Montpelier Notes Capitalization of Blue Ocean Re Holdings Ltd.

January 2, 2006

Bermuda-based Montpelier Re Holdings Ltd. has joined with other investors in capitalizing a new Bermuda reinsurer, Blue Ocean Reinsurance Ltd.

Blue Ocean will offer retrocessional protection, or reinsurance for reinsurers, in the property catastrophe market. Blue Ocean has been capitalized with commitments for $300 million of common and preferred equity, including a $133 million investment by Montpelier.

Blue Ocean will provide fully collateralized retrocessional protection to parties other than Montpelier and has no current plans to obtain a rating from any rating agency. Initially, Blue Ocean anticipates underwriting gross aggregate policy limits in excess of $350 million.

Montpelier Agency Ltd., a subsidiary of Montpelier, will perform underwriting services for Blue Ocean, enabling Montpelier to leverage its skill set on a capital base distinct from Montpelier Reinsurance Ltd. John Bassett, a director of Montpelier Agency Ltd. and previously responsible for Montpelier’s retrocessional business, will oversee the underwriting.

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