1. 0 HARDY UNDERWRITING GROUP PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ANALYST PRESENTATION 26 MARCH 2003

2. 1 RESULTS OVERVIEW profit before tax of £6.7m is very pleasing dividend improved from 6.5p to 7.25p all underlying years of account performing well market continues to look interesting but is still patchy syndicate investments have performed well over the year Group equity position mitigated by return on cash

3. 2 UNDERWRITER’S OVERVIEW 2000 and prior years 2000 has closed with an overall profit of 7% pure year profit of 1.8% prior year release amounts to 5.2% end of weak market: premium base of £16.5m all prior years showing benign claims development

4. 3 UNDERWRITER’S OVERVIEW (continued) 2001 pure year profit forecast in range 6.5% to 11.5% net premiums forecast to reach £30m incurred loss ratios stabilising WTC remains at $2.6m net; no material involvement in other major 2001 losses all accounts progressing well and expected to contribute to final result

5. 4 UNDERWRITER’S OVERVIEW (continued) 2002 year continues to progress well: combination of rates and low claims incidence should produce a very satisfactory result net premium volumes forecast to reach £42m/gross premium £56m quota share syndicate not needed: disappointing airline renewals general aviation very promising cargo – including specie and jewellers block, developed more than originally anticipated marine hull – less competition for small craft/fleets; bluewater hulls not there yet in rating terms non-marine – rates satisfactory but volumes disappointing; new niche lines now introduced

6. 5 UNDERWRITER’S OVERVIEW (continued) 2003 syndicate capacity £100m; gross premiums forecast at £85m overall market rating levels are holding up reasonably well (although not consistently) aviation -focus is on general aviation book -internet product now in use -will continue to be selective on airline involvement marine including cargo -hull market improvements are steady -cargo continues to be well-rated/ specie developing well non-marine -catastrophe account expanded geographically -accident and health book introduced

7. 6 FINANCIAL HIGHLIGHTS Group share of gross premium written up by 45% to £46.8m (2001 - £32.2m) profit before tax of £6,659,000 (2001 - £3,192,000) gain on Atrium investment £1.45m operating profit, assuming long term rate of return, excluding gain on Atrium investment, of £6,518,000 (2001 - £4,648,000) combined ratio 81.8% (2001 – 83.2%) dividend proposed 7.25p (2001 – 6.5p)

8. 7 GROUP PERFORMANCE Full Year 2002 £’000 Full Year 2001 £’000 Underwriting year 2002 (2001)1,246527 Underwriting year 2001 (2000)3,871540 Underwriting year 2000 & prior (1999 & prior) 3,3234,166 Investment return included in non-technical account 371(1,456) Other income1,7071,119 Total income10,5184,896 Expenses(3,859)(1,704) Profit before tax6,6593,192

9. 8 GROUP STATISTICS Full Year 2002 £’000 Full Year 2001 £’000 Gross written premium46,84032,200 Profit before tax6,6593,192 Operating profit before tax (before gain on Atrium investment) Operating profit after tax (after gain on Atrium investment) 6,518 7,968 4,648 Shareholders’ funds55,52030,009 Earnings per share - basic - diluted 16.2p 16.1p 13.8p 13.7p Net assets per share160p171p Net tangible assets per share Dividend per share 144p 7.25p 138p 6.5p

10. 9 100% TECHNICAL RESULT Full Year 2002 £’000 Full Year 2001 £’000 Gross written premium58,69643,165 Net written premium45,25038,170 Net earned premiums43,51330,230 Allocated investment income2,7133,060 Net claims incurred(21,829)(16,720) Net operating expenses(14,317)(10,655) Change in deferred acquisition costs 1,2331,395 Technical result11,3137,310 Claims ratio50.2%55.3% Expense ratio31.6%27.9% Combined ratio81.8%83.2%

11. 10 CASH & INVESTMENTS Full Year 2002 £’000 Full Year 2001 £’000 GROUP ASSETS Fixed interest10,20511,005 Equity based investments17,4728,209 Deposits5,064432 GROUP’S SHARE OF SYNDICATE ASSETS Fixed interest16,25210,845 Deposits5,8265,455 TOTAL54,81935,946 CASH AT BANK Group13,133756 Group’s share of syndicate7,3412,728 TOTAL20,4743,484

12. 11 THE FUTURE profit not volume focus is being maintained (e.g. airline business not renewed) existing core business is being developed as are new niche lines overall underwriting environment continues to be promising reserving approach robust and no material exposure to reinsurance bad debt on track to meet our 10% average return on capacity target will increase syndicate capacity for 2004 should current market conditions continue will purchase syndicate 382 capacity if the price is reasonable will continue as a niche quality player and maintain existing underwriting philosophy but wish to expand the business further both inside and possibly outside Lloyd’s