Lancashire Holdings Ltd – Share Repurchase; Related Party Transaction

Hamilton, Bermuda – 11 June, 2010 - Lancashire Holdings Limited (“Lancashire” or “the Company”; Ticker: LHL BH) announces that on 11 June, 2010, the Company agreed to purchase from Crestview Partners, L.P., Crestview Offshore Holdings (Cayman), L.P., Crestview Holdings (TE), L.P., Crestview Partners ERISA, L.P. and Crestview Partners (PF), L.P (collectively, the “Crestview Sellers”), for cancellation an aggregate of 1,000,000 issued Common Shares of US$0.50 par value per share (the "Shares") at a price of US$7.03 per share, or £4.80 pence per share. The Shares have been repurchased in an off market transaction at a discount to the market price as at the close of business on 10 June, 2010, (based on an exchange rate of £1.0/$1.46376). This purchase was made pursuant to the Company's share repurchase programme that was approved by shareholders on 4 May, 2010 (the “Repurchase Programme”).

The participation of the Crestview Sellers in the Company's Repurchase Programme is deemed to be a related party transaction for the purposes of Listing Rule 11 by virtue of the Company's non-executive director, Barry Volpert, and the Crestview Sellers being "associates" as defined under the Listing Rules of the Financial Services Authority (the “FSA”). The directors of the Company consider, having consulted an independent adviser, that the terms of the share repurchase from the Crestview Sellers are fair and reasonable as far as the shareholders of the Company are concerned and the Company's independent adviser has so notified the FSA.

Share Repurchase Programme

Any shares purchased under the Repurchase Programme will count towards the Company's general buy-back authority to purchase up to a maximum number of 18,250,306 Common Shares, as approved at the Company's AGM.

As at the date of this notice, the Company's share capital in issue with voting rights consists of 158,129,983 Common Shares. Following the repurchase of the Crestview Sellers’ shares, the Company's share capital in issue with voting rights will be 157,129,983 Common Shares (excluding Treasury shares/shares purchased for cancellation). The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure and Transparency Rules.

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About Lancashire

Lancashire, 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 has capital in excess of $1 billion and its Common Shares trade on the main market of the London Stock Exchange under the ticker symbol LRE. Lancashire is headquartered at Power House, 7 Par-la-Ville Road, Hamilton HM 11, Bermuda. The mailing address is Lancashire Holdings Limited, P.O. Box HM 2358, Hamilton HM HX, Bermuda. For more information on Lancashire, visit the Company's website at www.lancashiregroup.com.