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December 2nd, 2003

Talbot Holdings Ltd Announces Capital of $205 Million For 2004 Year

Talbot Holdings Ltd (“Talbot”) is pleased to announce that it has secured capital of $205 million to support its underwriting activities in the Lloyd’s insurance market for the 2004 year of account. This capital includes approximately $64 million raised through the issue of new convertible preference shares, which have been acquired by investment funds managed by the private equity firm, Olympus Partners, and investment funds managed by Reservoir Capital Group and Intermediate Capital Group.

Based in Bermuda, Talbot is the parent of a specialty insurance group operating within the Lloyd’s insurance market. Talbot focuses on underwriting a number of specialty risks, with particularly strong franchises in marine and energy lines, war and political risks, direct property, financial institutions and treaty underwriting. The group’s UK business is led by Michael Carpenter, Chief Executive, and Rupert Atkin, Director of Underwriting.

Talbot’s capital of $205 million will be used to support the group’s underwriting on its wholly owned Syndicate 1183 for the 2004 year of account. This will enable the Syndicate’s underwriting capacity to be increased to £287.5 million ($488 million). The group plans to increase its gross premium income for the 2004 year to £258 million, which compares with estimated gross premium income for 2003 of £246 million.

The new investment in convertible preference shares will increase Talbot’s permanent capital base. Olympus Partners, based in Stamford, Connecticut (USA), led the transaction with a $50 million investment. Reservoir Capital Group, a New York based private investment firm, and Intermediate Capital Group, a leading European mezzanine finance company based in London, also participated.

As part of these financing arrangements, Talbot has arranged a $20 million letter of credit facility from Lloyds TSB to support 2004 underwriting. This facility, combined with the new capital raised, enables the group to provide from its own resources approximately 54% of the $205 million group capital. The remaining capital continues to be provided by a number of third party capital providers. These include Berkshire Hathaway Insurance Group, investment funds managed by Reservoir Capital Group, Walsham Brothers, senior executives of the group and Talbot’s US shareholders.

Lexicon Partners acted as financial adviser to Talbot in respect of this transaction.

Commenting on the capital raising, Michael Carpenter, Chief Executive, said:

“This new capital will facilitate the further growth and development of Talbot. We have generated strong underwriting profits since our formation at the start of 2002 and expect the underwriting and rating environment to remain favourable.”

Commenting on behalf of Olympus Partners, Robert S. Morris, Managing Partner, said:

“We have been very impressed by the quality and integrity of the Talbot team. Helping to provide Talbot’s specialty underwriting team with a well-capitalised balance sheet presents an excellent investment opportunity for Olympus. We are excited to establish this relationship, and look forward to working with Michael, Rupert and the rest of their team in the years ahead.”

Contacts:

Talbot Tel: 020 7550 3500 Michael Carpenter, Chief Executive Rupert Atkin, Director of Underwriting Lexicon Partners Tel: 020 7653 6000 Matthew Lindsey-Clark Tony D’Souza

Notes to Editors:

Talbot

Talbot Holdings Ltd was established jointly in November 2001 by the Talbot UK management team, led by Chief Executive, Michael Carpenter, and Director of Underwriting, Rupert Atkin, together with US-based investors led by Heidi Hutter and Jay Novik from insurance advisory group Black Diamond.

Talbot’s Syndicate 1183 is managed by the group’s wholly-owned managing agency, Talbot Underwriting Ltd, and provides a unique combination of dedicated, skilled professionals who have in-depth knowledge and experience across a wide spectrum of specialty areas of insurance, with a particular focus on marine underwriting. The group also owns an agency, Underwriting Risk Services, which is a leading underwriting agency in the London market in the area of yachts and marinas insurance.

Olympus Partners

Founded in 1989, Olympus Partners is a private equity firm focused on providing equity capital for middle market management buyouts as well as companies needing capital for expansion. Olympus is an active, long-term investor across a broad range of industries, including healthcare services, financial services, distribution and business services.

Olympus manages over $1.6 billion on behalf of over 50 blue-chip investors including corporate pension plans, state retirement systems and university endowment funds. Olympus is currently investing capital from its fourth fund, Olympus Growth Fund IV, a $750 million fund raised in 2003.

This announcement is for information purposes only and does not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, and the rules and regulations thereunder. No securities are being registered for offer or sale in the United States and no public offering of the securities in the United States will be made.

The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption of registration or qualification under the securities laws of any such jurisdiction.

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