CATCo Reinsurance Opportunities Fund Ltd (the Company) Issues Interim Report For Six Months 30 June Ended 30 June 2012

Hamilton, Bermuda: 16 August 2012 - CatCo Reinsurance Opportunities Fund Ltd. (“the Company”) has advised the BSX of the Company’s Interim Report as follows:

CHAIRMAN’S STATEMENT

During the first half of 2012 the Company’s Net Asset Value increased by approximately 5.3% from $339.8 million to $357.9 million. The performance reflects the gain on the 2012 investment portfolio offset by the loss development of the catastrophic events of the first half of 2011.

Deployment

At the beginning of the period, CATCo Investment Management Ltd., the appointed investment manager, in conjunction with CATCo-Re Ltd. (“CATCo”), a licensed Class 3 Reinsurance Company through which the Company gains access to all of its reinsurance risk exposures, agreed terms with more than 20 counterparties in respect of reinsurance transactions. The counterparties deployed all of the available assets under management as at 1 January 2012.

Contracts typically have a 12-month risk period commencing on 1 January 2012 and expiring on 31 December 2012. Although there is a small portion of the portfolio written on a non-calendar basis. All Reinsurance Agreements written by CATCo are fully collateralised with liquid securities, namely, AAA-rated money market funds or short term US Treasury Bills which reside in Reinsurance Trust Accounts with the Bank of New York and whom act as Trustee.

Reinsurance Portfolio Diversification

CATCo’s reinsurance portfolio contains a broad mix of 38 risk pillars (as at 30 June 2012). This diversification ensures that exposure to a single loss event, no matter the magnitude of the event, results in no erosion of capital.

In addition, in the event of any single catastrophic loss event CATCo’s maximum exposure to such an event is completely transparent.

Catastrophic Events

Costa Concordia Cruise Ship Disaster

On 13 January 2012, the Costa Concordia cruise ship ran aground and keeled over off the west coast of Italy, near Giglio island, only two hours into a week-long cruise of the Western Mediterranean. There were over 4,200 passengers on the ship with 30 confirmed fatalities consisting of four crew members and 26 passengers. Two further bodies are yet to be found, one crew member and one passenger. The final cost of this accident is still to be determined by the insurance industry.

Current industry estimates suggest an insured loss of circa USD1.050 billion. The CATCo Reinsurance Fund’s investment portfolio (“the Master Fund”), which almost all of the Company’s assets are invested in, does not have any exposure to this marine event for industry losses below USD1.25 billion.

At this level, the Costa Concordia event would have no impact on the Company’s 2012 investment portfolio. For illustrative purposes only, the maximum exposure of the Offshore Marine risk pillar as at 30 April 2012 was 3%, providing a maximum annualised net return of 20% if there were to be a total loss to this pillar associated with this event.

Christchurch (New Zealand) Earthquake and Tohoku (Japan)

The Company's Ordinary Shareholders are indirectly exposed to potential losses arising from the New Zealand earthquake that occurred on 22 February 2011 and the Japan earthquake that occurred on 11 March 2011 through the Master Fund and ultimately through CATCo-Re Ltd. The two retrocessional reinsurance counterparties that represent the NZ and Japan Exposures have implemented a 100% loss reserve on their respective balance sheets associated with CATCo-Re's protections.

As a consequence, the Master Fund's Board of Directors has resolved to include the same loss reserve provision in the Net Asset Value calculation as at 30 June 2012, which has, in turn, been reflected in the Company's Net Asset Value. Shareholders should note that this is a loss reserve, and not a crystalised loss, as CATCo-Re's protections are based on the actual paid claims.

As explained in the subsequent events note, the Company has merged the C Shares, which have no exposure to the NZ and Japanese Exposures, with the Ordinary Shares.

US Hurricane Season

The US hurricane season officially begins every year on 1 June. 44% of the Company’s distribution is in North America and the Caribbean with a large proportion of the exposure being associated to catastrophic wind events.

To date there have been no hurricane events in this region that would have any impact on the Company’s portfolio. During this period the Company benefits from increased levels of premium demonstrating the seasonality of global catastrophic events and incomes received.

Investor Presentation 21 September 2012

On 21 September 2012 the Company and its Manager will be hosting a presentation to shareholders about its investment strategy, expected returns and a review of the retrocessional re-insurance industry. A number of guest speakers will also be present. To attend this event please contact mark.way@catcoim.com.

Outlook

The global retrocessional pricing for the Company’s protection remains favourable given the appetite from reinsurance counterparties. Being fully asset backed, the predicted industry retrocessional capacity erosion experienced during the year from other collateralised reinsurers has created significant advantages for the Company.

The Board is pleased with the progress during the first half of the year with the Company remaining focused on low frequency high-severity exposure profile. The Board remains committed to ensuring that the investment targeted returns are achieved.

Anthony Taylor

Chairman

DIRECTORS’ REPORT

Risks and Uncertainties

The Board of Directors has identified a number of key risks that affect the Company’s business. The principal risks are:

Reinsurance risk

The objective of the Company and of the Master Fund is to give its Shareholders the opportunity to participate in the returns from investments linked to catastrophe reinsurance risks, principally by investing in fully collateralised Reinsurance Agreements accessed by investments in preferred shares of the Reinsurer, CATCo Re Ltd. The Master Fund spreads investment risk by seeking exposure to multiple non-correlated risk categories so as to endeavour to limit the amount of capital at risk with respect to a single catastrophic event. The Company’s Annual Report 2011, at page 18, explains in detail as to how the Company and the Master Fund ensure that appropriate diversification is achieved.

Risks related to the Company’s investment activities

These risks include market price, interest rate, liquidity and credit risk. Such key risks relating to investment and strategy including for example, inappropriate asset allocation or borrowing are managed through investment policy guidelines and restrictions, and by the process of oversight at each Board meeting outlined above. Operational disruption, accounting and legal risks are also covered annually, and regulatory compliance is reviewed at each Board meeting.

Directors’ Responsibility Statement

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

1. The condensed set of financial statements contained within the Half-Yearly Financial Report has been prepared in accordance with the applicable accounting standards.

2. The Chairman’s Statement, the Financial Highlights and the notes to the unaudited financial statements provides a fair review of the information required by rule 4.2.7R of the Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and rule 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the company during that period; and any changes in the related party transaction described in the last annual report that could do so.)

Going Concern Status

The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s statement.

In accordance with the Financial Reporting Council’s guidance on going concern and liquidity risk issued in October 2009, the Board of Directors have undertaken a rigorous review of the Company’s ability to continue as a

going concern.

The Company’s assets consist of cash and a diverse portfolio of retrocessional reinsurance investments which, in most circumstances, are fully liquid at the end of their contractual term. The Board of Directors have reviewed forecasts and they believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing these accounts.