HCC REPORTS STRONG UNDERLYING RESULTS
AND PROFIT DESPITE HURRICANE LOSSES

HOUSTON (November 1, 2005) . . .
HCC Insurance Holdings, Inc. (NYSE symbol: HCC) today released earnings for the third quarter and first nine months of 2005.

Net earnings for the third quarter of 2005 were lower at $8.0 million, or $0.07 per diluted share, compared to $15.8 million, or $0.16 per diluted share, for the third quarter of 2004 due to the impact of the previously reported hurricane losses and the effect of reinsurance commutations completed during the quarter, which together reduced net earnings by $65.2 million, or $0.59 per diluted share. Hurricane losses also affected net earnings in the same period in 2004 by $35.7 million, or $0.36 per diluted share.

For the first nine months of 2005 and despite the effect of the third quarter hurricane activity and the reinsurance commutations, net earnings increased 21% to a record $129.3 million, or $1.20 per diluted share, from $106.8 million, or $1.09 per diluted share, in the corresponding period of 2004.

Stephen L. Way, Chairman and Chief Executive Officer, said, “Our core operations continue to perform very well, notwithstanding the effect of the unprecedented hurricane losses and we expect strong earnings growth to continue into 2006.”

Total revenue showed significant growth, increasing 30% for the first nine months of 2005 to $1.2 billion from $917.5 million in the corresponding period of 2004. This increase was predominantly due to the organic growth in most lines of business, investment income and various acquisitions made in 2004 and 2005.

The GAAP net combined ratio of our insurance company subsidiaries for the first nine months of 2005 was 94.3% compared to 92.9% in the same period of 2004, but on substantially higher net earned premium. Without the effect of the hurricanes and the reinsurance commutations, the combined ratio would have been lower by 9.8% for the first nine months of 2005 and lower by 7.6% during the same period in 2004.

Premium of our insurance company subsidiaries continued to grow substantially during the first nine months of 2005, with net written premium increasing 38% to $1.1 billion from $800.4 million during the first nine months of 2004 and net earned premium increasing by 39% to $995.9 million from $717.3 million during the same period. Excluding discontinued lines of business, these increases were considerably greater with net written premium rising 42% and net earned premium rising 46%. The larger premiums are a result of various acquisitions in 2004 and 2005 and strong organic growth, particularly in our diversified financial products and life, accident and health lines of business where we significantly increased our retentions in 2005.

Mr. Way added, “Rates generally seem to be stabilizing and increases are expected in several lines following the disastrous industry results in the third quarter of 2005, giving us further optimism about future earnings growth.”

Fee and commission income decreased during the first nine months of 2005 to $102.5 million from $135.8 million in the same period of 2004. This decrease is due to planned reductions in ceded reinsurance and the integration of our largest underwriting agency into our life insurance company subsidiary.

Net investment income increased 54% in the first nine months of 2005 to a record $70.0 million from $45.6 million in the same period of 2004. This growth was primarily a result of higher short-term yields and increased investment assets, which grew 20% as of September 30, 2005, to $3.0 billion compared to $2.5 billion at December 31, 2004. The Company continues to follow a conservative investment philosophy with a relatively short duration portfolio, no junk bonds and relatively few equity investments.

Cash flow from operating activities continued to be very strong during the first three quarters of 2005 increasing to $453.3 million from the previous record of $350.6 million during the first nine months of 2004, as a result of increased net loss reserves and reinsurance commutations during the third quarter of 2005.

As of September 30, 2005, total assets grew 12% to $6.6 billion; book value per share increased 8% to $13.97; and shareholders’ equity grew 12% to $1.5 billion, all compared to December 31, 2004. The Company’s debt to total capital ratio was 17.3% at the end of the third quarter of 2005. See attached tables.

HCC will hold an open conference call beginning at 4:00 p.m. (CST) on Tuesday, November 1, to discuss these results. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-1303. In addition, there will be a live webcast available on a listen-only basis that can be accessed through the HCC website at www.hcch.com. A replay of the webcast will be available until Tuesday, November 8, 2005.

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 exceeding $6.6 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.