Montpelier Re Reports Net Income of $112.5 Million For Second Quarter 2003

Book value per share at June 30, 2003, on a fully converted basis (1), was $22.42, an increase of $1.61 or 7.7% in the second quarter of 2003 and an increase of $3.03 or 15.6% in the six months to June 30, 2003. In the twelve months to June 30, 2003, fully converted book value per share increased by 28.0% from $17.51 to $22.42.

Anthony Taylor, President and CEO, commented: "Montpelier has followed a strong first quarter in 2003 with an even stronger second quarter. Our overall book of business continued to grow, we were able to develop our portfolio of risks to an even greater degree, and we have diversified further by taking advantage of opportunities in areas in which we have competitive strengths."

Mr. Taylor further stated: "Montpelier is starting to come into its stride. The first 18 months of operations have produced exceptional returns, but throughout that period, we have been continually refining our business model. We have built on our wide range of relationships in the US, London and International markets with the objective of creating a platform which will enable us to maintain above average performance in future years. Our aim remains to produce favorable results over the long term and we look ahead with a great deal of optimism."

Tom Kemp, Chief Financial Officer, noted: "In terms of financial results, the second quarter was clearly very encouraging. More important, however, is the underlying trend in the development of our business. Montpelier Re is becoming increasingly recognized as one of the key lead markets, the innovative reputation of our underwriting team is growing, and our modeling and capital allocation capabilities are among the most sophisticated in the industry."

Gross premiums written and net premiums earned were broadly in line with expectations, with the notable exception of reinstatement premiums which have been negligible in 2003 so far, reflecting the low level of loss activity. We purchased a modest amount of retrocessional protection in the quarter.

The total investment return for the first six months of the year, including realized and unrealized investment gains, was 2.1%, or an annualized return of 4.2%. Reinvestment returns remain at challenging levels due to low prevailing interest rates. We added a small amount of quoted equities to our portfolio in the second quarter of the year. In total, equities comprise approximately 4% of our investment portfolio.

In the lines of business written by Montpelier, at the levels at which Montpelier participates, loss experience was very light both in the second quarter and in the year to date. The loss ratio was 17.3% for the quarter and 21.7% for the six months to June 30, 2003. We released $14.3 million of 2002 accident year reserves due to positive loss development in the second quarter of 2003, reducing the loss ratio in the quarter by approximately 8%.

General and administrative expenses for the quarter include an accrual of $1.0 million for costs relating to the secondary offering by shareholders of 8.05 million common shares of the Company commenced in late June. Montpelier did not receive any of the proceeds from the sale by shareholders of the common shares in the offering.

In the three months to June 30, 2003, total capital grew by $117.6 million to $1.62 billion.

Note:

(1) Fully Converted Book Value Per Share is a non-GAAP measure based on total shareholders' equity plus the assumed proceeds from the exercise of outstanding dilutive options and warrants of $168.1 million, divided by the sum of shares, options and warrants outstanding (assuming their exercise) of 73,261,760 shares at June 30, 2003. The Company believes this to be the best single measure of the return made by its shareholders as it takes into account the effect of all dilutive securities.

Earnings Conference Call:

Montpelier Re executives will conduct a conference call, including a question and answer period, on Friday, July 25th at 9:00 a.m. Eastern Time. The presentation will be available via a live audio webcast accessible through the Company's investor section of its website at www.montpelierre.bm, or via telephone by dialing (888) 482-0024 (toll-free) or (617) 801-9702 (international) and entering the pass code: 33390516. A telephone replay of the conference call will be available through July 31st, 2003 by dialing 888-286-8010 (toll-free) or 617-801-6888 (international) and entering the pass code: 68323109.

Montpelier Re Holdings Ltd. is the holding company of Montpelier Reinsurance Ltd - a leading provider of reinsurance for the global insurance market based in Hamilton, Bermuda. Montpelier Reinsurance Ltd. is rated "A" (Excellent) by A.M. Best Company and "A3" (Good) by Moody's Investors Service.