Terra Nova Increases Its Lloyd's Participation

Terra Nova (Bermuda) Holdings Ltd. has announced the results of its recent participation in the Lloyd's Capacity Auctions for underwriting year 1999 by its London subsidiary Terra Nova Capital Limited, the Company's corporate member at Lloyd's.

Terra Nova Capital was an active participant in each of the six capacity auctions, which began on July 14, 1998 and ended on September 23, 1998. The capacity auction, sponsored by the Corporation of Lloyd's, is the principal means by which individual and corporate members acquire and dispose of capacity or their commitment to support the underwriting business in selected syndicates.

Terra Nova Capital's participation resulted in the acquisition of $107.5 million (64 million pounds sterling) of new capacity for the coming 1999 underwriting year. Terra Nova confined its purchases to the eight syndicates managed by its wholly owned subsidiary, Octavian Syndicate Management Ltd. Terra Nova's total expenditure, including auction administration fees, was $5.7 million, or an average price of 5.3 cents per dollar of capacity. Terra Nova Capital was the successful bidder on approximately 90 percent of the Octavian capacity that was transferred.

Nigel Rogers, Terra Nova's president and CEO said, "These purchases in the auction, along with additional unsold capacity which may come to Terra Nova at no cost, will bring the Terra Nova's share of aggregate capacity on the eight syndicates managed by Octavian to approximately 77 percent for the 1999 underwriting year up from approximately 60 percent for the 1998 underwriting year. This newly acquired capacity continues Terra Nova's strategy of acquiring capacity when warranted by market conditions and price."