Montpelier Announces Further Development of U.S. Trading Platform

Montpelier Re Holdings Ltd. (NYSE - MRH) ("Montpelier") today
announced further progress in the establishment of its U.S. presence.

Firstly, Montpelier announced that Montpelier Underwriting Inc.
("MUI"), its wholly-owned U.S. Managing General Agent, has been
granted Coverholder approval by Lloyd's and has begun to introduce
business to Montpelier Syndicate 5151 ("Syndicate 5151").

Based in Hartford, Connecticut, MUI is the centerpiece of
Montpelier's growing U.S. insurance and reinsurance underwriting
platform. The first binder granted to MUI by Syndicate 5151 is for
Property Brokerage Facultative reinsurance business. This division of
MUI, headed by Paul Keefe as Senior Vice President, will write
property facultative business in the U.S. distributed through
reinsurance brokers. Mr. Keefe has over thirty years of profitable
underwriting results to his credit, including the last four years at
Wellington (now Catlin) Underwriting Inc.

Secondly, Montpelier announced the purchase of a U.S. E&S company
through its indirect wholly-owned subsidiary, Montpelier Re U.S.
Holdings Ltd. ("Montpelier U.S.").

Montpelier U.S. has entered into a Stock Purchase Agreement with
Gainsco Inc., a Texas corporation, for the acquisition of General
Agents Insurance Company of America, Inc. ("General Agents Insurance
Company"). General Agents Insurance Company is a licensed admitted
insurer in the State of Oklahoma and is authorized as an excess and
surplus lines insurer in 37 states (38 states total). Montpelier U.S.
is to acquire General Agents Insurance Company for a purchase price of
up to $4.75 million, subject to possible adjustments, plus the amount
of policyholders' surplus that remains in General Agents Insurance
Company at closing.

Upon closing, Montpelier U.S. will rename the company Montpelier
U.S. Insurance Company ("MUSIC"). MUSIC will write primarily excess
and surplus line insurance in the continental U.S., and its
underwriting operations will be based in Scottsdale, Arizona.

Stan Kott, CEO of Montpelier's U.S. insurance operations, said:
"We are thankful for the confidence Lloyd's has expressed in our
operations by virtue of this Coverholder approval. We are excited to
be able to underwrite business for Syndicate 5151 in order to grow our
overall U.S. platform. Additionally, we are delighted about the
acquisition of General Agents Insurance Company. We are assembling a
solid team of insurance specialists with proven track records of
success in this business. With the acquisition of what will become
known as MUSIC, we are that much closer to the realization of our
plans. We are committed to developing a meaningful presence in the
U.S. reinsurance and insurance market through patient and expert
underwriting. Developing strong and deep relationships with our
clients and brokers is key to our strategy."

Dick Nenaber, who will become President of MUSIC, noted: "We are
pleased to have acquired an E&S company with so many state
authorizations. Our team is being assembled and we hope to be writing
our first business before the end of the year. My many years of
experience suggest that a slow and steady hand and sticking to what
one knows is a positive indicator in any market."

Anthony Taylor, Chairman and CEO of Montpelier Re, said: "MUI's
attainment of Approved Coverholder status successfully completes
Montpelier's entrance into the Lloyd's market and represents a
significant vote of confidence by Lloyd's in the quality of Stan
Kott's management team. The acquisition of General Agents Insurance
Company, meanwhile, will allow us to write specialist areas of E&S
business traditionally written by U.S. insurance entities rather than
through Bermuda or London insurers. The combination of these
activities represents another portion of Montpelier's strategic
expansion. Our growing U.S. trading platform will allow Montpelier to
diversify its portfolio while remaining within its core competency of
underwriting primarily short-tail business."

About Montpelier Re

Through our operations in Bermuda, the U.S. and Europe, the
Montpelier Group provides customized, innovative, and timely
reinsurance and insurance solutions to the global market. Montpelier
Re Holdings Ltd. began underwriting in December 2001 through our
Bermuda subsidiary, Montpelier Re. Following approval from Lloyd's, on
July 1, 2007 we began the commencement of trading of Montpelier
Syndicate 5151 (MRE). Marketing offices in London and Switzerland
support the Syndicate, which will also accept business from our
wholly-owned Managing General Agent, Montpelier Underwriting Inc.
(MUI), based in Hartford, Connecticut. For further information about
Montpelier Re, please visit our website at www.montpelierre.bm.

Application of the Safe Harbor of the Private Securities
Litigation Reform Act of 1995:

This press release contains, and Montpelier Re may from time to
time make, written or oral "forward-looking statements" within the
meaning of the U.S. federal securities laws, which are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. All forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and other factors, many of which are outside
Montpelier's control, that could cause actual results to differ
materially from such statements. In particular, statements using words
such as "may," "should," "estimate," "expect," "anticipate," "intend,"
"believe," "predict," "potential," or words of similar import
generally involve forward-looking statements.

Important events and uncertainties that could cause the actual
results, future dividends or future common share repurchases to differ
include, but are not necessarily limited to: market conditions
affecting our common share price; the possibility of severe or
unanticipated losses from natural or man-made catastrophes; the
effectiveness of our loss limitation methods; our dependence on
principal employees; our ability to execute the business plan for
Montpelier Syndicate 5151 effectively, including the integration of
those operations into our existing operations; increases in our
general and administrative expenses due to new business ventures,
which expenses may not be recoverable through additional profits; the
cyclical nature of the reinsurance business; the levels of new and
renewal business achieved; opportunities to increase writings in our
core property and specialty reinsurance and insurance lines of
business and in specific areas of the casualty reinsurance market; the
sensitivity of our business to financial strength ratings established
by independent rating agencies; the estimates reported by cedants and
brokers on pro-rata contracts and certain excess of loss contracts
where the deposit premium is not specified in the contract; the
inherent uncertainties of establishing reserves for loss and loss
adjustment expenses, particularly on longer-tail classes of business
such as casualty; our reliance on industry loss estimates and those
generated by modeling techniques; unanticipated adjustments to premium
estimates; changes in the availability, cost or quality of reinsurance
or retrocessional coverage; changes in general economic conditions;
changes in governmental regulation or tax laws in the jurisdictions
where we conduct business; our ability to assimilate effectively the
additional regulatory issues created by our entry into new markets;
the amount and timing of reinsurance recoverables and reimbursements
we actually receive from our reinsurers; the overall level of
competition, and the related demand and supply dynamics in our markets
relating to growing capital levels in the reinsurance industry;
declining demand due to increased retentions by cedants and other
factors; the impact of terrorist activities on the economy; and rating
agency policies and practices. These and other events that could cause
actual results to differ are discussed in detail in "Risk Factors"
contained in our annual report on Form 10-K for the year ended
December 31, 2006, and Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 2007 and June 30, 2007 which we have
filed with the Securities and Exchange Commission.

Montpelier undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the dates on which they are made.