HCC REPORTS SECOND QUARTER 2007
AND HALF YEAR RESULTS

HOUSTON (August 7, 2007) . . .
HCC Insurance Holdings, Inc. (NYSE symbol: HCC) today released earnings for the second quarter and first half of 2007.

Net earnings increased 13% during the second quarter of 2007 to a record $101.2 million from $89.1 million and net earnings per diluted share also increased 13% to $0.86 per share from $0.76 per share, both compared to the same period in 2006. This was the first time quarterly net earnings exceeded $100 million.

Net earnings increased significantly during the first six months of 2007, rising 18% to $197.9 million from $168.3 million and diluted earnings per share increased 17% to $1.69 per share from $1.44 per share, both compared to the first six months of 2006.

Total revenue during the first six months of 2007 increased 24% to $1.2 billion from $959.5 million in the corresponding period of 2006. This increase was primarily from growth of earned premium and investment income.

Net earned premium of the Company’s insurance company subsidiaries continues to show strong growth rising by 27% to $992.0 million during the first six months of 2007 compared to $783.9 million in the first half of 2006. During the same period, net written premium increased by 18% to $1.0 billion and gross written premium grew 16% to $1.3 billion. Gross written premium growth primarily came from an acquisition in our life, accident and health business and from organic growth in our credit and surety operations. Net written premium growth occurred principally due to the growth in gross written premium.

The GAAP combined ratio of the Company’s insurance company subsidiaries was 84.0% for the first six months of 2007 compared to 84.2% in the corresponding period of 2006. There was net negative reserve development of $3.6 million for the first six months of 2007, which includes $1.2 million of amortization of reserve discounts from acquisitions.

Frank J. Bramanti, Chief Executive Officer commented, “HCC has turned in another strong quarter and first half of 2007 in an increasingly competitive environment. Our underwriting discipline and specialty focus should help us avoid the pitfalls of this softening marketplace.”

Fee and commission income was down slightly during the first six months of 2007 to $63.3 million from $65.5 million in the first half of 2006. Increasing our fee based business remains a focus of our acquisition efforts.

Net investment income increased by 35% in the first half of 2007 to $98.2 million, compared to $72.8 million in the corresponding period of 2006. This growth was due to increased investment assets and higher interest rates.

As of June 30, 2007, our fixed income investment portfolio had an average rating of AAA, a duration of 4.9 years and an average tax equivalent yield of 5.3%. The Company held $6.8 million of sub-prime bonds and $14.3 million of Alt-A bonds which had an unrealized loss of $263,000. The average rating on these bonds is AAA, and there have been no rating actions or surveillance issues associated with them. At the purchase date, these bonds were modeled using loan-to-value as the primary potential loss determinant. The Company owns no CDOs or CLOs.

While much has been written recently about defaults on U.S. sub-prime mortgages, the Company has written no domestic mortgage guaranty insurance and believes it has little or no exposure on its small amount of International mortgage-related programs.

As of June 30, 2007, total investments increased 11% to $4.3 billion; total assets grew to $7.9 billion; shareholders’ equity increased to $2.2 billion; book value per share increased 7% to $19.52; and the Company’s debt to total capital ratio remains very conservative at 13.7%, all compared to December 31, 2006. See attached tables.

HCC will hold an open conference call beginning at 8:00 a.m. Central Time on Wednesday, August 8 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.hcc.com. A replay of the webcast will be available on the website until Friday, September 7, 2007.

Headquartered in Houston, Texas, 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 exceeding $7.9 billion, shareholders’ equity of almost $2.2 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.hcc.com.

©2005 HCC Insurance Holdings, Inc.