Trenwick Group Ltd. Revises September 11th Terrorist Attack Loss Estimate

Business Wire, Oct 4, 2001

Business Editors

HAMILTON, Bermuda--(BUSINESS WIRE)--Oct. 4, 2001

Trenwick announced today at the Bermuda Angle Conference that it was revising its estimate of losses stemming from the acts of terrorism committed in New York City, Washington, D.C. and Pennsylvania on September 11, 2001.

Trenwick's revised estimate of its losses from the September 11th terrorist attacks is $100 million, net of reinsurance recoveries. On an after-tax basis, the estimated loss represents a $2.61 per share reduction of Trenwick's book value, which was $614 million, or $16.65 per share, at June 30, 2001 and a 10% reduction of Trenwick's consolidated statutory surplus, which was $986 million at June 30, 2001. Trenwick's revised estimate is based on an industry loss estimate of $35 to $40 billion.

Because of the scope and uniqueness of these events, standard loss modeling and assessment methodologies have limited relevance. As a result, the expected Trenwick losses continue to represent a preliminary estimate. As more accurate information regarding the events becomes available, we will update this estimate.

James F. Billett, Jr., Chairman, President and Chief Executive Officer of Trenwick stated, "While Trenwick's exposure to losses emanating from the September 11th terrorist attacks is significant, we believe it is eminently manageable. Trenwick's balance sheet, while slightly reduced in size, continues to have unimpaired quality. Our exposure to equity securities is under 1% and approximately 90% of our fixed income investments are rated A or better. Trenwick has been in the underwriting business for over 20 years. We have the knowledge to manage our most recent losses and the experience to profit from the opportunities created in their wake."

Background Information

Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization with five distribution platforms operating through its subsidiaries located in the United States, the United Kingdom and Bermuda. Trenwick America Re provides treaty reinsurance to insurers of property and casualty risks in the United States. Trenwick International underwrites specialty insurance as well as treaty and facultative reinsurance on a worldwide basis. Chartwell Managing Agents Limited is Trenwick's managing agency at Lloyd's. Canterbury Financial Group underwrites U.S. property and casualty insurance through specialty program administrators. LaSalle Re is a property and casualty reinsurer writing worldwide specialist products with an emphasis on catastrophe coverage.

Each of Trenwick's principal insurance and reinsurance subsidiaries is currently rated A- (Excellent) by A. M. Best Company and is currently assigned a financial strength rating of A by Standard & Poor's. A.M. Best Company and Standard & Poor's have each recently placed Trenwick's ratings under review with negative implications.

Safe Harbor for Forward-Looking Statements

Certain statements made in this press release that are not based on current or historical fact are forward-looking in nature. Such forward-looking statements, including in particular Trenwick's estimate of the effects of the terrorist acts on September 11, 2001, involve known and unknown risks, assumptions, uncertainties, and other factors that may cause the effects on Trenwick or the insurance and reinsurance industries to differ materially from the anticipated effects expressed or implied by such forward-looking statements.

Trenwick has identified certain risk factors which could cause the effects of the terrorist acts on September 11, 2001 to differ substantially from those included in any forward-looking statements. These risk factors are the number of insureds and reinsureds affected, the amount and timing of losses actually incurred and reported by insureds and reinsureds, the recoverability of reinsurance from third parties and those risk factors discussed in Trenwick's Securities and Exchange Commission filings, including but not limited to its most recent Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission, and such discussions regarding risk factors are hereby incorporated by reference into this press release. Copies of such Securities and Exchange Commission filings are available from Trenwick or directly from the Securities and Exchange Commission.