Exhibit 99.1

                    Tower Group, Inc. Announces the Issuance
     of $26 Million of Subordinated Debentures in Connection with Offering
                         of Trust Preferred Securities

    NEW YORK--(BUSINESS WIRE)--Dec. 15, 2004--Tower Group, Inc.
(NASDAQ: TWGP) announced today that the company intends to raise $26
million through two offerings of subordinated debentures for $13
million each. The subordinated debentures are being issued in
connection with offerings of trust preferred securities in pooled
private placements. The subordinated debentures have stated maturities
of 30 years, pay interest quarterly and are redeemable at par on or
after five years from the date of issuance. Keefe, Bruyette and Woods,
Inc. and FTN Financial Capital Markets are the placement agents with
respect to the first offering, which closed today. The interest rate
is fixed at 7.4% for the first five years and the coupon rate will
float quarterly thereafter at the three-month LIBOR interest rate plus
340 basis points.
    The second proposed placement is expected to close on or about
December 21, 2004. The interest rate will float based on the
three-month LIBOR rate plus some basis points to be determined.
    Tower Group Inc. President and CEO, Michael Lee said that, "in
connection with our plans for territorial expansion we intend to use
the proceeds to acquire and capitalize a shell insurance company with
multi-state licensing and for working capital purposes."
    This press release does not constitute an offer to sell or the
solicitation of an offer to buy any of the securities offered. The
subordinated debentures and the trust preferred securities, as well as
the securities issued by the pool, have not been registered under the
Securities Act of 1933 or any state securities laws and unless so
registered may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933 and applicable
state securities laws.

    "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding Tower
Group, Inc.'s business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties that
could cause actual results to differ materially from those expressed
or implied in the forward-looking statements. Forward-looking
statements include the expected closing date of the second proposed
placement and use of the proceeds. Such results may be impacted by
factors outside the company's control. Additional information
concerning potential risk factors that could affect the company's
future performance are described in the company's registration
statement on Form S-1 and periodic reports filed with the Securities
and Exchange Commission.

    About Tower Group, Inc.

    In operation since 1990, Tower Group Inc. is headquartered in New
York City and is the holding company for its two operating
subsidiaries, Tower Insurance Company of New York, ("TICNY") and Tower
Risk Management ("TRM"). TICNY, A.M. Best rated A- (Excellent),
develops and delivers specialized commercial lines insurance products
that provide property, liability, workers' compensation and automobile
insurance to select markets not well served by other carriers. It also
offers personal lines products that provide property and liability
insurance to homeowners throughout New York State. TRM, a non- risk
bearing insurance service company, offers managing general agency
services to underwrite risks, adjust claims and negotiate reinsurance
terms on behalf of other insurance companies. For more information
visit Tower's website at http://www.twrgrp.com/.


    CONTACT: Tower Group, Inc.
             Investor Relations:
             Andrew Colannino, 212-655-2107
             acolannino@twrgrp.com