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FLAGSTONE RE COMPLETES RESTRUCTURING OF GLOBAL OPERATIONS

01 October 2008

Hamilton, Bermuda - 1 October, 2008 - Flagstone Reinsurance Holdings Limited (NYSE:FSR) announced today that it has restructured its global reinsurance operations by merging its two wholly owned subsidiaries, Flagstone Reinsurance Limited of Bermuda and Flagstone RÃ©assurance Suisse SA into one operating platform. The merged entity, Flagstone RÃ©assurance Suisse SA with its existing Bermuda branch, provides clients and the market as a whole a solid, single capital base to support Flagstone's reinsurance business. The new structure offers clients a choice of either Bermuda or Swiss underwriting access and the advantage of full participation in both the important Bermuda market and the global markets served in Switzerland.

The change in corporate structure approved today by Swiss regulators does not result in any change of management or corporate control, or any changes to the Board of Directors. The Flagstone reinsurance platform remains under the ownership and control of Flagstone Reinsurance Holdings Limited, a NYSE-listed and SEC regulated company. Flagstone Reinsurance Holdings Limited is a Bermuda company.

Mark Byrne, Flagstone's Chairman, noted: "We are grateful for the timely response to our plans by regulators in Switzerland and Bermuda, and to the three credit rating agencies who rate Flagstone. Congratulations to the team for swift execution of a complex project"

David Brown, Flagstone's CEO, added: "This platform allows us to provide all our clients access to a single and larger balance sheet than previously available thereby providing a superior and more transparent credit. We will continue to serve our clients in the Bermuda and Swiss marketplace in exactly the same manner as we do today. We believe that this move benefits the needs of our clients and we remain committed to our financial strength and client service."

About Flagstone Reinsurance Holdings Limited

Flagstone Reinsurance Holdings Limited, through its operating subsidiaries, is a global reinsurance and insurance company that employs a focused, technical approach to the Property, Property Catastrophe, and Specialty reinsurance and insurance businesses. Flagstone RÃ©assurance Suisse SA has an "A-" financial strength rating from both A.M. Best and Fitch Ratings, and an "A3" rating from Moody's Investors Service.