The Board of Directors of Montpelier Re Holdings Ltd. (NYSE - MRH) has announced the following capital management actions:

1. The declaration of a special dividend of $5.50 per common share and per warrant, or approximately $390 million in total. The dividend is payable on March 31st, 2005 to shareholders of record on March 15th, 2005. Subject to the rules of the New York Stock Exchange, the ex-dividend date for the special dividend will be March 11th, 2005.

2. An increase in the regular quarterly dividend for 2005, as and when declared, of 5.9%, to $0.36 per common share and per warrant.

Anthony Taylor, President and CEO, said: "These actions demonstrate that we are delivering on the promise we made at the time of our IPO, namely that we would manage our capital prudently relative to our risk exposure with a view to maximizing sustainable long-term growth in shareholder value. We prefer sticking to the tenets of our business plan and sharing its rewards with our shareholders rather than deploying our capital in business we do not understand."

In conjunction with the declaration of the special dividend the Board has determined that vested and unvested share options held by certain founding executive officers of the Company may be exercised net in exchange for unrestricted and restricted shares, respectively, on the same vesting basis as the original option. Anthony Taylor, the Company's Chairman, President and Chief Executive Officer, has agreed not to sell any of the converted shares in the two year period following the date of conversion.