HCC CONTINUES SUCCESSFUL ACQUISITION STRATEGY WITH THE PURCHASE OF
AMERICAN CONTRACTORS INDEMNITY COMPANY

HOUSTON (December 11, 2003) . . .
Stephen L. Way, Chairman and Chief Executive Officer of HCC Insurance Holdings, Inc. (NYSE symbol: HCC), announced today that the Company had reached an agreement to acquire Surety Associates Holding Co. Inc. and their subsidiary American Contractors Indemnity Company (ACIC), a surety company headquartered in Los Angeles, California. This transaction, the terms of which were not disclosed, is subject to regulatory approval and is expected to close in the next few weeks.

Acquired in 1990 by Skipper G. Baumgarten, ACIC grew to be a market leader providing court, specialty contract, license and permit bonds. Regrettably, Mr. Baumgarten was permanently disabled by a stroke suffered in July 2001 and consequently the Company is now being sold. Non-executive Chairman Bill LeVine and current management, led by Chief Executive Officer Robert F. Thomas, have guided the Company very well during this difficult time.

Bob Thomas, formerly with reinsurance broker E. W. Blanch, will continue to oversee operations following the acquisition. Lee Back (fiduciary and judicial bonds), who has been with ACIC for eight years, and Scott Anschultz (bail bonds), who has been with the Company for nine years, will continue to be part of the stable and experienced underwriting team at ACIC. Stephen T. Pate, formerly President of Western Surety Company (CNA Surety) and with over twenty-five years of surety experience, will join the Company in early January to oversee the contract and commercial surety division.

John Knox, Jr., Chief Executive Officer of Houston based SureTec Financial Corp. (www.suretec.com) will become Chairman of the Board. Mr. Knox formed SureTec in 2000 and previously founded Universal Surety of America in 1983, which he continued to manage until 1998, following its sale to Capsure (CNA Surety) in 1994. SureTec, in which HCC has a minority interest, will participate in ACIC’s operations through a quota share reinsurance arrangement.

Mr. Way said, “We are very pleased to make this acquisition, which will further expand our diversified financial products segment and be immediately accretive.” He added, “ACIC’s small business profile and national platform will provide HCC the formula for future growth and success in the surety business.”

ACIC’s gross written premium is estimated to be more than $50 million in 2004. For more information, visit the ACIC website at www.acicbond.com.

HCC is an international insurance holding company and a leading specialty insurance group since 1974, with offices in Bermuda, Spain, the UK and across the USA. HCC is traded on the NYSE, has assets of $4.6 billion, shareholders equity of more than $1 billion and is rated AA (Very Strong) by Standard & Poor’s and A+ (Superior) by A. M. Best Company.

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

©2005 HCC Insurance Holdings, Inc.