Transaction in Own Shares During Close Period

LANCASHIRE HOLDINGS LIMITED (the "Company") 3 October 2014London, UK Transaction in own shares during close period On 1 May 2014 it was announced that the Company's shareholders had, at theAnnual General Meeting held on 30 April 2014 (the "AGM"), granted authority tothe Company to make one or more purchases of its issued Common Shares("Shares') up to a maximum number of 18,544,580 Shares (representingapproximately 10% of the issued share capital of the Company as at the date ofthe notice of the AGM). Since the AGM, the Company has repurchased 849,831 ofits Shares under a repurchase programme approved by its board of directors andpursuant to an arrangement with Numis Securities Limited ("Numis") torepurchase Shares on its behalf within certain parameters. The Shares purchasedare currently held as Treasury shares, which the Company expects to use in thefuture towards satisfying its obligations under both its Restricted ShareScheme ("RSS") awards and the Company's warrants. Today, the Company announces that, as the Company will shortly be entering aclose period, in connection with the above share buy-back programme the Companyhas entered into an irrevocable arrangement with Numis to repurchase on itsbehalf and within certain pre-set parameters, Shares from 6 October 2014 untilthe earlier of the completion of the repurchase programme or the Company'sannouncement of its results for the third quarter ending on 30 September 2014which is scheduled for release on 5 November 2014. Numis has been granted the authority to repurchase shares up to an aggregatevalue, including Shares already repurchased and costs, of $25 million. This arrangement is in accordance with Listing Rules 12.2.1R and 12.4.4R of theListing Rules and the Company's general authority to repurchase shares. The Company confirms that it currently has no unpublished price sensitiveinformation. 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 Numis Securities Limited +44 20 7260 1000Charles Farquhar Haggie Partners +44 20 7562 4444Peter Rigby (Peter Rigby mobile +44 7803851426) This announcement does not constitute an invitation or offer to buy anysecurities of the Company. None of the securities referred to in thisannouncement shall be sold, issued, exchanged or transferred in anyjurisdiction in contravention of applicable laws. Numis Securities Limited, which is authorised and regulated in the UnitedKingdom by the Financial Conduct Authority, is acting exclusively forLancashire Holdings Limited and no one else in relation to the repurchaseprogramme, will not regard any other person as a client in relation to therepurchase programme and will not be responsible to anyone other thanLancashire Holdings Limited for providing the protections afforded toLancashire Holdings Limited nor for providing advice in relation to therepurchase programme and/or any other matter referred to in this announcement. This announcement is not an offer in or into the United States. 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 29th Floor, 20 Fenchurch Street, London EC3M 3BY, United Kingdom andits registered office at Power House, 7 Par-la-Ville Road, Hamilton HM 11,Bermuda. For more information on Lancashire and Lancashire's subsidiary and Lloyd'ssegment, Cathedral Capital Limited ("Cathedral"), visit the Company's websiteat www.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. 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.