CONSTITUTE AN OFFER ORINVITATION TO UNDERWRITE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE OR DISPOSE OF ANYSECURITIES OR INVESTMENT ADVICE IN ANY JURISDICTION. PERSONS NEEDING ADVICESHOULD CONSULT AN INDEPENDENT FINANCIAL ADVISER. THIS RELEASE DOES NOTCONSTITUTE AN OFFER OF SECURITIES TO THE PUBLIC IN THE UNITED STATES, UNITEDKINGDOM OR IN ANY OTHER JURISDICTION. THERE HAS NOT BEEN, AND WILL NOT BE, ANYPUBLIC OFFERING OF SECURITIES IN CONNECTION WITH THE FUND-RAISING CONDUCTED BYKINESIS HOLDINGS REFERRED TO IN THIS RELEASE IN THE UNITED STATES, THE UNITEDKINGDOM OR ANY OTHER JURISDICTION. CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSSSCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT ORHISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION,STATEMENTS CONTAINING THE WORDS "BELIEVES", "ANTICIPATES", "PLANS", "PROJECTS","FORECASTS", "GUIDANCE", "INTENDS", "EXPECTS", "ESTIMATES", "PREDICTS", "MAY","CAN", "WILL", "SEEKS", "SHOULD", OR, IN EACH CASE, THEIR NEGATIVE ORCOMPARABLE TERMINOLOGY. ALL SUCH STATEMENTS OTHER THAN STATEMENTS OF HISTORICALFACTS INCLUDING, WITHOUT LIMITATION, THE GROUP'S OR THE ENLARGED GROUP'S (I.E.THE GROUP, INCLUDING THE CATHEDRAL GROUP) FINANCIAL POSITION, RESULTS OFOPERATIONS, PROSPECTS, GROWTH, CAPITAL MANAGEMENT PLANS AND EFFICIENCIES,ABILITY TO CREATE VALUE, DIVIDEND POLICY, OPERATIONAL FLEXIBILITY, COMPOSITIONOF MANAGEMENT, BUSINESS STRATEGY, PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTUREOPERATIONS (INCLUDING DEVELOPMENT PLANS AND OBJECTIVES RELATING TO THE GROUP'SOR THE ENLARGED GROUP'S INSURANCE BUSINESS) ARE FORWARD-LOOKING STATEMENTS.SUCH FORWARD-LOOKING STATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS,UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT COULD CAUSE THE ACTUAL RESULTS,PERFORMANCE OR ACHIEVEMENTS OF THE GROUP OR THE ENLARGED GROUP TO BE MATERIALLYDIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIEDBY SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE ENLARGED GROUP'S ABILITY TOINTEGRATE ITS BUSINESSES AND PERSONNEL, THE SUCCESSFUL RETENTION AND MOTIVATIONOF THE ENLARGED GROUP'S KEY MANAGEMENT, THE INCREASED REGULATORY BURDEN FACINGTHE ENLARGED GROUP, THE NUMBER AND TYPE OF INSURANCE AND REINSURANCE CONTRACTSTHAT THE GROUP WRITES OR THE ENLARGED GROUP MAY WRITE; THE PREMIUM RATES WHICHMAY BE AVAILABLE AT THE TIME OF SUCH RENEWALS WITHIN ITS TARGETED BUSINESSLINES; THE POSSIBLE LOW FREQUENCY OF LARGE EVENTS; POTENTIALLY UNUSUAL LOSSFREQUENCY; THE IMPACT THAT THE ENLARGED GROUP'S FUTURE OPERATING RESULTS,CAPITAL POSITION AND RATING AGENCY AND OTHER CONSIDERATIONS MAY HAVE ON THEEXECUTION OF ANY CAPITAL MANAGEMENT INITIATIVES OR DIVIDENDS; THE POSSIBILITYOF GREATER FREQUENCY OR SEVERITY OF CLAIMS AND LOSS ACTIVITY THAN THE ENLARGEDGROUP'S UNDERWRITING, RESERVING OR INVESTMENT PRACTICES HAVE ANTICIPATED; THERELIABILITY OF, AND CHANGES IN ASSUMPTIONS TO, CATASTROPHE PRICING,ACCUMULATION AND ESTIMATED LOSS MODELS; THE EFFECTIVENESS OF ITS LOSSLIMITATION METHODS; THE POTENTIAL LOSS OF KEY PERSONNEL; A DECLINE IN THEGROUP'S OPERATING SUBSIDIARIES' RATING WITH A.M. BEST, STANDARD & POOR'S,MOODY'S OR OTHER RATING AGENCIES; INCREASED COMPETITION ON THE BASIS OFPRICING, CAPACITY, COVERAGE TERMS OR OTHER FACTORS; CYCLICAL DOWNTURNS OF THEINDUSTRY; THE IMPACT OF A DETERIORATING CREDIT ENVIRONMENT FOR ISSUERS OF FIXEDINCOME INVESTMENTS; THE IMPACT OF SWINGS IN MARKET INTEREST RATES ANDSECURITIES PRICES; A RATING DOWNGRADE OF, OR A MARKET DECLINE IN, SECURITIES INITS INVESTMENT PORTFOLIO; CHANGES IN GOVERNMENTAL REGULATIONS OR TAX LAWS INJURISDICTIONS WHERE THE GROUP OR THE ENLARGED GROUP CONDUCTS BUSINESS. ALL FORWARD-LOOKING STATEMENTS IN THIS RELEASE SPEAK ONLY AS AT THE DATE OFPUBLICATION. LANCASHIRE EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING (SAVEAS REQUIRED TO COMPLY WITH ANY LEGAL OR REGULATORY OBLIGATIONS INCLUDING THERULES OF THE LONDON STOCK EXCHANGE) TO DISSEMINATE ANY UPDATES OR REVISIONS TOANY FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN THE GROUP'S OR THEENLARGED GROUP'S EXPECTATIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT ISBASED.