Exhibit 99.1

                     [NATIONAL INDEMNITY COMPANY LETTERHEAD]

November 1, 2002

Mr. Michael Watson
Trenwick Managing Agents Limited
No. 2 Minster Court
Mincing Lane
London EC3R 7FL
England

Re:   Agreement between National Indemnity Company and
      Trenwick Managing Agents Limited ("Trenwick")

Dear Mr. Watson:

This will confirm the terms that we have agreed today. In consideration of
Trenwick's immediate payment to National Indemnity Company in the amount of
(pound)3,000,000 (British pounds sterling three million), National Indemnity
Company shall extend to Trenwick the option to have National Indemnity Company
increase its share of the capacity of Trenwick's syndicates at Lloyds up to an
aggregate of (pound)100 million (British pounds sterling one hundred million) in
respect of aviation business only and in respect of Trenwick's 2003 Lloyd's year
of account business only. The capacity shall be provided in a structure and
format to be mutually agreed by the parties and at terms no less favorable to
Trenwick than the original terms of the existing 2002 year of account Limited
Liability Quota Share and Qualifying Quota Share reinsurance agreements with
National Indemnity Company. In addition, National Indemnity Company will, at
Trenwick's option, provide a Qualifying Quota Share of up to (pound)30 million
in respect of aviation business only and in respect of Trenwick's 2003 Lloyd's
year of account business. The option fee shall be effected by adjusting the
terms of the existing 2002 Qualifying Quota Share agreement between Syndicate
839 and National Indemnity Company, payable by November 6, 2002, and shall be
non-refundable upon receipt.

In order to exercise this option, Trenwick must notify National Indemnity
Company of its acceptance in writing on or before December 21, 2002. The option
shall automatically expire if National Indemnity Company has not received
written notice by that date.

Any press release, public statement or similar advertisement of this arrangement
by Trenwick that refers to or suggests National Indemnity Company's involvement
in this arrangement shall be mutually pre-approved by the parties.



If your understanding of our agreement is completely consistent with the
foregoing, please confirm our agreement by counter-signing this letter and
returning it to me.

Very truly yours,


/s/ Brian G. Snover
- --------------------------------
Brian G. Snover
Vice President


ACCEPTED AND AGREED:

TRENWICK MANAGING AGENTS LIMITED


By: /s/  Michael C. Watson
   -----------------------------
Name:  Michael C. Watson
Title: Chairman and CEO


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