Hiscox Bermuda. Rights Issue

Hiscox PLC
08 November 2005


8 November 2005

Not for release, publication or distribution in whole or in part in or into the
United States, Canada, Australia or Japan

                             HISCOX PLC ANNOUNCEMENT

Establishment of Hiscox Bermuda and Rights Issue to raise £170 million

Rationale, management and strategy

• Establishment of wholly-owned Bermudan insurer, Hiscox Bermuda,
  capitalised at US$500 million
• Opportunity to capitalise on favourable market conditions with expected
  participation in the 2006 renewals season
• Experienced management team with Robert Childs to become Chief Executive
  of Hiscox Bermuda
• Hiscox Bermuda will write a balanced business mix of reinsurance and
  retail business

Financial aspects

• Anticipated premiums of US$325 million in 2006, of which US$235 million
  will be incremental to the Group
• The establishment of Hiscox Bermuda and the Rights Issue will, in the
  absence of abnormal losses, enhance the Group's net asset value per share
  immediately, its earnings per share from 2006 and its return on equity from
  2007
• 2005 final dividend will be payable on all shares and will, in the
  absence of unforeseen circumstances, be 4.75p, giving a total of 7.0p
  for the year (2004 5.0p), and, in the absence of unforeseen
  circumstances, a dividend of 9.0p is anticipated for 2006
• Capitalisation will be funded through the Rights Issue, US$225m of bank
  borrowings and existing Group resources

Rights issue

• 0.327 new Ordinary Shares for every 1 existing Ordinary Share at 183 pence
  per Ordinary Share
• Net proceeds of £170 million
• Represents a 14.8 per cent discount to the closing price on 7 November 2005, 
  the last day prior to announcement, and a 11.6 per cent discount to the 
  theoretical ex-rights price (TERP)
• Fully underwritten by UBS Limited

Commenting on the proposed Rights Issue, Robert Hiscox, Chairman of Hiscox
plc, said

'We have watched the growing market in Bermuda and for some time considered that
we need to underwrite there to increase the spread, balance and distribution of
both our global reinsurance and retail accounts. Bermuda is a fast growing
reinsurance market, which now sees business not shown in London, and has pricing
advantages and a favourable regulatory regime.

The time is right for us to open there. Reinsurance prices will be strong
following the spate of hurricanes this year. Robert Childs will lead the Hiscox
Bermuda team and will write a disciplined, balanced portfolio of both
reinsurance and retail business.

This is an exciting opportunity to underwrite our business more internationally,
with an experienced team, with a proven track record.'

A presentation for analysts will be held today, 8 November 2005, at 9:30 a.m. at
the offices of Hiscox, 1 Great St Helen's, London, EC3A 6HX. Analysts intending
to attend the presentation are requested to notify The Maitland Consultancy in
advance.

Enquiries

Hiscox plc
Robert Hiscox, Chairman                      020 7448 6011
Bronek Masojada, Chief Executive Officer     020 7448 6012
Stuart Bridges, Finance Director             020 7448 6013

The Maitland Consultancy                     020 7379 5151
Public Relations
Angus Maitland
Suzanne Bartch

UBS Investment Bank                         020 7568 1000
Sole Sponsor, Underwriter and Joint 
Financial Adviser
John Woolland
Ian Gladman

N M Rothschild & Sons                       020 7280 5000
Joint Financial Adviser
Jonathan Eddis

This announcement is not for release, publication or distribution, directly or
indirectly, in whole or in part, in or into the United States (including its
territories and possessions, any state of the United States and the District of
Columbia). This announcement is not an offer of securities for sale into the
United States or in any jurisdiction in which such an offer or solicitation is
unlawful. The securities referred to in this announcement have not been and will
not be registered under the US Securities Act of 1933, as amended, and may not
be offered or sold in the United States, absent registration or an applicable
exemption from registration. No public offering of the securities will be made
in the United States.

This announcement does not constitute or form part of any offer or invitation to
sell or issue, or any solicitation of any offer to purchase or subscribe for,
the nil paid rights, the fully paid rights or the new Ordinary Shares being
issued in connection with the Rights Issue, in any jurisdiction or in any
circumstances in which such offer or solicitation is unlawful. The nil paid
rights, the fully paid rights, the new Ordinary Shares and the provisional
allotment letters have not been, and will not be, registered under the
applicable securities laws of Canada, Australia or Japan. Accordingly, unless an
exemption under any applicable laws is available, the nil paid rights, the fully
paid rights, the new Ordinary Shares and the provisional allotment letters may
not be offered, sold, transferred, taken up or delivered, directly or
indirectly, in Canada, Australia or Japan or any other country outside the
United Kingdom where such distribution may otherwise lead to a breach of any law
or regulatory requirement.

Prices and values of, and income from, shares may go down as well as up and an
investor may not get back the amount invested. It should be noted that past
performance is no guide to future performance. Persons needing advice should
consult an independent financial adviser.

Certain statements made in this announcement constitute forward-looking
statements. Such statements are based on current expectations and, by their
nature, are subject to a number of risks and uncertainties that could cause
actual results and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking statement.
Furthermore, these forward-looking statements speak only as of the date of this
announcement.

The information and opinions contained in this announcement are subject to
change without notice and the Company assumes no responsibility or obligation to
update publicly or review any of the forward-looking statements contained
herein.

Each of UBS Investment Bank and N M Rothschild & Sons Limited is acting for
Hiscox plc in connection with the Rights Issue and no-one else and will not be
responsible to anyone other than Hiscox plc for providing the protections
afforded to each of their respective clients or for providing advice in relation
to the Rights Issue or any other matters referred to in this document.

This summary should be read in conjunction with the detailed announcement which
follows.


Further details of the formation of Hiscox Bermuda and the proposed Rights Issue

Introduction

The Board of Hiscox plc ('Hiscox') announces its intention to establish a new
Bermudan insurer, Hiscox Insurance Company (Bermuda) Limited ('Hiscox Bermuda').
The Board also announces that it intends to capitalise Hiscox Bermuda at
approximately US$500 million. The capitalisation will be funded through the
proposed Rights Issue, additional bank borrowings and existing Group resources.

The Board announces the terms of the proposed Rights Issue, being 96,376,553 new
Ordinary Shares at 183 pence per share on the basis of 0.327 new Ordinary Shares
for every 1 existing Ordinary Share to raise approximately £170 million (US$297
million), net of expenses. The Rights Issue has been fully underwritten by UBS
Limited.

Background on Hiscox

Hiscox is a specialist insurance group listed on the London Stock Exchange.
There are three main divisions within the Group - Hiscox Global Markets, Hiscox
UK and Hiscox International.

The Board's ambition is to build a successful specialised insurer known for its
expertise in its chosen areas of business, its focus on customers and its
financial performance. Hiscox's strategy is to build the Group on the
complementary foundations of internationally traded business and retail
insurance business.

Background to and reasons for the Rights Issue

Favourable market outlook

The Board believes that insurance and reinsurance premium rating levels are
hardening post the recent US hurricanes. Hurricanes Katrina, Rita and Wilma were
unusually large natural catastrophe insurance events. Indeed, Hurricane Katrina
is thought by most industry commentators to be the largest ever insurance loss
following a natural catastrophe. Federal disaster declarations in respect of
Hurricane Katrina have been issued over 90,000 square miles of the United
States, an area almost as large as the United Kingdom. Hurricane Rita is the
strongest measured hurricane ever to have entered the Gulf of Mexico, with winds
peaking at 175mph. Hurricane Wilma achieved the same maximum wind speed. 2005 is
the first year with three category 5 Atlantic storms in a season.

The Board believes that these storms have created a shortage of capacity in the
reinsurance markets and that this will produce a sustained increase in levels of
insurance and reinsurance premium rates. The Board has seen evidence already of
rate rises on business which has renewed since Hurricane Katrina struck New
Orleans on 29 August 2005. Accordingly, on 7 October 2005 Hiscox announced that,
rather than the originally planned lowering of the premium income capacity of
Syndicate 33 for 2006 from £775 million to £650 million, it is now planning for
a premium income capacity of £833 million.

Bermuda

Bermuda is now one of the major reinsurance centres of the world. According to
Standard & Poor's Global Reinsurance Highlights Report of 2005 (the 'Report'),
13 of the world's top 40 reinsurers are based in Bermuda, and Bermuda is the
fourth largest reinsurance market in the world after Germany, the US and
Switzerland. The Report also highlights that for the first time in 2004,
Bermuda-based reinsurers' aggregate net written reinsurance premiums exceeded
those of London-based reinsurers.

Overall, the Report highlights that reinsurance net written premiums for the
whole world in 2004 grew by 3.3 per cent. However, in the same period those for
Bermudan-based companies grew by 15.9 per cent. This demonstrates the growing
importance of the market.

Hiscox's Bermudan strategy

The Board believes that the Group will benefit significantly from having a
trading platform in the Bermudan market as well as the London markets. While
there is business that is shown to underwriters both in the Bermudan and London
markets simultaneously, there is much that is shown only to one market or
another. The Board believes therefore that having a trading platform in both
markets will increase the level of opportunity to write profitable business. In
respect of US business, the acquisition costs have historically been
significantly lower in Bermuda than in London which has given Bermudan
reinsurers a pricing advantage that Hiscox Bermuda will in future be able to
enjoy.

Potential redomicile

The Board notes that as such a substantial amount of the Group's business could
originate from the Bermudan and US markets, it may be in Shareholders' interests
to move the domicile of Hiscox's parent company to Bermuda. The Board is
currently examining this.

Hiscox Bermuda

Hiscox Bermuda has obtained a licence from the Bermuda Monetary Authority to
operate a Class 4 Bermudan insurance company conditional only upon the
capitalisation of Hiscox Bermuda to US$100 million.

The Board intends to seek a rating for Hiscox Bermuda as soon as is reasonably
practicable. Hiscox has had discussions with A.M. Best and is targeting an A-
rating for Hiscox Bermuda shortly after the closing of the Rights Issue. If this
rating is not achieved, Hiscox would seek to employ the new capital raised
pursuant to the Rights Issue to support, develop and grow its underwriting
operations.

The Board believes Hiscox Bermuda will give the Group immediate access to the
Bermudan market. Hiscox Bermuda will thus be able to participate in the January
2006 renewals season in Bermuda, which, for the reasons outlined above, is
expected to offer opportunities to write business at attractive pricing levels
by targeting brokers with which the Hiscox Group has existing and strong
relationships.

The Board has given consideration to the amount of capital that Hiscox Bermuda
would require in order to present the necessary strong and credible balance
sheet to potential customers and in order to support the types and amounts of
business which Hiscox anticipates writing in 2006 and beyond. The Board believes
that the optimal level of shareholders' equity for Hiscox Bermuda is
approximately US$500 million.

The Board intends to create an underwriting and reinsurance modelling team
through the transfer of existing Hiscox staff and senior management to Bermuda
in time for the 2006 January renewal season (see 'Management Changes' below).
Hiscox intends to recruit additional new staff to strengthen this team. The
business plan that has been developed by Hiscox expects Hiscox Bermuda to write
US$325 million of premiums in 2006, comprising both third party reinsurance
business and quota share participation in some of Hiscox's existing insurance
business in other group carriers. Of this total, the Directors estimate
approximately US$235 million is incremental to the Group. Hiscox believes that
this business mix will give Hiscox Bermuda a balance that a pure third party
catastrophe reinsurer would find harder to achieve. The third party reinsurance
business mix will reflect Hiscox's view of where the potential for most profit
lies in the coming year.

The Board also intends to design a reinsurance programme in line with the
programmes that protect other Group carriers.  This is intended to dovetail with
the aggregations of reinsurance risk that Hiscox Bermuda plans for 2006 and the
realistic disaster scenarios that apply to those aggregates.

Between 1993 and 2004 Hiscox's reinsurance account has had an average gross
incurred loss ratio of 58% (source: unaudited management financial information).
While the past is no guarantee of future performance, Hiscox sees no reason why
Hiscox Bermuda should not be able to match this underwriting performance.

Management changes

Robert Childs, an executive Director of Hiscox, is stepping down as Managing
Director of Hiscox Global Markets and Active Underwriter of Syndicate 33 and
will become Chief Executive of Hiscox Bermuda. He will however remain as Chief
Underwriting Officer of the Group. Robert has been at Hiscox since 1986 and has
been Active Underwriter of Syndicate 33 since 1993. He has served on numerous
Lloyd's bodies, most recently as Chairman of the Lloyd's Market Association from
January 2003 until May 2005.

Richard Watson, 42, a member of the Executive Group that runs Hiscox, is
currently Underwriting Director for Hiscox Global Markets. He will become the
Managing Director of Hiscox Global Markets and, subject to Lloyd's approval,
Active Underwriter of Syndicate 33. Richard has been at Hiscox since 1986 and he
is also a member of Lloyd's Market Association Underwriting and Claims
Committee.

Financial effects of the Rights Issue

The Board believes that, in the absence of abnormal losses, the Rights Issue and
the formation of Hiscox Bermuda will enhance the Group's net asset value per
share immediately, its earnings per share from 2006 and its return on equity
from 2007.

Current trading, trends and prospects

Interim results

Hiscox announced on 12 September 2005 its unaudited interim results for the six
months ended 30 June 2005. Highlights of these unaudited interim results are set
out below .

The Group's gross written premium fell by 10.6 per cent. in this period from
£489.0 million for the six months to 30 June 2004 to £437.2 million for the six
months to 30 June 2005. Over the same periods, the combined ratio improved to
83.5 per cent. (2004: 84.6 per cent.). This led to an increase in profit before
tax to £88.1 million (2004: £60.3 million).

Subsequent announcements in relation to Hurricanes Katrina, Rita and Wilma

On 7 October 2005 Hiscox announced that the estimated net loss from Hurricane
Katrina was US$110 million, following a case by case reserving review by
Hiscox's claims and underwriting staff where possible and otherwise assuming an
industry loss of US$45 billion. At the same time it was estimated that Hiscox's
net loss from Hurricane Rita was US$70 million, noting that this reflected the
retentions which Hiscox has prior to the reinsurance programme becoming
effective. The effect of the change in estimate for Hurricane Katrina and the
loss estimate for Hurricane Rita will be to reduce Hiscox's 2005 pre-tax profit
by £25 million.

On 31 October 2005 Hiscox announced that the estimated net loss from Hurricane
Wilma was US$45 million. This estimate was based on the model storm track from
modelling companies augmented by underwriting and claims staff review. At the
same time Hiscox increased its estimated net loss from Hurricane Katrina by
US$15 million to US$125 million. The estimated net loss in respect of Hurricane
Rita remained unchanged at US$70 million. The effect of these changes in
estimates will be to reduce Hiscox's 2005 pre-tax profit by a further £35
million. Hiscox still has substantial reinsurance cover remaining for a major
event.

Global Markets Division

The Global Markets Division, which underwrites principally London Market risks,
wrote gross written premium for the first six months of 2005 of £306.2 million
(2004: £364.4 million) a decrease of 16.0 per cent. At the same time, its
combined ratio was 82.8 per cent. (2004: 82.4 per cent.). The gradually
softening markets in the first half have reduced premium on renewal business
somewhat and the Global Markets Division has not renewed certain business which
it felt was on offer at inadequate prices due to rate cuts.

The Global Markets Division reports that rates are now rising in most property
classes and rising steeply in those classes that have been directly affected by
the hurricane losses. Reinsurance rate rises are also substantial. The Global
Markets Division's distribution will, the Board believes, be aided by the
establishment of Hiscox Inc. which will begin trading on 1 January 2006
targeting US business that is of a medium size.

Retail Division

Hiscox's UK Retail Division gross written premium for the first six months of
2005 was £84.1 million (2004: £79.0 million), an increase of 6.5 per cent. At
the same time, the combined ratio improved from 89.3 per cent. to 81.6 per cent.
This excellent performance on the combined ratio was in part due to the benign
weather conditions that the UK had enjoyed in the first half of 2005. Hiscox's
International Retail Division had a gross written premium for the first six
months of 2005 of £46.9 million (2004: £45.6 million) an increase of 2.9 per
cent. At the same time, its combined ratio improved from 103.8 per cent. to 95.4
per cent.

There are also rate rises in the Retail Division, especially for property risks
which are larger or more complex.

Trends and prospects

The Directors believe that insurance market conditions going into 2006 are
strong and that this will benefit the Group's overall trading performance. The
Directors are confident about the prospects for the Group for the current
financial year.

Hiscox Performance Share Plan

The Board believes that the launch of the Bermuda based reinsurance business by
Hiscox Bermuda provides an opportunity for increasing Shareholder returns. In
order to ensure that the interests of the key executives of the Group are
aligned with the objectives of Shareholders, the Remuneration Committee has
proposed that the Group adopts an amendment to the terms of the Hiscox
Performance Share Plan and makes a special award under that plan. The
Remuneration Committee believes that this will ensure key executives focus on
maximising the value of new business to be sought by Hiscox Bermuda and the
Group's existing businesses. The maximum number of Ordinary Shares over which
the special award will be made is 5 million, of which no more than 20 per cent.
will be allocated to the executive Directors.

The amendment to the Hiscox Performance Share Plan will be to increase the
maximum annual individual grant to up to 200 per cent. of salary. The vesting of
the special award which it is proposed will be made will be subject to Hiscox
achieving, over a three year performance period, an average post-tax return on
equity of between 10 per cent. and 17.5 per cent. per annum. The amendment to
the Hiscox Performance Share Plan is subject to the approval of Shareholders.

A separate circular will be sent in due course to convene an extraordinary
general meeting at which a resolution to approve the amendment to the Hiscox
Performance Share Plan will be proposed. Further details will be set out in the
separate circular.

Dividend and dividend policy

Hiscox has a progressive dividend policy with an ambition of steady dividend
growth throughout the insurance cycle. This ensures that Shareholders benefit
directly and smoothly from the business whilst ensuring that there is sufficient
capital to grow the existing businesses.

At the time of the interim results on 12 September 2005 the Board announced an
interim dividend of 2.25p per Ordinary Share in respect of the six months ended
30 June 2005, payable on 24 October 2005 to Shareholders on the Register at the
close of business on 30 September 2005.

The new Ordinary Shares will be eligible for the final dividend in respect of
2005. In the absence of unforeseen circumstances, the Board anticipates this
final dividend will be 4.75p per Ordinary Share giving a total dividend of 7.0p
per Ordinary Share for 2005 (2004: total dividend of 5.0p per Ordinary Share).

Following the Rights Issue, in the absence of unforeseen circumstances, Hiscox
expects to pay a full year dividend of 9.0p per Ordinary Share for the 2006
financial year and thereafter intends to resume its progressive dividend policy
described above.

Principal terms and conditions of the Rights Issue

Hiscox is proposing to raise approximately £170 million (US$297 million) (net of
expenses) by the issue of 96,376,553 new Ordinary Shares at a price of 183 pence
per new Ordinary Share. The Issue Price reflects a discount of 14.8 per cent. to
the middle market price of 214.75 pence per Ordinary Share on 7 November 2005,
the last business day prior to the date of announcement of the Rights Issue and
a 11.6 per cent. discount to the theoretical ex-rights price. The issue is being
made by way of a Rights Issue to Qualifying Shareholders on the basis of:

         0.327 new Ordinary Shares for every 1 existing Ordinary Share

held on the Record Date.

If a Qualifying Shareholder does not take up the offer of new Ordinary Shares,
his shareholding will be diluted by 24.6 per cent.

The new Ordinary Shares will, when issued and fully paid, rank equally in all
respects with the existing issued Ordinary Shares, including the right to
receive all dividends or distributions made, paid or declared after the date of
the prospectus to be issued in respect of the Rights Issue. Entitlements to new
Ordinary Shares will be rounded down and the aggregated fractions will not be
allotted to Hiscox Shareholders but will be sold for the benefit of the Company.

The Rights Issue is conditional upon Admission taking place not later than 8.00
a.m. on 10 November 2005 or on such other later time and/or date as Hiscox and
UBS may determine and the Underwriting Agreement otherwise having become
unconditional in all respects and not having been terminated in accordance with
its terms prior to commencement of dealings in the new Ordinary Shares, nil
paid.

Expected timetable for Rights Issue

Record Date for the Rights Issue                         Close of business 3
                                                         November 2005

Despatch of the Prospectus                               8 November 2005

Despatch of Provisional Allotment Letters (Qualifying    8 November 2005
non-CREST Shareholders only)

Dealings in new Ordinary Shares, nil paid, commence on   8.00 a.m. on 9
the London Stock Exchange                                November 2005

Existing Ordinary Shares marked 'ex-rights' by the       8.00 a.m. on 9
London Stock Exchange                                    November 2005

Nil Paid Rights credited to stock accounts in CREST      As soon as practicable
(Qualifying CREST Shareholders only)                     after 8.00 a.m. on 9
                                                         November 2005

Recommended latest time and date for requesting          4.30 p.m. on 22
withdrawal of Nil Paid Rights or Fully Paid Rights       November 2005
from CREST (i.e. if your Nil Paid Rights or Fully Paid                 
Rights are in CREST and you wish to convert them
into certificated form)

Latest time and date for depositing renounced            3.00 p.m. on 24
Provisional Allotment Letters, nil or fully              November 2005
paid, into CREST or for dematerialising Nil Paid         
Rights or Fully Paid Rights into a CREST stock account

Latest time and date for splitting Provisional Allotment 3.00 p.m. on 25
Letters, nil or fully paid                               November 2005
                                                               
Latest time and date for acceptance and payment in full  11.00 a.m. on 29
and registration of renounced Provisional Allotment      November 2005
Letters   
                                                                
Dealings in new Ordinary Shares, fully paid, commence    8.00 a.m. on 30
on the London Stock Exchange and new Ordinary Shares     November 2005
credited to CREST stock accounts (Qualifying CREST  
Shareholders only)                                            

Despatch of share certificates for new Ordinary Shares   7 December 2005
in certificated form (Qualifying non-CREST Shareholders
only)

Definitions

In this document, the following expressions have the following meanings, unless
the context otherwise requires:

''Admission''             the admission of the new Ordinary Shares, nil paid,
                          (i) to the Official List and (ii) to trading on the 
                          London Stock Exchange's market for listed securities 
                          becoming effective in accordance with, respectively, 
                          the Listing Rules and the Admission and Disclosure 
                          Standards

'Canada'                  Canada and its provinces and territories

'certificated' or 'in     where a share or other security is not in 
certificated form'        uncertificated form

'CREST'                   the relevant system, as defined in the CREST
                          Regulations (in respect of which CRESTCo. Limited is 
                          operator as defined in the CREST Regulations)

'Directors' or 'Board'    the Directors of Hiscox

'Fully Paid Rights'       rights to acquire the new Ordinary Shares, fully
                          paid

'Hiscox' or 'the          Hiscox plc
Company'

'Hiscox Bermuda'          Hiscox Insurance Company (Bermuda) Limited which is
                          a wholly owned subsidiary of Hiscox

'Hiscox Group' or         Hiscox and its subsidiaries and subsidiary undertakings
'Group'       

'Hiscox Inc.'             Hiscox Inc. a wholly owned subsidiary of Hiscox

'Hiscox Shareholder' or   A holder of Hiscox Shares
'Shareholder'

'HSL'                     Hiscox Syndicates Limited, a Lloyd's managing agent
                          which manages the affairs of the Hiscox managed 
                          syndicates and which is a wholly-owned subsidiary of 
                          Hiscox

'Issue Price'             183 pence per new Ordinary Share

'Listing Rules'           the Listing Rules of the UK Listing Authority

'Lloyd's'                 The Society and Corporation of Lloyd's incorporated by
                          the Lloyd's Act 1871

'London Market'           the international insurance markets, both inside and
                          outside Lloyd's based in the City of London

'London Stock             London Stock Exchange plc
Exchange'

'new Ordinary Shares'     the new Ordinary Shares to be allotted and issued
                          pursuant to the Rights Issue

'Nil Paid Rights'         the rights to acquire the new Ordinary Shares, nil
                          paid

'Non-UK Shareholders'     Qualifying Shareholders with registered addresses
                          outside the UK or who are citizens or residents of 
                          countries outside the UK

'Official List'           the official list of the UK Listing Authority

'Ordinary Shares' or      ordinary shares of 5 pence each in the capital of the
'Hiscox Shares'           Company
 
'Performance Share        the Hiscox Performance Share Plan
Plan'

'Provisional Allotment    the renounceable Provisional Allotment Letters to be
 Letters'                 sent to Qualifying non-CREST Shareholders (other than 
                          certain Non-UK Shareholders) in respect of the new 
                          Ordinary Shares to be provisionally allotted to them 
                          pursuant to the Rights Issue

'Qualifying CREST         Qualifying Shareholders holding Hiscox Shares in
Shareholders'             uncertificated form

'Qualifying non-CREST     Qualifying Shareholders holding Hiscox Shares in
Shareholders'             certificated form

'Qualifying               holders of Hiscox Shares on the register of members of
Shareholders'             Hiscox at the close of business on the Record Date of 
                          the Rights Issue

'Record Date'             close of business on 3 November 2005

'Rights Issue'            the proposed issue by way of rights of 96,376,553
                          new Ordinary Shares to Qualifying Shareholders on the
                          terms and subject to the conditions set out in the 
                          prospectus relating to the Rights Issue and, in the 
                          case of Qualifying non-CREST Shareholders, in the 
                          Provisional Allotment Letters

'Syndicate 33' or the     an annual joint venture between names at Lloyd's which
'Syndicate'               is managed by HSL and in which the Hiscox Group 
                          participates

'UBS'                     UBS Limited

'UK Listing               the Financial Services Authority in its capacity as
Authority'                the competent authority for the purposes of Part VI 
                          of the Financial Services and Markets Act 2000 and in
                          the exercise of its functions in respect of the 
                          admission to the Official List otherwise than in
                          accordance with Part VI of the Financial Services and
                          Markets Act 2000

'uncertificated' or 'in   recorded on the relevant register of the share or
 uncertificated form'     security concerned as being held in uncertificated 
                          form in CREST, and title to which, by virtue of the 
                          Regulations, may be transferred by means of CREST

'Underwriting             the conditional agreement dated 8 November 2005
Agreement'                between Hiscox and UBS relating to the Rights Issue
                          described in the prospectus

'United Kingdom' or       the United Kingdom of Great Britain and Northern
'UK'                      Ireland

'United States' or        the United States of America, its territories and
'US'                      possessions, any state of the United States, and the
                          District of Columbia

'US Securities Act'       the United States Securities Act 1933, as amended

For the purposes of this document, 'subsidiary', 'subsidiary undertaking'
and 'parent undertaking' shall, unless the context otherwise requires, have
the respective meanings given to them by the Companies Act 1985.




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