1. 0 HARDY UNDERWRITING GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002 ANALYST PRESENTATION 25 SEPTEMBER 2002

2. 1 RESULTS OVERVIEW Board is encouraged by the result for the year so far 2002 year performing well – no major claims to date 2001 continues to develop well with a benign run-off WTC remains at $2.6m net 2000 expected to produce a profit in the range of 0% - 5% optimistic about the year end outlook and the future

3. 2 RESULTS OVERVIEW (continued) syndicate investments have held up well Group funds have suffered from volatility in equity markets new funds retained in cash for the moment

4. 3 UNDERWRITER’S OVERVIEW 2000 and prior years promising run off of earlier years 2000 expected to benefit from prior year release improvements seen across all years

5. 4 UNDERWRITER’S OVERVIEW (continued) 2001 developing well on premium front claims progression better than originally forecast WTC remains at $2.6m net aviation – premium dramatically up on previous year especially last quarter income – tail therefore slightly longer hull and cargo progressing well with good rate increases

6. 5 UNDERWRITER’S OVERVIEW (continued) 2002 written premium volumes holding up well envisaging approximately £62m overall: quota share syndicate will take £10m capacity (being excess over syndicate 382’s capacity of £54m with margin for prudence) remarkable year for lack of claims incidence aviation very exciting – rating levels holding up well cargo – developing well marine hull – promising but not there yet non-marine – volume has been disappointing; new niche lines envisaged for next year

7. 6 UNDERWRITER’S OVERVIEW (continued) The future syndicate pre-emption to £100m for 2003 overall premium rating levels very satisfactory aviation -developing new accounts throughout portfolio -on-line quoting facility very well received marine including cargo -the book is very attractive although resource intensive -enhanced recently by a developing specie/fine art account non-marine -new underwriter recruited to help develop account further and introduce new niche lines

8. 7 FINANCIAL HIGHLIGHTS Group share of gross premium written up by 58% to £28.2m (2001 - £17.9m) syndicate 382 gross written premium up 47% to £35.7m (2001 – £24.3m) profit before tax of £1,849,000 (2001 - £913,000) operating profit, assuming long term rate of return, of £2,738,000 (2001 - £1,449,000) combined ratio 91.2% (2001 – 92.6%)

9. 8 GROUP PERFORMANCE June 2002 £’000 Restated June 2001 £’000 Restated Full Year 2001 £’000 Underwriting year 2002 (2001)341298527 Underwriting year 2001 (2000)1,812614540 Underwriting year 2000 & prior (1999 & prior) 1,3017734,166 Investment return included in non-technical account (999)(536)(1,456) Other income1,5851,2542,790 Total income4,0402,4036,567 Expenses(2,191)(1,490)(3,375) Profit before tax1,8499133,192

10. 9 GROUP STATISTICS June 2002 £’000 Restated June 2001 £’000 Restated Full Year 2001 £’000 Gross written premium28,22917,91831,847 Profit before tax1,8499133,192 Operating profit before tax2,7381,4494,648 Shareholders’ funds54,76128,97430,009 Earnings per share - basic - diluted 5.9p 5.8p 1.4p 13.8p 13.7p Net assets per share156p165p171p Net tangible assets per share140p133p138p

11. 10 100% TECHNICAL RESULTJune 2002 £’000 June 2001 £’000 Full Year 2001 £’000 Gross written premium35,68624,31843,165 Net written premium23,93719,83938,170 Net earned premiums20,84915,08430,230 Allocated investment income1,4291,2443,075 Net claims incurred(11,298)(9,198)(16,720) Net operating expenses(8,876)(6,273)(10,655) Change in deferred acquisition costs2,5481,4721,395 Technical result4,6522,3297,325 Claims ratio54.2%61.0%55.3% Expense ratio37.0%31.6%27.9% Combined ratio91.2%92.6%83.2%

12. 11 CASH & INVESTMENTSJune 2002 £’000 June 2001 £’000 Full Year 2001 £’000 GROUP ASSETS Fixed interest10,84010,83411,005 Equity based investments7,5898,8858,209 Deposits2,355248432 GROUP’S SHARE OF SYNDICATE ASSETS Fixed interest13,55710,09210,845 Deposits5,2462675,455 TOTAL39,58730,32635,946 CASH AT BANK Group25,6641,619756 Group’s share of syndicate 2,2926,3572,728 TOTAL27,9567,9763,484

13. 12 INVESTMENT PERFORMANCE 19971998199920002001Average GROUP £ Fixed interest - actual - benchmark (under 5 yrs) N/A 8.04% 7.73% 8.51% 8.11% 6.11% 5.53% 7.55% 7.12% £ Equity - actual - benchmark WM private client growth indicator 17.6% 16.3% 15.1% 14.4% 23.3% 21.3% (1.3%) (5.5%) (10.6%) (13.1%) 8.82% 8.13% US$ Equity - actual - benchmark S&P 500 N/A - N/A - N/A - 5.1% (10.1%) 11.2% (13.0%) 8.15% (11.55%) SYNDICATE US$ Fixed interest - actual - benchmark between 3 mths & 2 years 6.58% 5.21% 6.28% 6.85% 5.11% 6.39% 4.04% 4.73% 1.88% 6.45% 6.18% 7.53% 5.59% 4.48% 7.90% 5.90% 5.14% 5.97%

14. 13 UPDATE ON USE OF NEW FUNDS total group funds available £44m £100m syndicate for next year/80% ownership/50% risk based capital ratio/fund requirement £40m approximately some of cash raised put into funds at Lloyd’s already consideration to be given to balance of cash/other assets/letter of credit in FAL letter of credit available up to £15m use of a letter of credit in FAL would create free funds for further expansion/other opportunities/more capacity purchases/hedge against increase in risk based capital ratio

15. 14 CURRENT AND FUTURE ISSUES FOR BUSINESS overall underwriting environment very encouraging profit not volume focus will be maintained mandatory offer/capacity auctions/approach to future capacity acquisitions inside/outside Lloyd’s – jury still out we will be challenged going forward by Chairman’s Strategy group proposals as part of Lloyd’s, we punch above our weight in the insurance world we need more substance we are considering growth plans e.g. -grow Hardy – possibly through establishing new syndicate -grow by merger/acquisition – open to opportunities