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Trenwick Completes Reserve Study; Will Increase Reserves by $107 Million in the Fourth Quarter of 2002.

Business Editors

HAMILTON, Bermuda--(BUSINESS WIRE)--Jan. 30, 2003

Trenwick Group Ltd. (NYSE: TWK) announced today that it will increase its reserves for losses in the fourth quarter of 2002 by $107 million, or $2.90 per share.

The increases in Trenwick's reserves are based upon a previously announced study of the reserving levels and methodology of Trenwick's insurance subsidiaries by independent actuarial consultants and additional work performed during the quarter by the Company's internal actuaries. The increases in reserves impact Trenwick's United States operating subsidiaries and Trenwick International Limited, in the UK. Trenwick's reserves at its Lloyd's operation, while also analyzed, were not significantly affected by this reserve increase.

The reserve increase reflects a reassessment of Trenwick's loss reserves in light of recent reported loss activity trends across its major business groups and principally impacts the 1999 to 2001 accident years. Included in the reserve increase was $20 million relating to Trenwick's exposure to asbestos and environmental liabilities. Following this increase to Trenwick's asbestos and environmental reserves, Trenwick's three year survival ratio (i.e., number of years that existing reserves will last if the current level of average annual payments for the last three years repeats itself indefinitely) for this type of exposure will be approximately 13 years.

W. Marston Becker, Acting Chairman and Acting Chief Executive Officer of Trenwick, stated, "Trenwick's operations, other than its North American reinsurance business and its Lloyd's businesses, are currently in runoff. The completion of Trenwick's reserve study and its significant increase in loss reserves for the fourth quarter of 2002 demonstrates Trenwick's continued commitment to ensuring that its balance sheet appropriately reflects ongoing actuarial developments within the Company and the industry."

The financial results of Trenwick for the fourth quarter of 2002, including its net reserve increase and a corresponding reduction of approximately $12 million in outstanding contingent indebtedness in computing the $107 million charge, will be presented in Trenwick's year-end earnings release.

Background Information

Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization with two principal businesses operating through its subsidiaries located in the United States, the United Kingdom and Bermuda. Trenwick's reinsurance business provides treaty reinsurance to insurers of property and casualty risks from offices in the United States and Bermuda. Trenwick's operations at Lloyd's of London underwrite specialty insurance as well as treaty and facultative reinsurance on a worldwide basis.

Safe Harbor for Forward-Looking Statements

Certain statements made in this press release that are not based on current or historical facts are forward-looking in nature including, without limitation, statements containing words "believes," "anticipates," "plans," "projects," "intends," "expects," "estimates," "predicts," and words of similar import. Such forward-looking statements, including in particular Trenwick's forecast of future results, involve known and unknown risks, assumptions, uncertainties, and other factors that may cause actual results, performance, or achievements of Trenwick to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. In particular, forecasting of reserves for future losses is based on historical experience and future assumptions. As a result they are inherently subjective and may fluctuate based on actual future experience and changes to current or future trends in the legal, social or economic environment.

Trenwick has identified certain risk factors which could cause actual plans or results to differ substantially from those included in any forward-looking statements. These risk factors are discussed in Trenwick's Securities and Exchange Commission filings, including but not limited to its most recent Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission, and such discussions regarding risk factors are hereby incorporated by reference into this press release. Copies of such Securities and Exchange Commission filings are available from Trenwick or directly from the Securities and Exchange Commission.
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Publication:Business Wire
Date:Jan 30, 2003
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