HCC TO ACQUIRE MINORITY INTEREST
IN UK BASED DEMONTFORT GROUP
 

HOUSTON (October 27, 2004) . . .
HCC Insurance Holdings, Inc. (NYSE symbol: HCC) announced today that the Company had reached an agreement to acquire the 34% interest, currently owned by CNA Surety (NYSE: SUR), in the common shares of the DeMontfort Group of companies. In addition, HCC has agreed to purchase certain preferred shares and indebtedness also from CNA Surety, for an undisclosed cash consideration. The transaction is expected to close shortly following receipt of UK regulatory approvals.

DeMontfort is an insurance company located near Leicester, England that provides surety and credit insurance to small and medium size companies throughout the UK and Ireland. Executive management Jim Davidson and Martyn Ward head up a team of professionals at DeMontfort, which has been in business for 22 years and currently underwrites almost ₤20 million in annual premium. For more information visit their website at www.demontfort.com.

Stephen L. Way, Chairman and Chief Executive Officer, commenting on the transaction said, “We are very pleased to be able to expand our European presence through this strategic investment in such a well managed and efficient operation and believe that our involvement will help DeMontfort further develop its business and become the leading UK market in their specialty area.”

HCC is an international insurance holding company and a leading specialty insurance group since 1974, based in Houston, Texas with offices across the USA and in Bermuda, England and Spain. HCC has assets of more than $5 billion, shareholders’ equity of over $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.