HCC INSURANCE HOLDINGS REPORTS RECORD
RESULTS FOR FOURTH QUARTER AND FULL YEAR 2007

HOUSTON (February 19, 2008) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) today reported record earnings for the fourth quarter and full year ended December 31, 2007.

Net earnings increased 23 percent during the fourth quarter of 2007 to $99.6 million, compared with $80.7 million during the fourth quarter of 2006. Net earnings per diluted share also increased 23 percent to $0.85 per share from $0.69 per share for the fourth quarter of 2006.

For the full year of 2007, net earnings increased 16 percent to $395.4 million from $342.3 million in the previous year. Diluted earnings per share increased 15 percent to $3.38 per share from $2.93 per share in 2006.

“The results achieved during 2007 reflect the true talent of our underwriting focused organization. What should stand out about HCC is that we have good businesses run by great people executing a consistently conservative business plan that generated a return on beginning equity for 2007 of 19.4 percent and an average return on equity of 16.5 percent for the last six years,” HCC Chief Executive Officer Frank J. Bramanti said.

Revenues for the fourth quarter of 2007 totaled $614.4 million, compared to $599.1 million in the fourth quarter of 2006. Total revenue for the full year increased 15 percent to $2.4 billion from $2.1 billion in 2006. This increase was primarily due to an increase in net earned premium and higher investment income.

Other operating income was $7.9 million for the fourth quarter of 2007, compared to $17.9 million for the same period in 2006 where the sale of two strategic investments generated $14.2 million.

Net earned premium of the Company’s insurance company subsidiaries continued to show growth during 2007, rising 16 percent to $2.0 billion, compared with $1.7 billion in 2006. During the 12-month period, gross and net written premium increased 10 percent to $2.5 billion and $2.0 billion, respectively. Both gross and net written premium growth came from an acquisition in the medical stop-loss line of business, and organic growth in surety, credit and the Company’s other specialty lines.

The GAAP combined ratio of the Company’s insurance company subsidiaries was 85.1 percent for the fourth quarter of 2007, compared with 87.7 percent for the fourth quarter of 2006. The GAAP combined ratio was 83.4 percent for the 2007 full year, compared with 84.2 percent for 2006.

Fee and commission income rose slightly during 2007 to $140.1 million from $137.1 million in 2006. Fee and commission income for the fourth quarter of 2007 was $34.1 million, compared with $32.7 million in the fourth quarter of the previous year.

Net investment income increased 35 percent during 2007 to $206.5 million, from $152.8 million in 2006. This growth was due primarily to increased investment assets.

There were no impairment losses in HCC’s investment portfolio in the fourth quarter or full year of 2007. As of December 31, 2007, HCC’s fixed income investment portfolio had an average rating of AAA, duration of five years and an average tax equivalent yield of 5.4 percent. HCC owns no CDO or CLO securities.

“Our assets continue to be managed by outside firms that specialize in the insurance industry. These managers, together with our conservative investment policy, kept our exposures to the current credit turmoil to a minimum,” Mr. Bramanti said.

The attached tables include information related to the Company’s subprime exposure with respect to its investments and its underwriting.

As of December 31, 2007, total investments had increased 19 percent to $4.7 billion; total assets had risen 6 percent to $8.1 billion; shareholders’ equity had increased 19 percent to $2.4 billion; and book value per share had increased 16 percent to $21.21; all compared to December 31, 2006. In addition, the Company’s debt to total capital ratio remained very conservative at 11.7 percent. (See attached tables.)

“As we enter 2008, HCC is well positioned with the best capital position in its history. The softening market makes our experienced, disciplined approach the key to avoiding the pitfalls of the deteriorating underwriting environment,” Mr. Bramanti said.

In addition to reporting its fourth quarter and year-end 2007 results today, HCC is also providing earnings guidance for 2008 and announcing quarterly release dates during the year. The Company’s management estimates HCC will achieve net earnings in the range of $2.90 to $3.20 per share for the full year of 2008, versus 2007 guidance of $3.10 to $3.25 per share. These estimated results assume, for the full year, net written premium of $2.0 billion, total revenue of $2.3 billion, a combined ratio of 85 percent, and average fully diluted shares outstanding of 118.5 million.

The Company’s earnings announcements in 2008 will be made after the market closes on: May 6, 2008 for First Quarter 2008; August 5, 2008 for Second Quarter 2008; and November 4, 2008 for Third Quarter 2008. HCC will hold an open conference call at 8:00 a.m. Central Time on the morning following each quarterly earnings announcement to discuss the results. Conference call information will be posted on the Company’s website (www.hcc.com) approximately two weeks prior to each call. Each conference call will also be available by webcast through the HCC website.

HCC will hold an open conference call beginning at 8:00 a.m. Central Time tomorrow, Wednesday, February 20, 2008 to discuss these results. To participate, the number for domestic calls will be (800) 374-0290 and the number for international calls will be (706) 634-1303. There will also be a live webcast available on a listen-only basis that can be accessed through the HCC website at www.hcc.com. A replay of the webcast will be available on the website until Friday, March 14, 2008.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. (HCC) is a leading international specialty insurance group with offices across the United States and in Bermuda, Spain, Ireland and the United Kingdom. HCC has assets of nearly $8.1 billion, shareholders’ equity in excess of $2.4 billion and is rated AA (Very Strong) by Standard & Poor’s, AA (Very Strong) by Fitch Ratings and A+ (Superior) by A.M. Best Company.

For more information, visit our website at www.hcc.com.

©2005 HCC Insurance Holdings, Inc.