MOODY’S PLACES RATINGS OF MONTPELIER RE HOLDINGS LTD. AND SUBSIDIARY (A3 INSURANCE FINANCIAL STRENGTH) ON REVIEW FOR POSSIBLE DOWNGRADE

New York, September 12, 2005 -- Moody's Investors Service has placed the A3 insurance financial strength rating of Montpelier Reinsurance Ltd. and the Baa2 senior debt rating of Montpelier Reinsurance Holdings Ltd. (NYSE: MRH) under review for possible downgrade. The rating review follows the company's announcement that it estimates the net impact of Hurricane Katrina and the New Orleans flood losses to be in the range of $450 - $675 million. MRH's estimates are based on private industry insured loss estimates, inclusive of offshore energy losses, in the range of $30-40 billion. 
 
According to Moody's, the review will focus on the magnitude of actual losses reported -- both gross and net -- relative to capital and core earnings as well as MRH's ongoing capital management plans. The review will also consider the degree of uncertainty surrounding current loss estimates given the unusual characteristics of Hurricane Katrina as well as the prospect for various disputes including the extent to which retrocessional coverage will respond. 
 
Moody's commented that if losses remain in line with the initial estimate and subject to the strength of its prospective capital adequacy, then the rating review could conclude with a confirmation. 
 
The following ratings were placed under review for possible downgrade:  
 
Montpelier Re Holdings Ltd. -- senior unsecured debt at Baa2, subordinate debt shelf at (P)Baa3, and preferred shelf at (P)Ba1; 
 
MRH Capital Trust I -- capital securities at (P)Baa3; 
 
MRH Capital Trust II -- capital securities at (P)Baa3; 
 
Montpelier Reinsurance Ltd. -- insurance financial strength at A3. 
 
Montpelier Re Holdings Ltd. (NYSE: MRH) is a Bermuda-based, publicly-traded holding company, that provides global specialty reinsurance products through its Bermuda-domiciled, wholly owned reinsurance operating subsidiary, Montpelier Reinsurance Ltd. For the quarter ended June 30, 2005, MRH reported gross written premiums of $276 million and net income of $109 million. As of June 30, 2005, the company reported shareholders' equity of $1.5 billion. 
 
Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations.