Exhibit 99.1

Tower Group, Inc. Completes Acquisition of Shell Company; Purchase Includes
Active Licenses in Nine Additional States, Including New Jersey, Connecticut and
Massachusetts

    NEW YORK--(BUSINESS WIRE)--March 28, 2005--Tower Group, Inc.
(NASDAQ:TWGP) announced today that it completed the acquisition of
North American Lumber Insurance Company (NALIC), an insurance company
with nine active licenses in the following states: New Jersey,
Connecticut, Massachusetts, Rhode Island, Vermont, Maryland, Delaware,
South Carolina and Wisconsin. Concurrent with the closing, NALIC was
renamed Tower National Insurance Company. Tower Group, Inc. paid $1.05
million in cash at closing. An additional $75,000 will be paid
contingent upon license reactivation in each of Pennsylvania and Maine
within one year of the closing date. In addition, all liabilities and
assets of Tower National were transferred to a liquidating trust prior
to closing with the exception of the company's charter and insurance
licenses.
    Michael Lee, President and Chief Executive Officer of Tower Group,
Inc., commented, "We are pleased with the close of the transaction
which will enable us to expand our licensing and proceed with our
territorial expansion."

    Cautionary Note Regarding Forward-Looking Statements

    The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. This release or any
other written or oral statements made by or on behalf of the Company
may include forward-looking statements that reflect the Company's
current views with respect to future events and financial performance.
All statements other than statements of historical fact included in
this release are forward-looking statements. Forward-looking
statements can generally be identified by the use of forward-looking
terminology such as "may," "will," "plan," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or their negative or
variations or similar terminology. All forward-looking statements
address matters that involve risks and uncertainties. Accordingly,
there are or will be important factors that could cause our actual
results to differ materially from those indicated in these statements.
We believe that these factors include but are not limited to
ineffectiveness or obsolescence of our business strategy due to
changes in current or future market conditions; increased competition
on the basis of pricing, capacity, coverage terms or other factors;
greater frequency or severity of claims and loss activity, including
as a result of natural or man-made catastrophic events, than our
underwriting, reserving or investment practices anticipate based on
historical experience or industry data; the effects of acts of
terrorism or war; developments in the world's financial and capital
markets that adversely affect the performance of our investments;
changes in regulations or laws applicable to us, our subsidiaries,
brokers or customers; acceptance of our products and services,
including new products and services; changes in the availability, cost
or quality of reinsurance and failure of our reinsurers to pay claims
timely or at all; decreased demand for our insurance or reinsurance
products; loss of the services of any of our executive officers or
other key personnel; the effects of mergers, acquisitions and
divestitures; changes in rating agency policies or practices; changes
in legal theories of liability under our insurance policies; changes
in accounting policies or practices; and changes in general economic
conditions, including inflation and other factors. Forward-looking
statements speak only as of the date on which they are made, and the
Company undertakes no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.

    About Tower Group, Inc.

    Tower Group, Inc., headquartered in New York City, offers property
and casualty insurance products and services through its insurance
company and insurance service subsidiaries. Its insurance company
subsidiary, Tower Insurance Company of New York, is rated "A-"
(Excellent) by A.M. Best and offers commercial insurance products to
small to medium size businesses and personal insurance products to
individuals. Its insurance services subsidiary, Tower Risk Management,
acts as a managing general agency, adjusts claims and negotiates
reinsurance terms on behalf of other insurance companies. In March
2005, Tower Group, Inc. acquired Tower National Insurance Company.

    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