Transaction in Own Shares

LANCASHIRE HOLDINGS LIMITED 9 September 2014London, UK Transaction in own shares Lancashire Holdings Limited (the "Company") announces that on 8 September 2014,it purchased 89,810 Common Shares at a price of 609.53 pence per share(approximately $9.84 per share). The lowest price and the highest price paid for these shares were 608.0 penceand 612.5 pence, respectively. All the purchased shares will be held initiallyas Treasury shares. The Company expects to use the shares in the future towardssatisfying its obligations under both its Restricted Share Scheme ("RSS")awards and the Company's warrants. Following the above purchases, the Company holds 1,997,898 Common Shares inTreasury. The Company has 190,114,700 Common Shares in issue (excluding Treasury shares). The above figure may be used by shareholders as the denominator for thecalculations by which they will determine if they are required to notify theirinterest in, or a change to their interest in, the Company under the FinancialConduct Authority's Disclosure Rules and Transparency Rules. For further information, please contact: Lancashire Holdings Limited Christopher Head +44 20 7264 4145 chris.head@lancashiregroup.com Jonny Creagh-Coen +44 20 7264 4066 jcc@lancashiregroup.com Haggie Partners +44 20 7562 4444 Peter Rigby (Peter Rigby mobile +44 7803851426) About Lancashire Lancashire, through its UK and Bermuda-based operating subsidiaries, is aglobal provider of specialty insurance and reinsurance products. The Groupcompanies carry the following ratings: Financial Financial Long Term Strength Strength Issuer Rating (1) Outlook(1) Rating (2) A.M. Best A (Excellent) Stable bbb Standard & Poor's A- Stable BBB Moody's A3 Stable Baa2 (1)Financial Strength Rating and Financial Strength Outlook apply to LancashireInsurance Company Limited and Lancashire Insurance Company (UK) Limited. (2) Long Term Issuer Rating applies to Lancashire Holdings Limited. Cathedral benefits from Lloyd's ratings: A.M. Best: A (Excellent); Standard &Poor's: A+ (Strong); and Fitch: AA- (Very Strong). Lancashire has capital in excess of $1.5 billion and its common shares trade onthe premium segment of the Main Market of the London Stock Exchange under theticker symbol LRE. Lancashire has its corporate headquarters and mailingaddress at Level 11, Vitro, 60 Fenchurch Street, London EC3M 4AD, UnitedKingdom and its registered office at Power House, 7 Par-la-Ville Road, HamiltonHM 11, Bermuda. For more information on Lancashire, visit the Company's website atwww.lancashiregroup.com Lancashire Insurance Company Limited is regulated by the Bermuda MonetaryAuthority in Bermuda. Lancashire Insurance Company (UK) Limited is authorised by the PrudentialRegulation Authority and regulated by the Financial Conduct Authority and thePrudential Regulation Authority in the UK. Kinesis Capital Management Limited is regulated by the Bermuda MonetaryAuthority in Bermuda. For more information on Lancashire's subsidiary and Lloyd's segment, CathedralCapital Limited ("Cathedral"), visit Cathedral's website atwww.cathedralcapital.com Cathedral Underwriting Limited is authorised by the Prudential RegulationAuthority and regulated by the Financial Conduct Authority and the PrudentialRegulation Authority in the UK. NOTE REGARDING FORWARD-LOOKING STATEMENTS: CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELED LOSSSCENARIOS) MADE IN THIS RELEASE OR OTHERWISE THAT ARE NOT BASED ON CURRENT ORHISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION,STATEMENTS CONTAINING THE WORDS "BELIEVES", "ANTICIPATES", "PLANS", "PROJECTS","FORECASTS", "GUIDANCE", "INTENDS", "EXPECTS", "ESTIMATES", "PREDICTS", "MAY","CAN", "WILL", "SEEKS", "SHOULD", OR, IN EACH CASE, THEIR NEGATIVE ORCOMPARABLE TERMINOLOGY. ALL SUCH STATEMENTS OTHER THAN STATEMENTS OF HISTORICALFACTS INCLUDING, WITHOUT LIMITATION, THE GROUP'S FINANCIAL POSITION, RESULTS OFOPERATIONS, PROSPECTS, GROWTH, CAPITAL MANAGEMENT PLANS AND EFFICIENCIES,ABILITY TO CREATE VALUE, DIVIDEND POLICY, OPERATIONAL FLEXIBILITY, COMPOSITIONOF MANAGEMENT, BUSINESS STRATEGY, PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTUREOPERATIONS (INCLUDING DEVELOPMENT PLANS AND OBJECTIVES RELATING TO THE GROUP'SINSURANCE BUSINESS) ARE FORWARD LOOKING STATEMENTS. SUCH FORWARD-LOOKINGSTATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHERIMPORTANT FACTORS THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE ORACHIEVEMENTS OF THE GROUP TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS,PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKINGSTATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE GROUP'S ABILITY TO INTEGRATEITS BUSINESSES AND PERSONNEL; THE SUCCESSFUL RETENTION AND MOTIVATION OF THEGROUP'S KEY MANAGEMENT; THE INCREASED REGULATORY BURDEN FACING THE GROUP, THENUMBER AND TYPE OF INSURANCE AND REINSURANCE CONTRACTS THAT THE GROUP WRITES ORMAY WRITE; THE PREMIUM RATES WHICH MAY BE AVAILABLE AT THE TIME OF SUCHRENEWALS WITHIN ITS TARGETED BUSINESS LINES; THE POSSIBLE LOW FREQUENCY OFLARGE EVENTS; POTENTIALLY UNUSUAL LOSS FREQUENCY; THE IMPACT THAT THE GROUP'SFUTURE OPERATING RESULTS, CAPITAL POSITION AND RATING AGENCY AND OTHERCONSIDERATIONS MAY HAVE ON THE EXECUTION OF ANY CAPITAL MANAGEMENT INITIATIVESOR DIVIDENDS; THE POSSIBILITY OF GREATER FREQUENCY OR SEVERITY OF CLAIMS ANDLOSS ACTIVITY THAN THE GROUP'S UNDERWRITING, RESERVING OR INVESTMENT PRACTICESHAVE ANTICIPATED; THE RELIABILITY OF, AND CHANGES IN ASSUMPTIONS TO,CATASTROPHE PRICING, ACCUMULATION AND ESTIMATED LOSS MODELS; THE EFFECTIVENESSOF ITS LOSS LIMITATION METHODS; THE POTENTIAL LOSS OF KEY PERSONNEL; A DECLINEIN THE GROUP'S OPERATING SUBSIDIARIES' RATING WITH A.M. BEST, STANDARD &POOR'S, MOODY'S OR OTHER RATING AGENCIES; INCREASED COMPETITION ON THE BASIS OFPRICING, CAPACITY, COVERAGE TERMS OR OTHER FACTORS; CYCLICAL DOWNTURNS OF THEINDUSTRY; THE IMPACT OF A DETERIORATING CREDIT ENVIRONMENT FOR ISSUERS OF FIXEDINCOME INVESTMENTS; THE IMPACT OF SWINGS IN MARKET INTEREST RATES ANDSECURITIES PRICES; A RATING DOWNGRADE OF, OR A MARKET DECLINE IN, SECURITIES INITS INVESTMENT PORTFOLIO; CHANGES IN GOVERNMENTAL REGULATIONS OR TAX LAWS INJURISDICTIONS WHERE THE GROUP CONDUCTS BUSINESS; ANY OF LANCASHIRE'S BERMUDIANSUBSIDIARIES BECOMING SUBJECT TO INCOME TAXES IN THE UNITED STATES OR THEUNITED KINGDOM; THE INAPPLICABILITY TO THE GROUP OF SUITABLE EXCLUSIONS FROMTHE NEW UK CFC REGIME; AND ANY CHANGE IN THE UK GOVERNMENT OR UK GOVERNMENTPOLICY WHICH IMPACTS THE NEW CFC REGIME . ALL FORWARD-LOOKING STATEMENTS IN THIS RELEASE SPEAK ONLY AS AT THE DATE OFPUBLICATION. LANCASHIRE EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING (SAVEAS REQUIRED TO COMPLY WITH ANY LEGAL OR REGULATORY OBLIGATIONS INCLUDING THERULES OF THE LONDON STOCK EXCHANGE) TO DISSEMINATE ANY UPDATES OR REVISIONS TOANY FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN THE GROUP'SEXPECTATIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED.