FLAGSTONE RE REPORTS DILUTED BOOK VALUE PER SHARE OF $12.42 FOR END OF SECOND QUARTER 2009

HAMILTON, Bermuda - 04 August, 2009 - Flagstone Reinsurance Holdings Limited (NYSE: FSR) has announced second quarter 2009 basic book value per share of $12.87 and diluted book value per share of $12.42, up 7.1% and 7.2%, respectively, for the quarter (percentages inclusive of dividends).  Net income attributable to Flagstone's common shareholders for the quarter ended June 30, 2009, was $67.8 million, or $0.80 per diluted share, compared to $41.9 million, or $0.49 per diluted share, for the quarter ended June 30, 2008.  Net income available to common shareholders for the six months ended June 30, 2009 was $103.6 million, or $1.21 per diluted share, compared to $74.8 million, or $0.87 per diluted share, for the six months ended June 30, 2008.

"We are very pleased with our financial result for the second quarter of 2009" said David Brown, Flagstone Chief Executive Officer. "Flagstone's solid performance this quarter is the result of the continued strength of our underwriting, expansion in several lines of business and geographical diversification. In particular, this diversification accounted for a loss ratio in the quarter of 30.8% and a combined ratio of 68.7%, which produced an underwriting profit of $61.9 million for the quarter. Our ability to generate quality business on a global basis allows us to continue adding significant premium leverage to our business and achieve outstanding operating performance. Note that our Lloyds platform, Marlborough Underwriting Agency Limited, is only beginning to impact the top line, as our fresh corporate name ramps

up. Premiums written at Marlborough for the half year were a quite satisfactory $85.6 million, in line with plan." 

Mr. Brown continued, "Our mid-year renewals were attractive on a risk-adjusted basis and we were able to strategically allocate our capital to the best priced pieces of business. Flagstone's North American gross aggregate exposure was flat and our premiums were up approximately 5% despite renewing less proportional business in the quarter and writing more excess of loss. Florida pricing in particular was up approximately 15% on average, an attractive level given the appearance of capacity in the market at the last moment."

"I am pleased by the significant increases we saw this quarter in our book value," said Mark Byrne, Flagstone Chairman. "Flagstone's underwriting and overall results remain strong, especially considering the relatively minor contribution from our defensive investment portfolio in the quarter.  Given the attractive level of rates globally in the lines we target, and our ability to generate and select attractive business and leverage our underwriting capital, we are confident that Flagstone is well-positioned for future growth and profitability."

The Company is traded on the New York Stock Exchange under the symbol "FSR" and the Bermuda Stock Exchange under the symbol "FSR.BH". Additional financial information and other items of interest are available at the Company's website located at www.flagstonere.com.

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 Réassurance 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.

Contact:
Flagstone Reinsurance Holdings Limited, Hamilton
Brenton Slade, +1-441-278-4303