Statement regarding Beazley PLC

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

18th October, 2010

Hardy Underwriting Bermuda Limited ("Hardy" or "the Company")

The Board of Hardy (LSE: HDU), the specialist Lloyd's insurer, notes the announcement made today by Beazley plc ("Beazley"). The Company confirms that it received an unsolicited letter on 6th October 2010 from Beazley setting out details of an indicative proposal to acquire the entire issued and to be issued share capital of Hardy at 300p per share (the "Proposal"). The Proposal is subject to a number of pre-conditions, including due diligence and the unanimous recommendation of the Board of Hardy.

The indicative, non-binding Proposal substantially undervalues the Company and does not reflect its:

·; strong historic underwriting track record;

·; clearly stated and successful growth strategy of prudent diversification and the pursuit of selective opportunities that lever its niche skills in complementary sectors and geographies;

·; focus on attractive short tail niche lines of business;

·; high quality underwriting teams and management, recently complemented by the opening of the new Singapore office; and

·; prudent reserving policy.

The Hardy principles of underwriting expertise and prudent reserving, together with successful cycle management have led to a track record of sustained profitability both at Group as well as syndicate level. Hardy's significant growth over the last few years has been achieved without compromising underwriting standards. Hardy is enhancing its current strategy by actively developing opportunities where the Company already has complementary expertise and through the development of a broader geographical reach including the Asia Pacific region.

The Board views the Proposal as an attempt to acquire the Company opportunistically, when valuations of listed Lloyd's companies are at a cyclical low and to exploit the impact on Hardy of a series of exceptional international property treaty losses

The Board, having carefully considered the Proposal together with its advisers Rothschild and KBC Peel Hunt, was of the unanimous opinion that it significantly undervalues the Company and consequently had no hesitation in rejecting the Proposal

This announcement has been made without the consent of Beazley. There can be no certainty that an offer will ultimately be made by Beazley for Hardy or the terms on which any such offer may be made, even if the preconditions are satisfied or waived.

Enquiries:

Hardy

Barbara Merry c/o Redleaf Communications

Redleaf Communications ltd

Emma Kane / Alicia Jennings

+44(0)207 566 6700

[email protected]

Rothschild

Crispin Wright

Anton Black

Alejandro Vleming

+44(0)207 280 5000

KBC Peel Hunt

James Britton

+44(0)207 418 8817

Guy Wiehahn

+44(0)207 418 8893

¡ Further information on Hardy is available at the Group's website: www.hardygroup.bm

The City Code on Takeovers and Mergers ("the Code")

Hardy is incorporated and its registered office is in Bermuda. Accordingly, Hardy is not subject to the provisions of the Code. However, the Company's Bye-laws adopt certain of the provision of the Code including provisions dealing with compulsory takeover offers and shareholder treatment along the lines of the general principles as set out in the Code, which are to be administered at the discretion of the Board.

Hardy confirms that as at the close of business on 15th October its issued share capital consisted of 52,764,476 common shares of 20 pence each.

The International Securities Identification Number for Hardy common shares is BMG429851048

N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to Hardy and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Hardy for providing the protections afforded to clients of Rothschild or for providing advice in relation to this matter, the content of this announcement or any matter referred to herein. Neither Rothschild nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Rothschild in connection with this announcement, any statement contained herein or otherwise.

KBC Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Hardy (as financial adviser and broker) and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Hardy for providing the protections afforded to its customers or for providing advice in relation to the matters referred to in this announcement.