HCC INSURANCE HOLDINGS REPORTS RESULTS
FOR 2007 THIRD QUARTER AND FIRST NINE MONTHS

HOUSTON (November 6, 2007) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) today released earnings for the third quarter and first nine months of 2007, which ended September 30.

Net earnings increased five percent during the third quarter of 2007 to $97.9 million, compared with $93.3 million during the third quarter of the previous year. Net earnings per diluted share also increased by five percent to $0.84 per share from $0.80 per share for the third quarter of 2006.

Net earnings increased 13 percent during the first nine months of 2007 to $295.8 million from $261.5 million, and diluted earnings per share also increased 13 percent to $2.54 per share from $2.24 per share, both compared to the first nine months of 2006.

“The third quarter was another strong one for HCC. The price declines we are seeing on our specialty business are only minimally affecting our underwriting margins. Our results through September 30, 2007 continue at record levels,” HCC Chief Executive Officer Frank J. Bramanti said.

Revenues for the third quarter of 2007 totaled $582.5 million, compared with $516.7 million a year earlier. Total revenue during the first nine months of 2007 increased 20 percent to $1.8 billion from $1.5 billion in the corresponding period of 2006. This increase was primarily due to acquisitions in 2006 and increased investment income on higher investment assets.

Other operating income was a loss of $3.1 million for the third quarter of 2007, compared with income of $20.3 million for the year-earlier period. The loss includes a $9.3 million unrealized loss on two strategic investments which are accounted for as trading securities.

Net earned premium of the Company’s insurance company subsidiaries continued to show growth during the first nine months of 2007, rising 23 percent to $1.5 billion during the first nine months of 2007, compared with $1.2 billion for the first nine months of 2006. During the same period, net written premium increased by 15 percent to $1.5 billion, while gross written premium grew 14 percent to $1.9 billion. Both gross and net written premium growth came primarily from 2006 acquisitions and from HCC’s Lloyd’s operation.

The GAAP combined ratio of the Company’s insurance company subsidiaries was 80.8 percent for the third quarter of 2007, compared with 80.6 percent for the third quarter of 2006. The GAAP combined ratio was 82.9 percent for the first nine months of 2007, the same as in the corresponding period of 2006.

There was net positive prior years reserve development of $23.0 million for the third quarter of 2007 and $19.4 million for the first nine months of 2007, versus $6.8 million and $6.0 million for the same periods in 2006.

Fee and commission income rose slightly during the first nine months of 2007 to $106.0 million from $104.4 million for the first nine months of 2006. Fee and commission income for the third quarter of 2007 was $42.7 million, compared with $38.9 million in the third quarter of the previous year.

Net investment income increased 36 percent in the first three quarters of 2007 to $148.1 million, versus $109.0 million for the corresponding period of 2006. This growth was due primarily to an increase in investment assets as well as an increase in interest rates.

As of September 30, 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. The Company held $6.5 million of subprime bonds and $13.3 million of Alt-A bonds which had an unrealized loss of $300,000. The average rating on these subprime bonds was AAA, and there have been no rating actions or surveillance issues associated with them. The Company owns no CDOs or CLOs.

“While much has been written about defaults on U.S. subprime mortgages, HCC has not written any domestic mortgage guaranty insurance and we believe the Company has little or no exposure on its small amount of international mortgage-related business,” Mr. Bramanti said.

As of September 30, 2007, total investments had increased 15 percent to $4.5 billion; total assets had grown to $8.1 billion; shareholders’ equity had increased to $2.3 billion; book value per share had increased 12 percent to $20.39; and the Company’s debt to total capital ratio remained very conservative at 11.6 percent; 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, November 7, 2007 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, November 30, 2007.

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 more than $8.0 billion, shareholders’ equity in excess of $2.3 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.