exv99w1

Exhibit 99.1

HCC INSURANCE HOLDINGS REPORTS RESULTS
FOR SECOND QUARTER AND FIRST HALF OF 2009

HOUSTON (August 4, 2009) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) today released earnings for the second quarter and six months ended June 30, 2009.

Net earnings for the second quarter of 2009 were $91.6 million, or $0.81 per diluted share, compared to $91.7 million, or $0.79 per diluted share for the second quarter of 2008. Net earnings for the first six months of 2009 were $174.8 million, or $1.54 per diluted share, versus $172.1 million, or $1.48 per diluted share, for the first half of the previous year. Diluted earnings per share benefited from the repurchase of 4.7 million shares of the Company’s common stock in 2008 and the first quarter of 2009.

“We completed another excellent quarter in a very challenging environment. The industry is in transformation. We believe our strong financial position and outstanding underwriting capabilities position HCC extremely well in this environment,” HCC President and Chief Executive Officer John N. Molbeck, Jr. said.

The GAAP combined ratio was 83.8% in the second quarter of 2009, compared to 84.1% in the second quarter of 2008, and 85.5% in the first six months of 2009, compared to 83.9% in the corresponding period of 2008.

Book value per share increased to $25.01 at June 30, 2009, up 7.5% since December 31, 2008. The Company’s annualized return on average equity for the second quarter of 2009 was 13.3%.

“Our accident year combined ratio continues at a very satisfactory 87.0% for the quarter and 86.7% for the six months,” said Mr. Molbeck. During the second quarter of 2009, HCC had net positive reserve development of $16.0 million pretax compared to $9.3 million in 2008. In the first six months of 2009, the Company recorded $11.3 million pretax of net positive reserve development, compared to $14.4 million for the first six months of 2008.

The 2009 positive reserve development primarily resulted from a reduction in reserves on 2005 hurricane losses, as well as HCC’s aviation and U.K. professional indemnity businesses for the 2001-2006 underwriting years. The redundant development in 2008 primarily resulted from U.K. professional indemnity and London market account businesses for the 2005 and prior underwriting years.

Gross written premium of HCC’s insurance company subsidiaries for the second quarter of 2009 was $681.3 million, compared to $691.6 million for the same quarter of 2008. Net written premium decreased to $543.4 million for the second quarter of 2009, compared to $567.2 million during the 2008 second quarter. Net earned premium decreased to $502.0 million in the second quarter of 2009, compared to $506.6 million in the same quarter of 2008. Gross written premium reflects growth in the diversified financial products and London market account lines of business, as well as new premium from HCC’s acquisitions during 2008. The 2009 periods also reflect reductions resulting from a discontinuation of both an assumed quota share agreement and the U.K. motor business in 2008.

Net earned premium of $1.0 billion for HCC’s insurance company subsidiaries was relatively flat for the first six months of 2009 compared to the first six months of 2008. During the first half of 2009, gross written premium of $1.3 billion and net written premium of $1.0 billion also remained essentially flat compared to the first half of 2008.

“Our results for the first six months were stable and strong, which is the result of acquisitions of teams and businesses that have complemented our already diverse portfolio of specialty businesses,” Mr. Molbeck said.

Total revenue in the second quarter of 2009 decreased to $581.1 million, from $593.9 million in the same quarter of 2008. In addition to the lower net earned premium in 2009, the 2008 period included a gain from the sale of a strategic investment. Total revenue was $1.2 billion for the first six months of 2009 and 2008.

Fee and commission income was $56.4 million in the first half of 2009, compared to $61.8 million in the same period of 2008.

Investment income increased slightly during the second quarter of 2009 to $48.4 million, compared to $47.2 million during the second quarter of 2008, with lower market interest rates on a growing investment portfolio. On a year-to-date basis, investment income declined slightly to $93.6 million in 2009 from $94.9 million in 2008.

HCC’s fixed income securities generated $47.5 million in investment income in the 2009 second quarter, versus $44.4 million in the 2008 second quarter. Investment income from fixed income securities was $92.9 million for the first half of 2009, compared to $85.3 million for the first half of 2008, as the Company’s fixed income securities increased 12% from $4.1 billion at June 30, 2008 to $4.6 billion at June 30, 2009. HCC’s income from short-term investments was $1.7 million in the second quarter of 2009, compared to $5.0 million in the second quarter of 2008 and $3.5 million in the first six months of 2009, compared to $13.6 million in the first six months of 2008. The decreases were due to lower market rates.

As of June 30, 2009, HCC’s fixed income securities portfolio had an average rating of AA+, an average duration of 5.0 years and an average tax equivalent yield of 5.1%. The

average duration of the total investment portfolio, including short-term investments, was 4.4 years at June 30, 2009.

Pretax other operating income was $5.5 million for the 2009 second quarter, compared to $10.9 million for the same period in 2008. Pretax other operating income was $28.4 million for the first half of 2009, compared to $6.0 million for the same period in 2008. The 2009 year-to-date period includes $20.0 million pretax from the termination of a reinsurance agreement.

On July 16, 2009, HCC commuted an assumed reinsurance contract with a cedent for a payment of $43.9 million. The commutation will be recorded in the third quarter. There will be no material income effect as the result of the commutation. It will, however, impact the paid loss ratio and cash flow from operations for the remainder of the year.

As of June 30, 2009, total investments increased to $5.2 billion, total assets were $8.9 billion, shareholders’ equity was $2.8 billion and the Company’s debt to total capital ratio was 13.4%, compared to $5.0 billion, $8.6 billion, $2.7 billion and 13.6%, respectively, as of March 31, 2009.

As previously announced, William T. “Tobin” Whamond will assume duties as Chief Financial Officer effective August 11, 2009. Ed Ellis will remain with HCC through the end of the year to further assist Mr. Whamond, at which point Mr. Ellis is retiring. “In the months since Tobin’s hiring, they have worked diligently to ensure a smooth handoff of the CFO duties. I expect the transition to be seamless,” said Mr. Molbeck.

For further information about HCC’s quarter and year-to-date financial results, the supplemental financial schedules are accessible on the Company’s website at http://www.hcc.com, as well as directly in the Investor Relations section of HCC’s website at http://ir.hcc.com. The second quarter 2009 supplemental financial schedules are more comprehensive than the Company has previously provided in an effort to provide shareholders with a greater understanding of HCC’s business.

(Note: If clicking on the above links does not open in a new web page, please cut and paste the above urls into your browser’s address bar.)

HCC will hold an open conference call beginning at 8:00 a.m. Central Daylight Time on Wednesday, August 5. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-1061. In addition, there will be a live webcast available on a listen-only basis that can be accessed through the HCC website at http://www.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, November 6, 2009.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. (HCC) is a leading international specialty insurance group with operations across the United States and in Bermuda, Ireland, Spain and the United Kingdom. HCC has assets of $8.9 billion, shareholders’ equity of $2.8 billion and is rated AA (Very Strong) by Standard & Poor’s

and AA (Very Strong) by Fitch Ratings. In addition, HCC’s major domestic insurance companies are rated A+ (Superior) by A.M. Best Company.

For more information about HCC, please visit http://www.hcc.com.


Contact:		Jen Browne, Investor Relations Coordinator HCC Insurance Holdings, Inc. Telephone: (713) 996-1144

Forward-looking statements contained in this press release are made under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission.

* * * * *

HCC Insurance Holdings, Inc. and Subsidiaries
Financial Highlights
(Unaudited, in thousands except per share data)


	Six months ended June 30,						Three months ended June 30,
	2009			2008			2009			2008
				(as adjusted) (a)						(as adjusted) (a)
Gross written premium	$	1,283,704		$	1,274,592		$	681,317		$	691,593
Net written premium		1,034,602			1,060,797			543,352			567,150
Net earned premium		1,004,366			1,000,156			501,978			506,610
Fee and commission income		56,426			61,763			26,132			30,764
Net investment income		93,629			94,870			48,411			47,249
Other operating income		28,419			6,001			5,523			10,947
Total revenue		1,181,874			1,161,238			581,136			593,850
Net earnings		174,755			172,130			91,585			91,675
Earnings per share (diluted)	$	1.54		$	1.48		$	0.81		$	0.79
Weighted-average shares outstanding (diluted) (millions)		112.9			116.2			112.5			116.0
GAAP net loss ratio		60.5	%		59.6	%		58.3	%		59.8	%
GAAP combined ratio		85.5	%		83.9	%		83.8	%		84.1	%
Paid loss ratio		52.3	%		50.7	%		50.6	%		50.5	%


	June 30,			December 31,
	2009			2008
				(as adjusted) (a)
Total investments	$	5,227,506		$	4,804,283
Total assets		8,876,261			8,332,000
Shareholders’ equity		2,809,465			2,640,023
Debt to total capital		13.4	%		11.5	%
Book value per share	$	25.01		$	23.27


(a)		Certain amounts changed due to 1/1/2009 adoption of new accounting standards.

S-1

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)


	June 30,			December 31,
	2009			2008
				(as adjusted) (a)
ASSETS

Investments:
Fixed income securities — available for sale, at fair value	$	4,456,674		$	4,133,165
Fixed income securities — held to maturity, at amortized cost		107,145			123,553
Short-term investments		659,021			497,477
Other investments		4,666			50,088

Total investments		5,227,506			4,804,283
Cash		35,614			27,347
Restricted cash and cash investments		206,065			174,905
Premium, claims and other receivables		789,803			770,823
Reinsurance recoverables		1,082,713			1,054,950
Ceded unearned premium		261,801			234,375
Ceded life and annuity benefits		63,129			64,235
Deferred policy acquisition costs		204,026			188,652
Goodwill		847,792			858,849
Other assets		157,812			153,581

Total assets	$	8,876,261		$	8,332,000


LIABILITIES

Loss and loss adjustment expense payable	$	3,566,263		$	3,415,230
Life and annuity policy benefits		63,129			64,235
Reinsurance balances payable		158,222			122,189
Unearned premium		1,062,456			977,426
Deferred ceding commissions		66,606			63,123
Premium and claims payable		375,291			405,287
Notes payable		434,682			343,649
Accounts payable and accrued liabilities		340,147			300,838

Total liabilities		6,066,796			5,691,977


SHAREHOLDERS’ EQUITY

Common stock		116,992			116,457
Additional paid-in capital		895,290			881,534
Retained earnings		1,828,795			1,677,831
Accumulated other comprehensive income		67,187			27,536
Treasury stock		(98,799	)		(63,335	)

Total shareholders’ equity		2,809,465			2,640,023

Total liabilities and shareholders’ equity	$	8,876,261		$	8,332,000


(a)		Certain amounts changed due to 1/1/2009 adoption of new accounting standards.

S-2

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited, in thousands except per share data)


	Six months ended June 30,						Three months ended June 30,
	2009			2008			2009			2008
				(as adjusted) (a)						(as adjusted) (a)
REVENUE

Net earned premium	$	1,004,366		$	1,000,156		$	501,978		$	506,610
Fee and commission income		56,426			61,763			26,132			30,764
Net investment income		93,629			94,870			48,411			47,249
Other operating income		28,419			6,001			5,523			10,947
Net realized investment gain (loss)		3,988			47			933			(121	)
Other-than-temporary impairment loss:
Total loss		(5,709	)		(1,599	)		(2,596	)		(1,599	)
Portion recognized in equity, before tax		755			—			755			—

Net loss recognized in earnings		(4,954	)		(1,599	)		(1,841	)		(1,599	)


Total revenue		1,181,874			1,161,238			581,136			593,850


EXPENSE

Loss and loss adjustment expense, net		608,136			595,927			292,570			302,901
Policy acquisition costs, net		178,940			188,113			90,248			95,845
Other operating expense		130,524			116,718			61,526			57,514
Interest expense		8,267			9,779			3,628			4,826


Total expense		925,867			910,537			447,972			461,086


Earnings before income tax expense		256,007			250,701			133,164			132,764
Income tax expense		81,252			78,571			41,579			41,089


Net earnings	$	174,755		$	172,130		$	91,585		$	91,675


Basic earnings per share data:
Net earnings per share	$	1.55		$	1.49		$	0.81		$	0.79


Weighted-average shares outstanding (millions)		112.3			115.3			111.8			115.5


Diluted earnings per share data:
Net earnings per share	$	1.54		$	1.48		$	0.81		$	0.79


Weighted-average shares outstanding (millions)		112.9			116.2			112.5			116.0


Cash dividends declared, per share	$	0.250		$	0.220		$	0.125		$	0.110


(a)		Certain amounts changed due to 1/1/2009 adoption of new accounting standards.

S-3

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)


	Six months ended June 30,
	2009			2008
				(as adjusted) (a)
Operating activities:
Net earnings	$	174,755		$	172,130
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables		(14,383	)		(43,624	)
Change in reinsurance recoverables		(24,117	)		(73,812	)
Change in ceded unearned premium		(25,841	)		9,052
Change in loss and loss adjustment expense payable		97,956			219,858
Change in reinsurance balances payable		35,985			(9,945	)
Change in unearned premium		67,388			55,022
Change in premium and claims payable, net of restricted cash		(59,802	)		(73,868	)
Change in accounts payable and accrued liabilities		7,090			(72,911	)
Change in trading portfolio		—			42,574
Stock-based compensation expense		8,906			6,797
Depreciation and amortization expense		7,652			6,824
Other, net		(13,413	)		(7,658	)

Cash provided by operating activities		262,176			230,439


Investing activities:
Sales of available for sale fixed income securities		240,716			236,878
Maturity or call of available for sale fixed income securities		119,498			182,410
Maturity or call of held to maturity fixed income securities		85,991			—
Cost of available for sale fixed income securities acquired		(570,529	)		(900,693	)
Cost of held to maturity fixed income securities acquired		(59,580	)		—
Cost of other investments acquired		—			(25,000	)
Change in short-term investments		(160,119	)		256,564
Proceeds from sales of strategic and other investments		97,407			53,812
Payments for purchase of businesses, net of cash received		(32,966	)		(72,369	)
Proceeds from sale of assets of business		5,500			—
Other, net		(8,916	)		(4,685	)

Cash used by investing activities		(282,998	)		(273,083	)


Financing activities:
Advances on line of credit		105,000			75,000
Payments on line of credit and notes payable		(15,032	)		(30,000	)
Sale of common stock		5,385			9,868
Purchase of common stock		(35,464	)		—
Dividends paid		(28,204	)		(25,340	)
Other, net		(2,596	)		1,110

Cash provided by financing activities		29,089			30,638


Net increase (decrease) in cash		8,267			(12,006	)

Cash at beginning of period		27,347			39,135


Cash at end of period	$	35,614		$	27,129


(a)		Certain amounts changed due to 1/1/2009 adoption of new accounting standards.

S-4

HCC Insurance Holdings, Inc. and Subsidiaries
Gross Written Premium
(Unaudited, in thousands)


	Six months ended June 30,								Three months ended June 30,
	2009			2008		Change			2009			2008		Change
Diversified financial products
D&O (1)	$	232,710		$	187,156		24	%	$	138,426		$	118,121		17	%
E&O (2)		127,857			134,041		(5	)		65,498			66,933		(2	)
Other Professional Liability		44,581			28,021		59			18,807			16,219		16
U.S. Surety & Credit		96,339			90,343		7			52,206			49,802		5
International Surety & Credit		39,575			43,745		(10	)		21,013			20,867		1

		541,062			483,306		12			295,950			271,942		9


Group life, accident & health
Medical Stop-loss		315,844			310,886		2			156,358			154,868		1
Other Medical		63,459			67,235		(6	)		31,853			32,541		(2	)
Other		46,026			40,163		15			20,125			20,341		(1	)

		425,329			418,284		2			208,336			207,750		—


Aviation		83,751			96,629		(13	)		41,799			51,801		(19	)

London market account
Energy		77,632			69,454		12			62,818			50,226		25
Other		56,589			53,344		6			26,654			31,636		(16	)

		134,221			122,798		9			89,472			81,862		9


Other specialty lines
Public Risk		35,877			21,293		68			15,943			9,728		64
HCC Lloyds		23,613			46,425		(49	)		12,391			25,560		(52	)
Other		39,861			81,218		(51	)		17,440			38,305		(54	)

		99,351			148,936		(33	)		45,774			73,593		(38	)


Discontinued lines		(10	)		4,639	nm				(14	)		4,645	nm


Total	$	1,283,704		$	1,274,592		1	%	$	681,317		$	691,593		(1	)%


(1)		Includes D&O and related professional liability insurance underwritten by HCCG and D&O insurance for non-profit organizations underwritten by PIA.

(2)		Includes Miscellaneous E&O, Architects and Engineers E&O, and Diversified Financial Products insurance underwritten by PIA, as well as E&O insurance underwritten in the United Kingdom and Spain.

nm		— Not meaningful comparison

S-5

HCC Insurance Holdings, Inc. and Subsidiaries
Net Written Premium
(Unaudited, in thousands)


	Six months ended June 30,								Three months ended June 30,
	2009			2008		Change			2009			2008		Change
Diversified financial products
D&O (1)	$	167,141		$	137,319		22	%	$	99,674		$	87,202		14	%
E&O (2)		111,358			122,393		(9	)		56,706			60,887		(7	)
Other Professional Liability		35,434			20,354		74			13,602			11,309		20
U.S. Surety & Credit		91,794			88,546		4			49,392			48,732		1
International Surety & Credit		35,135			38,534		(9	)		18,125			18,515		(2	)

		440,862			407,146		8			237,499			226,645		5


Group life, accident & health
Medical Stop-loss		315,842			310,885		2			156,358			154,868		1
Other Medical		63,459			67,235		(6	)		31,853			32,541		(2	)
Other		15,370			21,709		(29	)		7,404			10,045		(26	)

		394,671			399,829		(1	)		195,615			197,454		(1	)


Aviation		60,876			69,880		(13	)		30,265			37,534		(19	)

London market account
Energy		47,735			50,165		(5	)		41,558			36,926		13
Other		32,806			29,931		10			12,589			14,142		(11	)

		80,541			80,096		1			54,147			51,068		6


Other specialty lines
Public Risk		27,851			14,847		88			12,735			6,691		90
HCC Lloyds		18,917			41,109		(54	)		9,236			22,731		(59	)
Other		10,894			43,205		(75	)		3,869			20,336		(81	)

		57,662			99,161		(42	)		25,840			49,758		(48	)


Discontinued lines		(10	)		4,685	nm				(14	)		4,691	nm

Total	$	1,034,602		$	1,060,797		(2	)%	$	543,352		$	567,150		(4	)%


(1)		Includes D&O and related professional liability insurance underwritten by HCCG and D&O insurance for non-profit organizations underwritten by PIA.

(2)		Includes Miscellaneous E&O, Architects and Engineers E&O, and Diversified Financial Products insurance underwritten by PIA, as well as E&O insurance underwritten in the United Kingdom and Spain.

nm		— Not meaningful comparison

S-6

HCC Insurance Holdings, Inc. and Subsidiaries
Net Earned Premium
(Unaudited, in thousands)


	Six months ended June 30,								Three months ended June 30,
	2009			2008		Change			2009			2008		Change
Diversified financial products
D&O (1)	$	172,488		$	151,001		14	%	$	89,686		$	76,236		18	%
E&O (2)		118,281			108,479		9			58,877			53,937		9
Other Professional Liability		20,768			14,638		42			9,791			8,660		13
U.S. Surety & Credit		89,727			82,144		9			45,235			41,920		8
International Surety & Credit		32,651			33,821		(3	)		16,242			17,153		(5	)


		433,915			390,083		11			219,831			197,906		11


Group life, accident & health
Medical Stop-loss		315,842			310,908		2			156,359			154,890		1
Other Medical		66,229			57,140		16			33,176			30,683		8
Other		16,100			19,752		(18	)		7,548			9,781		(23	)


		398,171			387,800		3			197,083			195,354		1


Aviation		65,461			69,712		(6	)		32,647			34,719		(6	)

London market account
Energy		22,439			30,423		(26	)		13,204			13,704		(4	)
Other		26,940			22,972		17			12,501			12,601		(1	)


		49,379			53,395		(8	)		25,705			26,305		(2	)


Other specialty lines
Public Risk		17,807			12,265		45			9,187			6,237		47
HCC Lloyds		20,940			33,274		(37	)		10,150			17,434		(42	)
Other		18,703			48,887		(62	)		7,389			23,909		(69	)


		57,450			94,426		(39	)		26,726			47,580		(44	)


Discontinued lines		(10	)		4,740	nm				(14	)		4,746	nm


Total	$	1,004,366		$	1,000,156		—	%	$	501,978		$	506,610		(1	)%


(1)		Includes D&O and related professional liability insurance underwritten by HCCG and D&O insurance for non-profit organizations underwritten by PIA.

(2)		Includes Miscellaneous E&O, Architects and Engineers E&O, and Diversified Financial Products insurance underwritten by PIA, as well as E&O insurance underwritten in the United Kingdom and Spain.

nm		— Not meaningful comparison

S-7

HCC Insurance Holdings, Inc. and Subsidiaries
Net Investment Income and Unrealized Gain (Loss)
(Unaudited, in thousands)


	Six months ended June 30,						Three months ended June 30,
	2009			2008			2009			2008

Sources of net investment income:

Fixed income securities
Taxable	$	52,099		$	47,322		$	26,994		$	24,870
Exempt from U.S. income tax		40,813			37,974			20,480			19,502

Total fixed income securities		92,912			85,296			47,474			44,372
Short-term investments		3,479			13,571			1,685			4,979
Alternative investments		(958	)		(2,414	)		4			(1,209	)
Other investments		—			498			—			231

Total investment income		95,433			96,951			49,163			48,373

Investment expense		(1,804	)		(2,081	)		(752	)		(1,124	)


Net investment income	$	93,629		$	94,870		$	48,411		$	47,249


Unrealized gain (loss) on available for sale fixed income securities:

Increase (decrease) in unrealized gain/loss for period, before tax	$	58,039		$	(59,115	)	$	12,688		$	(60,229	)


Unrealized gain at June 30, 2009	$	72,665


Unrealized gain at March 31, 2009	$	59,977


Unrealized gain at December 31, 2008	$	14,626

S-8

HCC Insurance Holdings, Inc. and Subsidiaries
Net Loss Ratios
(Unaudited, in thousands)


	Six months ended						Six months ended					Twelve months ended
	June 30, 2009						June 30, 2008					December 31, 2008
	Net Earned			Loss			Net Earned		Loss			Net Earned		Loss
	Premium			Ratio			Premium		Ratio			Premium		Ratio
Diversified financial products
D&O (1)	$	172,488			62.1	%	$	151,001		56.6	%	$	312,135		59.0	%
E&O (2)		118,281			49.5			108,479		48.7			227,666		50.0
Other Professional Liability		20,768			47.7			14,638		39.1			31,754		40.2
U.S. Surety & Credit		89,727			30.9			82,144		23.8			167,914		23.7
International Surety & Credit		32,651			55.4			33,821		43.9			66,135		56.1

		433,915			51.0			390,083		45.8			805,604		48.1


Group life, accident & health
Medical Stop-loss		315,842			73.5			310,908		74.2			616,900		73.1
Other Medical		66,229			78.7			57,140		78.4			121,865		80.9
Other		16,100			58.4			19,752		61.1			38,503		47.1

		398,171			73.8			387,800		74.2			777,268		73.1


Aviation		65,461			57.0			69,712		62.2			139,838		62.6

London market account
Energy		22,439			7.7			30,423		22.7			57,262		42.6
Other		26,940			42.6			22,972		52.4			49,595		50.8

		49,379			26.7			53,395		35.5			106,857		46.4


Other specialty lines
Public Risk		17,807			66.4			12,265		65.9			25,600		72.3
HCC Lloyds		20,940			65.1			33,274		73.7			62,126		78.3
Other		18,703			91.2			48,887		64.1			85,723		57.6

		57,450			74.0			94,426		67.7			173,449		67.2


Discontinued lines		(10	)	nm				4,740	nm				4,758	nm

Total	$	1,004,366			60.5	%	$	1,000,156		59.6	%	$	2,007,774		60.4	%


(1)		Includes D&O and related professional liability insurance underwritten by HCCG and D&O insurance for non-profit organizations underwritten by PIA.

(2)		Includes Miscellaneous E&O, Architects and Engineers E&O, and Diversified Financial Products insurance underwritten by PIA, as well as E&O insurance underwritten in the United Kingdom and Spain.

nm		— Not meaningful comparison

S-9

HCC Insurance Holdings, Inc. and Subsidiaries
Investments — Selected Disclosures
June 30, 2009
(Unaudited, in thousands)


			% of			Investment			Average
	Fair Value		Portfolio			Grade			Rating

Total Portfolio of Fixed Income Securities	$	4,564,222		100.0	%		99	%	AA+


Residential Mortgage-Backed Securities and Collateralized Mortgage Obligations:

Agency	$	838,722		18.4	%		100	%	AAA

Non-Agency
Prime		55,902		1.2			65	%	AA
Alt A		5,729		0.1			67	%		A
Subprime		1,532		0.0			79	%	AA-

Total Residential MBS/CMO	$	901,885		19.7	%		97	%	AAA


Commercial Mortgage-Backed Securities	$	141,720		3.1	%		100	%	AAA


Asset-Backed Securities:
Auto	$	40,631		0.9	%		100	%	AA+
Credit Card		9,790		0.2			100	%	AAA
Other		6,853		0.2			100	%	AA

Total Asset-Backed Securities	$	57,274		1.3	%		100	%	AA


Agency Securities:
Total Direct Obligations of U.S. Agencies	$	58,355		1.3	%		100	%	AAA


U.S. Corporate Bonds:
Non-Financial	$	397,692		8.7	%		100	%		A+

Financial	$	192,611		4.2	%		100	%		A+


Municipal Bonds:	$	2,087,287		45.8	%		99	%	AA

Insurance Enhanced	$	1,244,800		27.3	%		98	%	AA

Insured — Underlying Ratings	$	1,244,800		27.3	%		98	%	AA

Non-Insured	$	842,487		18.5	%		100	%	AA+


Foreign Bonds	$	464,246		10.2	%		100	%	AAA

Notes:

The selected disclosures above do not include all classes of investments in the total portfolio of fixed income securities. There are no CDOs/CLOs in the portfolio.

S-10

HCC Insurance Holdings, Inc. and Subsidiaries
Subprime Liability Exposure
June 30, 2009

•		As of June 30, the Company had 68 “non-Side A only” D&O, E&O and Fiduciary Liability claims and 17 “Side A only” D&O claims relating to subprime issues.

•		Of the D&O claims reported, three are on primary policies with gross policy limits totaling $12 million. The remaining D&O claims are on excess policies.

•		The average policy limit on the “non-Side A only” claims is $12.9 million gross and $8.8 million net, with an average attachment point of $86 million.

•		The average policy limit for “Side A only” claims is $14.2 million gross and $11.3 million net, with an average attachment point of $159 million.

•		Based upon the Company’s present knowledge, HCC believes the ultimate subprime related losses will be contained within the current overall reserves for D&O, E&O and Fiduciary Liability business.

S-11