Exhibit 99.1

Tower Group, Inc. Enters Into Agreement to Acquire Shell Company; Purchase
Includes Licenses in New York and New Jersey

    NEW YORK--(BUSINESS WIRE)--Aug. 8, 2005--Following its shell
acquisition strategy, Tower Group, Inc. (NASDAQ:TWGP) announced today
its execution of an agreement to acquire MIIX Insurance Company of New
York (MIIX), an insurance company with licenses in New York and New
Jersey. Closing of the transaction is expected to occur by year end
and is contingent upon a variety of conditions including approval of
the transaction by the New York State Insurance Department. In the
event of closing, Tower Group will pay $225,000 in cash at closing as
well as MIIX's then outstanding statutory surplus which was
approximately $7.8 million as of December 31, 2004. MIIX has no net
liabilities for insurance losses. MIIX's assets consist of U.S.
Treasuries and cash.
    Michael Lee, President and Chief Executive Officer of Tower Group,
Inc., commented, "We are pleased with this agreement to complete what
should be our second shell acquisition this year, which would bring
the total number of insurance company subsidiaries owned by Tower
Group, Inc. to three. Upon closing, we plan to continue to expand
MIIX's licensing to other states. This transaction will enable us
to improve our capability to deliver products at different market
segments with varying pricing and coverage terms and conditions and
further support our growth through territorial expansion."

    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 Company 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 its other insurance company
subsidiary, Tower National Insurance Company (f/k/a North American
Lumber Insurance Company).

    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; the level of demand for and degree of market
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; 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.

    For more information visit Tower's website at
http://www.twrgrp.com/.

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