8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
August 3, 2010

HCC INSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13790	76-0336636
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

13403 Northwest Freeway Houston, Texas	77040-6094
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 690-7300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On August 3, 2010, HCC Insurance Holdings, Inc. announced its results for the Second Quarter of 2010. A press release setting forth the announcement is furnished as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

No.	Exhibit
99.1	Earnings Press Release dated August 3, 2010

     The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HCC INSURANCE HOLDINGS, INC.
Date: August 3, 2010	By:	/s/ Randy D. Rinicella
		Randy D. Rinicella,
		Sr. Vice President, General Counsel & Secretary

EXHIBIT INDEX

No.	Exhibit
99.1	Earnings Press Release dated August 3, 2010

EX-99.1

Exhibit 99.1

HCC INSURANCE HOLDINGS REPORTS EARNINGS
FOR THE SECOND QUARTER OF 2010

HOUSTON (August 3, 2010) . . .

HCC Insurance Holdings, Inc. (NYSE: HCC) today released results for its second quarter ended June 30, 2010.

Net earnings for the second quarter of 2010 were $83.4 million, compared with $91.6 million during the second quarter of 2009. Net earnings per diluted share were $0.72 for the second quarter of 2010, compared to $0.81 for the same quarter of 2009. Net earnings for the first six months of 2010 were $154.7 million, or $1.34 per diluted share, versus $174.8 million, or $1.54 per diluted share, for the first half of the previous year. The Company repurchased 50,150 shares of common stock in the second quarter of 2010 at an average price of $24.38 per share.

The GAAP combined ratio for the second quarter of 2010 was 85.6%, compared to 83.8% for the same quarter of 2009, and 88.0% in the first half of 2010, compared to 85.5% in the corresponding period of 2009.

The accident year combined ratio was 85.6% for the second quarter of 2010 and 87.5% for the first half of 2010. The accident year combined ratio for the first half of 2010 includes 2.0 percentage points for the catastrophes that occurred in the first quarter. Book value per share increased to $27.78 at June 30, 2010, compared to $26.58 at December 31, 2009. The Company’s annualized return on average equity for the second quarter of 2010 was 10.6%.

“We continue to exercise underwriting discipline and strategically buy facultative reinsurance. We are very pleased with the performance of our Specialty businesses in the second quarter and year to date, as well as our double digit return on equity,” John N. Molbeck, Jr., HCC President and Chief Executive Officer said.

For the second quarter of 2010, the gross written premium of HCC’s insurance company subsidiaries increased 1.5% to $691.6 million, compared to $681.3 million for the same quarter of 2009. Net written premium increased to $546.8 million in 2010, compared with net written premium of $543.4 million in 2009. Net earned premium increased to $506.4 million for the second quarter of 2010, compared to $502.0 million for the same quarter of 2009.

During the first half of 2010, gross written premium was $1.3 billion, net written premium was $1.0 billion, and net earned premium was $1.0 billion, representing a slight

increase in comparison to the first half of 2009.

HCC had minimal reserve development in the second quarter and the first half of 2010, compared to $16.0 million and $11.3 million of net redundant development in the second quarter and the first half of 2009, respectively.

Investment income increased during the second quarter of 2010 to $50.2 million, compared to $48.4 million a year earlier, reflecting an increased amount of invested assets, offset by lower rates on short-term investments. On a year-to-date basis, investment income increased to $99.5 million in 2010 from $93.6 million in 2009. The Company’s fixed income investments increased 11% from June 30, 2009 to $5.1 billion at June 30, 2010. As of June 30, 2010, HCC’s fixed income securities portfolio had an average rating of AA+, an average duration of 4.8 years and an average tax equivalent yield of 5.0%. HCC recognized no other-than-temporary impairment losses on the portfolio in the first six months of 2010.

The Company’s liquidity position remains strong and its shareholders’ equity was a record $3.2 billion at June 30, 2010. The Company held $560.3 million of cash and short-term investments at the end of the quarter. HCC has a $575.0 million revolving loan facility with $553.4 million of available capacity at June 30, 2010. The Company generated $139.3 million of cash flow from operating activities in the first six months of 2010, compared to $262.2 million in the first six months of 2009.

As of June 30, 2010, total investments were $5.6 billion, total assets were $9.0 billion, and the Company’s debt to total capital ratio was 8.5%.

For further information about HCC’s 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.

(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 4. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-0161. In addition, there will be a live webcast available on a listen-only basis that can be accessed through the HCC website at www.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, November 5, 2010.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading international specialty insurance group with offices across the United States and in the United Kingdom, Spain and Ireland. As of June 30, 2010, HCC had assets of $9.0 billion and shareholders’ equity of $3.2 billion. HCC’s major domestic and international insurance companies have a financial strength rating of “AA (Very Strong)” from Standard & Poor’s Corporation. HCC’s major domestic insurance companies have a

2

financial strength rating of “AA (Very Strong)” from Fitch Ratings, “A1 (Good Security)” from Moody’s Investors Service, Inc., and “A+ (Superior)” by A.M. Best Company, Inc.

For more information, visit our website at www.hcc.com.

Contact:  Jonathan Lee, HCC Director of Investor Relations
Telephone: (713) 996-1156

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.

* * * *

3

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

	Six months ended						Three months ended
	June 30,						June 30,
	2010			2009			2010			2009
Gross written premium	$	1,314,074		$	1,283,704		$	691,578		$	681,317
Net written premium		1,045,053			1,034,602			546,802			543,352
Net earned premium		1,015,972			1,004,366			506,385			501,978
Fee and commission income		40,168			56,426			19,175			26,132
Net investment income		99,466			93,629			50,217			48,411
Other operating income		11,993			28,419			2,087			5,523
Total revenue		1,174,439			1,181,874			580,179			581,136
Net earnings		154,734			174,755			83,380			91,585
Earnings per share (diluted)	$	1.34		$	1.54		$	0.72		$	0.81
Weighted-average shares outstanding (millions)		114.1			112.9			114.2			112.5
GAAP net loss ratio		61.6	%		60.5	%		59.0	%		58.3	%
GAAP combined ratio		88.0	%		85.5	%		85.6	%		83.8	%
Paid loss ratio		56.4	%		52.3	%		52.5	%		50.6	%

	June 30,			December 31,
	2010			2009
Total investments	$	5,552,164		$	5,456,229
Total assets		9,046,419			8,834,391
Shareholders’ equity		3,198,850			3,031,183
Debt to total capital ratio		8.5	%		9.0	%
Book value per share	$	27.78		$	26.58

S-1

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

	June 30,			December 31,
	2010			2009
ASSETS
Investments:
Fixed income securities — available for sale, at fair value	$	4,903,206		$	4,538,073
Fixed income securities — held to maturity, at amortized cost		172,349			102,792
Short-term investments		476,176			810,673
Other investments		433			4,691
Total investments		5,552,164			5,456,229
Cash		84,162			129,460
Restricted cash and cash investments		159,756			146,133
Premium, claims and other receivables		695,670			600,332
Reinsurance recoverables		1,054,659			1,016,411
Ceded unearned premium		271,783			270,436
Ceded life and annuity benefits		59,480			61,313
Deferred policy acquisition costs		216,988			208,463
Goodwill		821,729			822,006
Other assets		130,028			123,608
Total assets	$	9,046,419		$	8,834,391
LIABILITIES
Loss and loss adjustment expense payable	$	3,528,606		$	3,492,309
Life and annuity policy benefits		59,480			61,313
Reinsurance balances payable		183,631			182,661
Unearned premium		1,069,355			1,044,747
Deferred ceding commissions		68,657			71,595
Premium and claims payable		166,675			154,596
Notes payable		298,560			298,483
Accounts payable and accrued liabilities		472,605			497,504
Total liabilities		5,847,569			5,803,208
SHAREHOLDERS’ EQUITY
Common stock		119,867			118,724
Additional paid-in capital		930,276			914,339
Retained earnings		2,101,047			1,977,254
Accumulated other comprehensive income		147,682			119,665
Treasury stock		(100,022	)		(98,799	)
Total shareholders’ equity		3,198,850			3,031,183
Total liabilities and shareholders’ equity	$	9,046,419		$	8,834,391

S-2

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

	Six months ended					Three months ended
	June 30,					June 30,
	2010		2009			2010		2009
REVENUE
Net earned premium	$	1,015,972	$	1,004,366		$	506,385	$	501,978
Fee and commission income		40,168		56,426			19,175		26,132
Net investment income		99,466		93,629			50,217		48,411
Other operating income		11,993		28,419			2,087		5,523
Net realized investment gain		6,840		3,988			2,315		933
Other-than-temporary impairment loss
Total loss		—		(5,709	)		—		(2,596	)
Portion recognized in equity, before tax		—		755			—		755
Net loss recognized in earnings		—		(4,954	)		—		(1,841	)
Total revenue		1,174,439		1,181,874			580,179		581,136
EXPENSE
Loss and loss adjustment expense, net		625,507		608,136			298,986		292,570
Policy acquisition costs, net		186,344		178,940			93,688		90,248
Other operating expense		129,183		130,524			62,515		61,526
Interest expense		10,627		8,267			5,237		3,628
Total expense		951,661		925,867			460,426		447,972
Earnings before income tax expense		222,778		256,007			119,753		133,164
Income tax expense		68,044		81,252			36,373		41,579
Net earnings	$	154,734	$	174,755		$	83,380	$	91,585
Basic earnings per share data:
Net earnings per share	$	1.34	$	1.55		$	0.72	$	0.81
Weighted-average shares outstanding (millions)		113.8		112.3			113.9		111.8
Diluted earnings per share data:
Net earnings per share	$	1.34	$	1.54		$	0.72	$	0.81
Weighted-average shares outstanding (millions)		114.1		112.9			114.2		112.5
Cash dividends declared, per share	$	0.270	$	0.250		$	0.135	$	0.125

S-3

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

	Six months ended
	June 30,
	2010			2009
Operating activities
Net earnings	$	154,734		$	174,755
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables		(79,735	)		(14,383	)
Change in reinsurance recoverables		(60,013	)		(24,117	)
Change in ceded unearned premium		(4,630	)		(25,841	)
Change in loss and loss adjustment expense payable		99,370			97,956
Change in reinsurance balances payable		3,253			35,985
Change in unearned premium		32,541			67,388
Change in premium and claims payable, net of restricted cash		9,127			(59,802	)
Change in accounts payable and accrued liabilities		(15,389	)		7,090
Stock-based compensation expense		6,937			8,906
Depreciation and amortization expense		8,249			7,652
(Gain) loss on investments		(7,329	)		1,924
Other, net		(7,789	)		(15,337	)
Cash provided by operating activities		139,326			262,176
Investing activities
Sales of available for sale fixed income securities		133,856			199,744
Maturity or call of available for sale fixed income securities		260,053			160,470
Maturity or call of held to maturity fixed income securities		25,253			85,991
Cost of available for sale fixed income securities acquired		(703,341	)		(570,529	)
Cost of held to maturity fixed income securities acquired		(96,383	)		(59,580	)
Change in short-term investments		320,927			(160,119	)
Proceeds from sales of strategic and other investments		4,577			97,407
Payments for purchase of businesses, net of cash received		(36,348	)		(32,966	)
Proceeds from sale of subsidiaries		15,278			5,500
Other, net		(9,405	)		(8,916	)
Cash used by investing activities		(85,533	)		(282,998	)
Financing activities
Advances on line of credit		—			105,000
Payments on line of credit		—			(15,032	)
Payments on convertible notes		(64,472	)		—
Sale of common stock		10,143			5,385
Purchase of common stock		(472	)		(35,464	)
Dividends paid		(30,983	)		(28,204	)
Other, net		(13,307	)		(2,596	)
Cash provided (used) by financing activities		(99,091	)		29,089
Net increase (decrease) in cash		(45,298	)		8,267
Cash at beginning of year		129,460			27,347
Cash at end of period	$	84,162		$	35,614

S-4

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

	Six months ended June 30,								Three months ended June 30,
	2010		2009			Change			2010			2009			Change
Diversified financial products
D&O (1)	$	219,740	$	232,710			(6	)%	$	135,572		$	138,426			(2	)%
E&O (2)		113,499		127,857			(11	)		57,151			65,498			(13	)
Other		32,339		44,581			(27	)		15,927			18,807			(15	)
U.S. Surety & Credit		117,170		96,339			22			63,149			52,206			21
International Surety & Credit		40,245		39,575			2			18,940			21,013			(10	)
		522,993		541,062			(3	)		290,739			295,950			(2	)
Group life, accident & health
Medical Stop-loss		323,558		315,844			2			161,792			156,358			3
Other Medical		49,356		63,459			(22	)		27,038			31,853			(15	)
Other		38,010		46,026			(17	)		15,712			20,125			(22	)
		410,924		425,329			(3	)		204,542			208,336			(2	)
Aviation		76,908		83,751			(8	)		39,387			41,799			(6	)
London market account
Energy		80,322		77,632			3			63,740			62,818			1
Property Treaty		55,095		—		nm				17,465			—		nm
Other		63,610		56,589			12			23,860			26,654			(10	)
		199,027		134,221			48			105,065			89,472			17
Other specialty lines
Public Risk		34,691		35,877			(3	)		17,979			15,943			13
HCC Lloyd’s		27,369		23,613			16			9,767			12,391			(21	)
Other		42,130		39,861			6			24,109			17,440			38
		104,190		99,351			5			51,855			45,774			13
Discontinued lines		32		(10	)	nm				(10	)		(14	)	nm
Total	$	1,314,074	$	1,283,704			2	%	$	691,578		$	681,317			2	%

(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,
	2010		2009			Change			2010			2009			Change
Diversified financial products
D&O (1)	$	146,699	$	167,141			(12	)%	$	90,743		$	99,674			(9	)%
E&O (2)		96,478		111,359			(13	)		48,515			56,707			(14	)
Other		24,225		35,433			(32	)		11,304			13,601			(17	)
U.S. Surety & Credit		107,559		91,794			17			60,140			49,392			22
International Surety & Credit		36,673		35,135			4			17,037			18,125			(6	)
		411,634		440,862			(7	)		227,739			237,499			(4	)
Group life, accident & health
Medical Stop-loss		323,558		315,842			2			161,792			156,358			3
Other Medical		49,356		63,459			(22	)		27,038			31,853			(15	)
Other		10,067		15,370			(35	)		4,919			7,404			(34	)
		382,981		394,671			(3	)		193,749			195,615			(1	)
Aviation		53,750		60,876			(12	)		27,729			30,265			(8	)
London market account
Energy		47,465		47,735			(1	)		37,623			41,558			(9	)
Property Treaty		49,046		—		nm				13,789			—		nm
Other		41,250		32,806			26			17,799			12,589			41
		137,761		80,541			71			69,211			54,147			28
Other specialty lines
Public Risk		23,650		27,851			(15	)		14,445			12,735			13
HCC Lloyd’s		24,898		18,917			32			8,625			9,236			(7	)
Other		10,347		10,894			(5	)		5,314			3,869			37
		58,895		57,662			2			28,384			25,840			10
Discontinued lines		32		(10	)	nm				(10	)		(14	)	nm
Total	$	1,045,053	$	1,034,602			1	%	$	546,802		$	543,352			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-6

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

	Six months ended June 30,								Three months ended June 30,
	2010		2009			Change			2010			2009			Change
Diversified financial products
D&O (1)	$	183,639	$	172,488			6	%	$	90,721		$	89,686			1	%
E&O (2)		106,691		118,282			(10	)		52,798			58,877			(10	)
Other		21,364		20,767			3			9,538			9,791			(3	)
U.S. Surety & Credit		98,620		89,727			10			51,871			45,235			15
International Surety & Credit		35,884		32,651			10			17,695			16,242			9
		446,198		433,915			3			222,623			219,831			1
Group life, accident & health
Medical Stop-loss		323,558		315,842			2			161,792			156,359			3
Other Medical		50,618		66,229			(24	)		25,597			33,176			(23	)
Other		12,597		16,100			(22	)		5,742			7,548			(24	)
		386,773		398,171			(3	)		193,131			197,083			(2	)
Aviation		58,298		65,461			(11	)		29,355			32,647			(10	)
London market account
Energy		26,789		22,439			19			10,602			13,204			(20	)
Property Treaty		15,609		—		nm				8,855			—		nm
Other		29,215		26,940			8			15,988			12,501			28
		71,613		49,379			45			35,445			25,705			38
Other specialty lines
Public Risk		22,926		17,807			29			11,436			9,187			24
HCC Lloyd’s		19,187		20,940			(8	)		9,002			10,150			(11	)
Other		10,945		18,703			(41	)		5,403			7,389			(27	)
		53,058		57,450			(8	)		25,841			26,726			(3	)
Discontinued lines		32		(10	)	nm				(10	)		(14	)	nm
Total	$	1,015,972	$	1,004,366			1	%	$	506,385		$	501,978			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
(Unaudited, in thousands)

	Six months ended						Three months ended
	June 30,						June 30,
	2010			2009			2010			2009
Sources of net investment income:
Fixed income securities
Taxable	$	54,803		$	52,099		$	27,935		$	26,994
Exempt from U.S. income taxes		44,277			40,813			22,546			20,480
Total fixed income securities		99,080			92,912			50,481			47,474
Short-term investments		360			1,470			170			586
Other		2,042			1,051			534			1,103
Total investment income		101,482			95,433			51,185			49,163
Investment expense		(2,016	)		(1,804	)		(968	)		(752	)
Net investment income	$	99,466		$	93,629		$	50,217		$	48,411
Unrealized gain on available for sale fixed income securities:
Increase in unrealized gain for period, before tax	$	68,632		$	58,039		$	61,060		$	12,688
Unrealized gain at:
June 30, 2010	$	224,943
March 31, 2010	$	163,883
December 31, 2009	$	156,311

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, 2010					June 30, 2009						December 31, 2009
	Net earned		Loss			Net earned			Loss			Net earned		Loss
	premium		ratio			premium			ratio			premium		ratio
Diversified financial products
D&O (1)	$	183,639		62.5	%	$	172,488			62.1	%	$	371,650		61.2	%
E&O (2)		106,691		56.6			118,282			49.5			234,768		49.6
Other		21,364		41.3			20,767			47.7			39,123		43.4
U.S. Surety & Credit		98,620		28.3			89,727			30.9			182,627		29.9
International Surety & Credit		35,884		38.4			32,651			55.4			68,162		50.9
		446,198		50.6			433,915			51.0			896,330		50.2
Group life, accident & health
Medical Stop-loss		323,558		73.9			315,842			73.5			633,572		71.7
Other Medical		50,618		68.6			66,229			78.7			134,161		86.0
Other		12,597		58.3			16,100			58.4			29,887		43.6
		386,773		72.7			398,171			73.8			797,620		73.0
Aviation		58,298		59.3			65,461			57.0			129,626		56.6
London market account
Energy		26,789		36.7			22,439			7.7			49,116		24.0
Property Treaty		15,609		103.5			—		nm				—	nm
Other		29,215		60.8			26,940			42.6			54,043		41.5
		71,613		61.1			49,379			26.7			103,159		33.1
Other specialty lines
Public Risk		22,926		69.6			17,807			66.4			39,986		66.3
HCC Lloyd’s		19,187		62.1			20,940			65.1			40,273		69.1
Other		10,945		87.6			18,703			91.2			30,114		49.6
		53,058		70.6			57,450			74.0			110,373		62.8
Discontinued lines		32	nm				(10	)	nm				127	nm
Total	$	1,015,972		61.6	%	$	1,004,366			60.5	%	$	2,037,235		59.7	%

(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
Subprime Liability Exposure
June 30, 2010

• As of June 30, the Company had 77 “non-Side A only” D&O, E&O and Fiduciary Liability claims and 17 “Side A only” D&O claims relating to subprime issues. There were no new claims in the second quarter of 2010.

• Of the D&O claims reported, four are on primary policies with gross policy limits totaling $20 million. The remaining D&O claims are on excess policies.

• The average policy limit on the “non-Side A only” claims is $13.3 million gross and $9.1 million net, with an average attachment point of $85 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-10