LANCASHIRE HOLDINGS LIMITED ANNOUNCES EXTENSION OF OCTOPUS

London, UK - 27 April 2009 - Lancashire Insurance Group ("Lancashire") (LHL.BH) today announces the extension of OCTOPUS to new clients. OCTOPUS provides transparent insurance protection against windstorm losses to oil and gas companies operating in the Gulf of Mexico. OCTOPUS has previously only been available to existing Lancashire clients.

OCTOPUS is designed to ease the current dislocation in the offshore energy insurance market caused by Hurricane Ike in September 2008, which was one of the top three most damaging hurricanes to the Gulf of Mexico energy industry. Insurance capacity is estimated to have halved since Hurricane Ike, creating an unstable and uncertain pricing environment.

As a leading Gulf of Mexico energy insurer, Lancashire has acted to reduce the uncertainty facing clients and brokers, and OCTOPUS provides a viable option for Gulf of Mexico clients seeking windstorm protection. Specific features include:

-          Clear coverage for fixed deepwater assets and self-propelled drilling units on a total loss basis

-          Minimum commitment per unit of $25m

-          No sharing of limit or aggregate

-          Units individually rated up to a maximum of 7.5% Rate on Line net

-          Standard payment terms and no multi-year purchase requirement

Richard Brindle, Group Chief Executive Officer, commented:

"In challenging times you look for certainty and Lancashire is delighted to extend OCTOPUS to new clients. The Gulf of Mexico energy market is currently in a state of disarray with capacity severely constrained and no discernible consensus on pricing. Alternative options have been unable to offer certainty, providing cover on a pooled basis with a shared aggregate, thus uncertainty for clients remains.   

OCTOPUS provides clients with the certainty they seek and further strengthens Lancashire's position as a leading provider of innovative and user friendly insurance products."

OCTOPUS will be available for a limited time only and is subject to available capacity. 

For further information, please contact:

About Lancashire

Lancashire Holdings Limited, through its UK and Bermuda-based insurance subsidiaries, is a global provider of specialty insurance products. Its insurance subsidiaries carry the Lancashire group rating of A minus (Excellent) from A.M. Best with a stable outlook. Lancashire Holdings Limited has capital in excess of $1 billion dollars and its Common Shares trade on the FTSE All Share under the ticker symbol LRE. Lancashire is headquartered at Mintflower Place, 8 Par-La-Ville Road, Hamilton HM 08, Bermuda. The mailing address is Lancashire Holdings Limited, P.O. Box HM 2358, Hamilton HM HX, Bermuda. For more information on Lancashire, visit the Group's website at www.lancashiregroup.com.

Lancashire Insurance Marketing Services Limited is authorized and regulated by the UK Financial Services Authority