Montpelier Re Reports Net Income of $91.0 Million For Third Quarter 2003

Anthony Taylor, President and CEO, commented: "Montpelier has again produced tremendous returns for our owners. Our core lines of business continue to perform strongly in 2003, with excellent growth and consistently low loss ratios. The planned expansion of our Specialty and Casualty writings is proceeding for 2004 and is attracting strong support from our key producers."

Mr. Taylor added, "For the nine months ended September 30, 2003, gross premiums written and net premiums earned for the core Property and Specialty lines have grown 75% and 186%, respectively, compared to the same period in 2002. I expect that we will achieve further growth in these lines in 2004, albeit not to the same degree. Pricing and terms remain attractive and expected returns on capital employed remain very acceptable. The market is witnessing rating downgrades and continuing deterioration on back-year reserves which, when coupled with changes to industry standard modeling software, put pressure on the availability of quality capacity in the reinsurance market as we move into the renewal season."

Tom Kemp, Chief Financial Officer, noted: "Given the high level of loss events to hit the industry in the quarter, we are very happy to be reporting such positive results. I believe that the loss ratios we have experienced are driven in large part by Montpelier's strong underwriting focus together with our sophisticated risk management capabilities."

Tom Kemp added: "Although we have grown fully converted book value by over 30% in the past twelve months, we do not believe we have had significant excess capital up this point. We see a number of opportunities where we could deploy our capital in 2004, but our required rates of return will remain high and Montpelier will not be pursuing growth for growth's sake. Given our focus on achieving above average results for our owners, we continually explore the opportunities for maximizing shareholders' total return. We will continue to concentrate on both the numerator and the denominator of the Return on Equity equation."

As previously announced, it is anticipated that Lloyd's Qualifying Quota Share contracts will not be written in 2004 however, we expect increased writings of core property business and growth in Other Specialty classes, as well as opportunistic participation in specific areas of the casualty reinsurance market in view of its improving terms and conditions.

Ultimate premium estimates reported to Montpelier by syndicates reinsured under QQS arrangements were reduced significantly in the third quarter. Offsetting this are the improved ultimate loss ratios for the QQS programs. Overall, the unfavorable variance in net income for this line of business from our original estimate is expected to be approximately $2 million over the life of the QQS contracts.

QQS business is now expected to represent only 6% of gross premiums written in 2003. Because of the aggregate reductions in QQS premium estimates notified in the second and third quarters, together with very low levels of reinstatement premiums, gross written and net earned premium for the year could be approximately 10% lower than previously anticipated.

Total investment return for the first nine months of the year, including realized and unrealized investment gains, was 2.5%, or an annualized return of 3.3%. Notwithstanding lower investment yields than comparative periods in 2002, investment income has remained steady due to the increased levels of invested assets from positive cash flows.

Despite a relatively high level of losses for the industry in the third quarter of 2003, Montpelier was not impacted to any significant extent. The loss ratio was 21.5% for the quarter and 21.6% for the nine months to September 30, 2003. Montpelier released $12.5 million of net 2002 accident year reserves in the quarter, reducing the loss ratio in the three months to September 30, 2003 by 7.7%. The ultimate loss ratio for the 2002 underwriting year is now projected at approximately 27%.

General and administrative expenses for the quarter include banking fees and other charges relating to the underwritten public issue of $250.0 million of ten-year Senior Notes completed in early August, together with increased accruals relating to performance based compensation, in line with improved underwriting results. Including these non-recurring items, the general and administrative expense ratio for the quarter was 7.9%.

In the three months to September 30, 2003, total capital grew by $194.0 million, to $1.82 billion. This includes $250 million of Senior Notes issued in the quarter, less repayment of the $150 million term loan facility.

· (1) Book Value Per Share is a non-GAAP measure based on total shareholders' equity plus the assumed proceeds from the exercise of outstanding 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 September 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. Fully Converted book value per share is set forth in the tables below.

Earnings Conference Call:

Montpelier Re executives will conduct a conference call, including a question and answer period, on Wednesday October 29th at 10:00 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 800-299-7098 (toll-free) or 617-801-9714 (international) and entering the pass code: 64837874. A telephone replay of the conference call will be available through November 7th, 2003 by dialing 888-286-8010 (toll-free) or 617-801-6888 (international) and entering the pass code: 55522116.

Montpelier Re Holdings Ltd., through its operating subsidiary, Montpelier Reinsurance Ltd., is a premier provider of global property and casualty reinsurance and insurance products. Montpelier Reinsurance Ltd. is rated "A" (Excellent) by A.M. Best Company, "A-" (Strong) by Standard & Poor's and "A3" (Good) by Moody's Investors Service.

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

This press release contains, and Montpelier may from time-to-time make, written or oral "forward-looking statements" within the meaning of the U.S. federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.