HCC Insurance 8-K HCC Insurance Holdings Posts Another Strong Performance

Exhibit 99.1

HCC INSURANCE HOLDINGS POSTS ANOTHER STRONG PERFORMANCE

HOUSTON (February 22, 2011)

HCC Insurance Holdings, Inc. (NYSE: HCC)today released earnings for the fourth quarter and full year 2010.

Net earnings for the fourth quarter of 2010 were $97.3 million, compared to $84.8 million for the fourth quarter of 2009. Net earnings per diluted share were $0.84 for the fourth quarter of 2010, versus $0.74 for the same quarter of 2009. Net earnings for the full year of 2010 were $345.1 million, compared to $353.9 million for the 2009 full year. Net earnings per diluted share were $2.99 for 2010, versus $3.11 for 2009.

“Our return on average equity was 10.9% for the year. We are very pleased with this performance in an environment which remains challenging,” HCC President and Chief Executive Officer John N. Molbeck, Jr. said.

Book value per share increased 8% during the year from $26.58 to $28.67. The 2010 book value reflects dividends of $0.56 per share. This was the 14^th consecutive year in which HCC raised its dividend. Book value per share grew at a compounded rate of 13% over the last five years. The Company repurchased 1.3 million shares of its common stock during 2010, for a total cost of $35.1 million and a weighted-average cost of $26.99 per share. Currently, $265.3 million remains under its $300 million share buyback authorization.

The Company’s GAAP combined ratio for the fourth quarter of 2010 was 82.3%, compared to 85.2% for the fourth quarter of 2009. The GAAP combined ratio for the full year of 2010 was 84.6%, versus 84.0% for 2009. HCC’s paid loss ratio for the year was 59.7%, compared to a paid loss ratio of 55.8% in 2009.

The accident year combined ratio was 87.0% for the fourth quarter of 2010 and 85.6% for the full year of 2010, compared to 88.5% and 86.6% for the same periods in 2009, respectively.

“Once again our combined ratio remained excellent for the year and our accident year combined ratio of 85.6% is a reflection of our strong underwriting culture, well managed

expense ratio and the continued value of our non-correlated portfolio of businesses,” Mr. Molbeck said.

Gross written premium of HCC’s insurance company subsidiaries decreased 5% to $624.2 million for the fourth quarter of 2010, compared to $655.7 million for the same quarter of 2009. Net written premium decreased 6% to $486.7 million during the 2010 fourth quarter, compared to net written premium of $518.4 million for the 2009 fourth quarter. Net earned premium for the fourth quarter of 2010 decreased 1% to $509.8 million, versus net earned premium of $512.8 million for the same quarter of 2009. Gross written premium was essentially flat at $2.6 billion for the full year of 2010, as were net written premium and net earned premium of $2.0 billion.

During the fourth quarter of 2010, HCC had net favorable prior year reserve development of $23.9 million, compared to net favorable prior year reserve development of $16.9 million for the same period of 2009. For the full year of 2010, the Company recorded $22.7 million of net favorable prior year reserve development, compared to $53.5 million of net favorable prior year reserve development for the full year of 2009.

Investment income increased to $53.2 million during the fourth quarter of 2010, compared to $50.2 million during the fourth quarter of 2009. On a year-to-date basis, investment income grew to $203.8 million in 2010 from $192.0 million in 2009. This resulted from growth in the Company’s fixed income securities investment portfolio, partially offset by lower interest rates. The portfolio increased 12% from $4.6 billion at December 31, 2009 to $5.2 billion at December 31, 2010.

As of December 31, 2010, HCC’s fixed income securities portfolio had a weighted-average rating of AA+, a weighted-average duration of 5.5 years and an average long-term tax equivalent yield of 5.0%. As of December 31, 2010, HCC’s total investments had a weighted-average duration of 5.1 years.

Other operating income was $9.8 million for the 2010 fourth quarter, compared to $12.9 million for the same period in 2009. Other operating income was $44.8 million for the full year of 2010, compared to $82.7 million for the 2009 full year.

The Company’s liquidity position remains strong with $585.9 million of cash and short-term investments and $556.8 million of available capacity under its $575.0 million revolving loan facility at December 31, 2010. The Company generated $100.6 million and $415.2 million of cash flow from operating activities in the fourth quarter and full year 2010, respectively, compared to $165.3 million and $582.8 million for the same periods in 2009.

As of December 31, 2010, total investments were $5.7 billion, total assets were $9.1 billion, shareholders’ equity was $3.3 billion and the Company’s debt to total capital ratio was 8.3%.

2

EARNINGS GUIDANCE: HCC’s management estimates the Company will achieve net earnings of $2.75 to $3.05 per diluted share for 2011. These estimated results assume the following: gross written premium of $2.7 billion; net written premium of $2.2 billion; total revenue of $2.4 billion; a combined ratio of 85%-87%; and average fully diluted shares outstanding of 112 million shares. These assumptions do not include any provision for catastrophe losses that exceed the Company’s attritional loss assumptions on property treaty business, reserve development or capital gains or losses.

For further information about HCC’s 2010 fourth quarter and full-year earnings results, see the supplemental financial schedules that are accessible on HCC’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 Standard Time on Wednesday, February 23. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-0161. There will also be a live webcast available on a listen-only basis that can be accessed through the HCC website at http://www.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, May 6, 2011.

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 December 31, 2010, HCC had assets of $9.1 billion and shareholders’ equity of $3.3 billion. HCC’s major domestic and international insurance companies have financial strength ratings of “AA (Very Strong)” from Standard & Poor’s Corporation, “A+ (Superior)” from A.M. Best Company Inc., “AA (Very Strong)” from Fitch Ratings, and “A1 (Good Security)” by Moody’s Investors Service, Inc.

For more information about HCC, please visit http://www.hcc.com.

Contact:	Doug Busker, Director of Investor Relations
	HCC Insurance Holdings, Inc.
	Telephone: (713) 996-1192

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)

	Twelve months ended						Three months ended
	December 31,						December 31,
	2010			2009			2010			2009
Gross written premium	$	2,578,908		$	2,559,791		$	624,178		$	655,705
Net written premium		2,026,197			2,046,289			486,706			518,400
Net earned premium		2,041,924			2,037,235			509,786			512,810
Net investment income		203,819			191,965			53,216			50,225
Other operating income (a)		44,832			82,669			9,797			12,904
Total revenue (a)		2,302,254			2,318,516			576,881			583,013
Net earnings		345,096			353,868			97,299			84,792
Earnings per share (diluted)	$	2.99		$	3.11		$	0.84		$	0.74
Weighted-average shares outstanding (millions)		114.1			113.1			114.1			113.4
GAAP net loss ratio		59.4	%		59.7	%		57.0	%		59.2	%
GAAP combined ratio (a)		84.6	%		84.0	%		82.3	%		85.2	%
Paid loss ratio		59.7	%		55.8	%		67.7	%		58.4	%

	December 31,			December 31,
	2010			2009
Total investments	$	5,687,095		$	5,456,229
Total assets		9,064,082			8,834,391
Shareholders’ equity		3,296,432			3,031,183
Debt to total capital ratio		8.3	%		9.0	%
Book value per share	$	28.67		$	26.58

(a) 2009 amounts changed to be consistent with 2010 presentation.

S - 1

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

	December 31,			December 31,
	2010			2009
ASSETS
Investments:
Fixed income securities — available for sale, at fair value	$	4,999,440		$	4,538,073
Fixed income securities — held to maturity, at amortized cost		193,668			102,792
Short-term investments		488,002			810,673
Other investments		5,985			4,691
Total investments		5,687,095			5,456,229
Cash		97,857			129,460
Restricted cash and cash investments		148,547			146,133
Premium, claims and other receivables		635,867			600,332
Reinsurance recoverables		1,006,855			1,016,411
Ceded unearned premium		278,663			270,436
Ceded life and annuity benefits		58,409			61,313
Deferred policy acquisition costs		212,786			208,463
Goodwill		821,648			822,006
Other assets		116,355			123,608
Total assets	$	9,064,082		$	8,834,391
LIABILITIES
Loss and loss adjustment expense payable	$	3,471,858		$	3,492,309
Life and annuity policy benefits		58,409			61,313
Reinsurance balances payable		201,235			182,661
Unearned premium		1,045,877			1,044,747
Deferred ceding commissions		72,565			71,595
Premium and claims payable		144,495			154,596
Notes payable		298,637			298,483
Accounts payable and accrued liabilities		474,574			497,504
Total liabilities		5,767,650			5,803,208
SHAREHOLDERS’ EQUITY
Common stock		120,942			118,724
Additional paid-in capital		954,332			914,339
Retained earnings		2,257,895			1,977,254
Accumulated other comprehensive income		97,186			119,665
Treasury stock		(133,923	)		(98,799	)
Total shareholders’ equity		3,296,432			3,031,183
Total liabilities and shareholders’ equity	$	9,064,082		$	8,834,391

S - 2

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

	Twelve months ended						Three months ended
	December 31,						December 31,
	2010			2009			2010			2009
REVENUE
Net earned premium	$	2,041,924		$	2,037,235		$	509,786		$	512,810
Net investment income		203,819			191,965			53,216			50,225
Other operating income (a)		44,832			82,669			9,797			12,904
Net realized investment gain		12,104			12,076			4,207			7,224
Other-than-temporary impairment loss
Total loss		(378	)		(6,443	)		(62	)		(354	)
Portion recognized in equity, before tax		(47	)		1,014			(63	)		204
Net loss recognized in earnings		(425	)		(5,429	)		(125	)		(150	)
Total revenue (a)		2,302,254			2,318,516			576,881			583,013
EXPENSE
Loss and loss adjustment expense, net		1,213,029			1,215,759			290,384			303,815
Policy acquisition costs, net (a)		322,046			308,554			79,968			85,368
Other operating expense		256,004			259,488			66,051			63,979
Interest expense		21,348			16,164			5,441			4,348
Total expense		1,812,427			1,799,965			441,844			457,510
Earnings before income tax expense		489,827			518,551			135,037			125,503
Income tax expense		144,731			164,683			37,738			40,711
Net earnings	$	345,096		$	353,868		$	97,299		$	84,792
Basic earnings per share data:
Net earnings per share	$	3.00		$	3.14		$	0.84		$	0.75
Weighted-average shares outstanding (millions)		113.9			112.2			113.8			112.3
Diluted earnings per share data:
Net earnings per share	$	2.99		$	3.11		$	0.84		$	0.74
Weighted-average shares outstanding (millions)		114.1			113.1			114.1			113.4
Cash dividends declared, per share	$	0.560		$	0.520		$	0.145		$	0.135

(a) 2009 amounts changed to be consistent with 2010 presentation.

S - 3

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

	Twelve months ended
	December 31,
	2010			2009
Operating activities
Net earnings	$	345,096		$	353,868
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables		(38,507	)		23,432
Change in reinsurance recoverables		(2,077	)		42,521
Change in ceded unearned premium		(10,713	)		(34,107	)
Change in loss and loss adjustment expense payable		6,702			22,439
Change in reinsurance balances payable		20,609			60,057
Change in unearned premium		7,106			48,366
Change in premium and claims payable, excluding restricted cash		1,243			(98,675	)
Change in accounts payable and accrued liabilities		31,032			96,040
Stock-based compensation expense		13,018			15,628
Depreciation and amortization expense		17,380			16,221
Gain on investments		(12,168	)		(3,518	)
Other, net		36,479			40,525
Cash provided by operating activities		415,200			582,797
Investing activities
Sales of available for sale fixed income securities		239,414			551,760
Maturity or call of available for sale fixed income securities		620,884			347,794
Maturity or call of held to maturity fixed income securities		25,240			86,364
Cost of available for sale fixed income securities acquired		(1,347,285	)		(1,159,796	)
Cost of held to maturity fixed income securities acquired		(120,643	)		(59,754	)
Cost of other investments acquired		(4,977	)		—
Change in short-term investments		311,983			(297,016	)
Proceeds from sales of strategic and other investments		4,638			114,940
Payments for purchase of businesses, net of cash received		(36,348	)		(38,018	)
Proceeds from sale of subsidiaries		17,068			50,557
Other, net		(9,627	)		(16,581	)
Cash used by investing activities		(299,653	)		(419,750	)
Financing activities
Issuance of notes payable		—			296,096
Advances on line of credit		50,000			130,000
Payments on line of credit		(50,000	)		(350,032	)
Payments on convertible notes		(64,472	)		(60,210	)
Sale of common stock		29,193			19,198
Purchase of common stock		(35,124	)		(35,464	)
Dividends paid		(63,245	)		(57,437	)
Other, net		(13,502	)		(3,085	)
Cash used by financing activities		(147,150	)		(60,934	)
Net increase (decrease) in cash		(31,603	)		102,113
Cash at beginning of year		129,460			27,347
Cash at end of year	$	97,857		$	129,460

S - 4

HCC Insurance Holdings, Inc. and Subsidiaries

Gross Written Premium

(Unaudited, in thousands)

	Twelve months ended December 31,							Three months ended December 31,
	2010		2009		Change			2010			2009		Change
U.S. Property & Casualty
Aviation	$	162,539	$	176,073		(8)	%	$	40,939		$	42,160		(3)	%
E&O		81,567		109,163		(25	)		18,251			25,045		(27	)
Public Risk		64,802		66,176		(2	)		14,405			14,105		2
Other		229,567		251,996		(9	)		49,741			46,753		6
		538,475		603,408		(11	)		123,336			128,063		(4	)
Professional Liability
U.S. D&O		388,369		426,027		(9	)		121,067			136,801		(12	)
International D&O		97,960		97,977		—			28,034			30,365		(8	)
Other		109,962		115,465		(5	)		32,754			36,482		(10	)
		596,291		639,469		(7	)		181,855			203,648		(11	)
Accident & Health
Medical Stop-loss		654,335		633,573		3			166,079			160,300		4
Other		107,394		111,462		(4	)		27,865			33,810		(18	)
		761,729		745,035		2			193,944			194,110		—
U.S. Surety & Credit
Surety		171,595		159,287		8			39,458			44,619		(12	)
Credit		55,271		44,235		25			14,266			10,459		36
		226,866		203,522		11			53,724			55,078		(2	)
International
Energy		106,902		98,935		8			9,849			6,658		48
Property Treaty		74,514		284	nm				3,110			284	nm
Liability		86,681		87,142		(1	)		18,180			20,676		(12	)
Surety & Credit		75,106		75,775		(1	)		18,087			20,626		(12	)
Other		110,275		75,426		46			22,277			19,394		15
		453,478		337,562		34			71,503			67,638		6
Exited Lines		2,069		30,795	nm				(184	)		7,168	nm
Totals	$	2,578,908	$	2,559,791		1	%	$	624,178		$	655,705		(5)	%

nm — Not meaningful comparison

S - 5

HCC Insurance Holdings, Inc. and Subsidiaries

Net Written Premium

(Unaudited, in thousands)

	Twelve months ended December 31,							Three months ended December 31,
	2010		2009		Change			2010			2009			Change
U.S. Property & Casualty
Aviation	$	110,539	$	124,336		(11)	%	$	26,442		$	28,681			(8)	%
E&O		81,443		109,026		(25	)		18,187			24,971			(27	)
Public Risk		46,844		48,524		(3	)		10,209			8,877			15
Other		89,995		100,921		(11	)		26,266			20,343			29
		328,821		382,807		(14	)		81,104			82,872			(2	)
Professional Liability
U.S. D&O		288,306		316,468		(9	)		90,263			97,091			(7	)
International D&O		39,307		53,952		(27	)		11,233			16,765			(33	)
Other		73,949		76,660		(4	)		22,110			23,261			(5	)
		401,562		447,080		(10	)		123,606			137,117			(10	)
Accident & Health
Medical Stop-loss		654,335		633,571		3			166,079			160,300			4
Other		107,038		110,983		(4	)		27,774			33,691			(18	)
		761,373		744,554		2			193,853			193,991			—
U.S. Surety & Credit
Surety		164,764		153,479		7			37,416			42,977			(13	)
Credit		44,609		35,729		25			12,331			6,516			89
		209,373		189,208		11			49,747			49,493			1
International
Energy		53,063		49,435		7			1,347			(833	)		nm
Property Treaty		59,878		284	nm				(2,116	)		284		nm
Liability		79,959		78,472		2			16,549			18,831			(12	)
Surety & Credit		64,847		68,887		(6	)		13,569			18,934			(28	)
Other		66,597		55,982		19			9,232			10,794			(14	)
		324,344		253,060		28			38,581			48,010			(20	)
Exited Lines		724		29,580	nm				(185	)		6,917		nm
Totals	$	2,026,197	$	2,046,289		(1)	%	$	486,706		$	518,400			(6)	%

nm — Not meaningful comparison

S - 6

HCC Insurance Holdings, Inc. and Subsidiaries

Net Earned Premium

(Unaudited, in thousands)

	Twelve months ended December 31,							Three months ended December 31,
	2010		2009		Change			2010			2009		Change
U.S. Property & Casualty
Aviation	$	115,952	$	129,626		(11)	%	$	28,704		$	31,112		(8)	%
E&O		95,275		118,834		(20	)		21,196			28,366		(25	)
Public Risk		46,409		39,986		16			11,883			11,133		7
Other		81,877		90,993		(10	)		19,303			19,633		(2	)
		339,513		379,439		(11	)		81,086			90,244		(10	)
Professional Liability
U.S. D&O		303,028		306,621		(1	)		73,994			81,209		(9	)
International D&O		47,358		59,082		(20	)		10,609			14,283		(26	)
Other		74,840		78,831		(5	)		18,774			18,428		2
		425,226		444,534		(4	)		103,377			113,920		(9	)
Accident & Health
Medical Stop-loss		654,335		633,572		3			166,079			160,301		4
Other		105,699		107,967		(2	)		26,216			27,271		(4	)
		760,034		741,539		2			192,295			187,572		3
U.S. Surety & Credit
Surety		160,373		147,803		9			41,048			39,808		3
Credit		39,535		34,824		14			10,433			7,383		41
		199,908		182,627		9			51,481			47,191		9
International
Energy		52,671		49,099		7			13,105			14,131		(7	)
Property Treaty		47,594		51	nm				15,061			51	nm
Liability		81,887		82,137		—			21,409			20,774		3
Surety & Credit		69,264		68,162		2			15,464			17,733		(13	)
Other		64,770		56,673		14			16,676			14,285		17
		316,186		256,122		23			81,715			66,974		22
Exited Lines		1,057		32,974	nm				(168	)		6,909	nm
Totals	$	2,041,924	$	2,037,235		—	%	$	509,786		$	512,810		(1)	%

nm — Not meaningful comparison

S - 7

HCC Insurance Holdings, Inc. and Subsidiaries

Net Investment Income and Unrealized Gain

(Unaudited, in thousands)

	Twelve months ended						Three months ended
	December 31,						December 31,
	2010			2009			2010			2009
Sources of net investment income:
Fixed income securities
Taxable	$	110,517		$	106,690		$	28,101		$	27,796
Exempt from U.S. income taxes		92,297			82,760			24,712			21,171
Total fixed income securities		202,814			189,450			52,813			48,967
Short-term investments		900			1,978			269			187
Other		4,344			4,338			1,291			2,144
Total investment income		208,058			195,766			54,373			51,298
Investment expense		(4,239	)		(3,801	)		(1,157	)		(1,073	)
Net investment income	$	203,819		$	191,965		$	53,216		$	50,225
Unrealized gain on available for sale fixed income securities:
Increase (decrease) in unrealized gain for period, before tax	$	(21,677	)	$	141,685		$	(166,630	)	$	(52,185	)
Unrealized gain at:
December 31, 2010	$	134,634
September 30, 2010	$	301,264
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)

	Twelve months ended					Twelve months ended
	December 31, 2010					December 31, 2009
	Net earned		Loss			Net earned		Loss
	premium		ratio			premium		ratio
U.S. Property & Casualty
Aviation	$	115,952		55.0	%	$	129,626		56.6	%
E&O		95,275		79.2			118,834		61.5
Public Risk		46,409		61.8			39,986		66.3
Other		81,877		28.4			90,993		31.2
		339,513		56.3			379,439		53.1
Professional Liability
U.S. D&O		303,028		60.8			306,621		62.2
International D&O		47,358		60.8			59,082		53.3
Other		74,840		70.0			78,831		68.9
		425,226		62.4			444,534		62.2
Accident & Health
Medical Stop-loss		654,335		73.6			633,572		71.7
Other		105,699		71.0			107,967		80.5
		760,034		73.3			741,539		72.9
U.S. Surety & Credit
Surety		160,373		22.8			147,803		22.8
Credit		39,535		41.5			34,824		59.9
		199,908		26.5			182,627		29.9
International
Energy		52,671		22.2			49,099		25.7
Property Treaty		47,594		58.2			51	nm
Liability		81,887		43.3			82,137		25.7
Surety & Credit		69,264		41.7			68,162		50.9
Other		64,770		61.3			56,673		46.1
		316,186		45.4			256,122		36.9
Exited Lines		1,057	nm				32,974	nm
Totals	$	2,041,924		59.4	%	$	2,037,235		59.7	%

nm — Not meaningful comparison

S - 9