Exhibit 10.7

                                 AMENDMENT NO. 1
                                       TO
                              AMENDED AND RESTATED
             CATASTROPHE EQUITY SECURITIES ISSUANCE OPTION AGREEMENT

     This Amendment No. 1, dated as of January 25, 2002 (this "Amendment") to
the Amended and Restated Catastrophe Equity Securities Issuance Option
Agreement, dated as of January 1, 2001 (the "Agreement"), between Trenwick Group
Ltd., a Bermuda company ("Trenwick"), on the one hand, and European Reinsurance
Company of Zurich, a corporation organized under the laws of Switzerland (the
"Option Writer"), on the other hand.

                                    RECITALS

     WHEREAS, Trenwick and Option Writer are parties to the Agreement; and

     WHEREAS, Trenwick and Option Writer desire to amend the Agreement;

     NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, Trenwick and Option Writer agree as follows:

                                    AGREEMENT


A.   Amendment

     1. The definition of "Exercise Date" is amended by deleting such definition
and inserting in its place the following definition:

     " "Exercise Date" means the date of purchase and sale of Preferred Shares
     pursuant to an exercise of the Securities Issuance Option which date shall
     be specified in the Notice of Exercise and shall be the later of (a) seven
     (7) calendar days (or thirty (30) calendar days if the delivery of a Notice
     of Exercise does not occur until after March 31, 2002) following the
     delivery of the Notice of Exercise or (b) ten (10) calendar days following
     receipt of all regulatory approvals applicable to Trenwick and Option
     Writer in connection with such purchase and sale of Preferred Shares
     (including without limitation any necessary approvals by the Bermuda
     Monetary Authority or Registrar of Companies), provided that the Exercise
     Date shall not be later than the one hundred eightieth (180th) day after
     delivery of the Notice of Exercise, or such later date, if any, as may be
     determined by alternative dispute resolution under Article 8 of this
     Agreement, which date shall be ten (10) days after the rendering of a final
     decision under Article 8."

     2. Section 2.3 of the Agreement is amended by deleting the third sentence
thereof and inserting in its place the following sentence:

     "Following delivery of a Notice of Exercise in accordance with Section
     10.2, Option Writer shall have until the end of the seven (7) calendar day
     period (or the thirty (30) calendar day period if the delivery of a Notice
     of Exercise does not occur until after


<PAGE>

     March 31, 2002) following delivery of the Notice of Exercise to investigate
     whether the conditions to exercise of the Securities Issuance Option set
     forth in Section 5.2 have been satisfied and shall, by the end of such
     seven (7) (or thirty (30), as applicable) calendar day period, if Option
     Writer determines that such conditions have not been satisfied, issue a
     Notice of Objection (as defined below); provided, however, that if the
     Exercise Date is extended for more than an additional thirty (30) days
     (beyond the initial seven (7) (or thirty (30), as applicable) day notice
     period) as described in the Definition of Exercise Date in Article 1 above,
     Option Writer shall have a period of ten (10) business days to update its
     investigation, which ten (10) business day period shall commence on the
     date which is the later of (a) the date that Trenwick certifies to Option
     Writer that all conditions to exercise of the Securities Issuance Option
     set forth in Section 5.2 have been satisfied or (b) the thirtieth (30th)
     day preceding the actual Exercise Date."

     3. Section 2.3 of the Agreement is further amended by deleting the fifth
sentence thereof and inserting in its place the following sentence:

     "In the event that Option Writer determines that the conditions for
     exercise of the Securities Issuance Option have not been met, Option Writer
     shall deliver a written notice of objection to exercise of the Securities
     Issuance Option (the "Notice of Objection") to Trenwick within such seven
     (7) (or thirty (30), as applicable) calendar day period or the ten (10)
     business day update period described above, as applicable."

     4. Section 5.2 of the Agreement is amended by adding as a new paragraph
immediately following the existing clause (h) the following sentences:

     "In addition to the foregoing conditions, the right of Trenwick to exercise
     the Securities Issuance Option (or any increment of the Securities Issuance
     Option) shall be subject to Trenwick and Option Writer having obtained all
     consents and approvals necessary for the authorization and issuance of the
     Preferred Shares, the conversion of the Preferred Shares into Trenwick
     Common Stock, and the authorization and issuance of such Trenwick Common
     Stock, of any applicable regulatory body or agency, including without
     limitation the approval of any applicable insurance regulatory body or
     agency (whether of Bermuda, the U.S., any state of the U.S., or any other
     applicable jurisdiction), but excluding any consents or approvals required
     in connection with the securities filings referenced in Section 6.6.
     Notwithstanding the foregoing, if (a) any applicable regulatory body shall
     for any reason decline to approve the conversion of the Preferred Shares
     and/or the issuance of Trenwick Common Stock pursuant to such conversion,
     but shall approve the authorization and issuance of the Preferred Shares,
     or (b) any consent, approval or other matter necessary for conversion of
     the Preferred Shares into Trenwick Common Stock is of such a nature that it
     cannot be obtained or achieved until at or about the time of such
     conversion, then such consent, approval or other matter shall not be a
     condition to exercise of the Securities Issuance Option."

     5. Section 6.7 of the Agreement is amended by deleting it in the entirety
and inserting in its place the following:


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<PAGE>

     "6.7 Regulatory Filings. Trenwick, Option Writer and their respective
     Affiliates shall cooperate with each other and (a) promptly prepare and
     file all necessary documentation, (b) effect all necessary applications,
     notices, petitions, filings and other documents and (c) use their
     respective reasonable best efforts to obtain all necessary permits,
     consents, approvals and authorizations of all regulatory bodies or agencies
     necessary or advisable to consummate the transactions contemplated by this
     Agreement, including without limitation, the authorization and issuance of
     the Preferred Shares, the conversion of the Preferred Shares into Trenwick
     Common Stock, and the authorization and issuance of such Trenwick Common
     Stock. Each of Trenwick and Option Writer shall have the right to review
     and approve in advance all characterizations of the information relating to
     each such party which appear in any filing or submission made by the other
     party in connection with the transactions contemplated by this Agreement.
     Trenwick, Option Writer and their respective Affiliates shall consult with
     each other prior to proposing or entering into any stipulation or agreement
     with any regulatory body or agency in connection with any permit, consent,
     approval or authorizations of any regulatory body or agency to be obtained
     in connection with the transactions contemplated by this Agreement and
     Trenwick, Option Writer and their respective Affiliates shall not propose
     or enter into any such stipulation or agreement without the other party's
     prior written consent, which consent shall not be unreasonably withheld."

     6. The Agreement is amended by adding as a new Section 6.17 immediately
following the existing Section 6.16 the following:

     "6.17 Escrow Account. In the event that, following delivery of a Notice of
     Exercise pursuant to Section 2.3, the applicable notice period set forth in
     Section 2.3 shall have elapsed and all of the conditions to exercise of the
     Securities Issuance Option set forth in Section 5.2 have been satisfied
     other than receipt by Option Writer of the regulatory approvals required to
     be obtained by Option Writer by the last paragraph of Section 5.2, Option
     Writer shall deposit into an escrow account with a financial institution
     mutually satisfactory to Option Writer and Trenwick (the "Escrow Account")
     pursuant to the terms of an escrow agreement in a form mutually agreed upon
     by Option Writer and Trenwick the aggregate Preferred Share Purchase Price
     for the Preferred Shares to be issued pursuant to the exercise of the
     Securities Issuance Option. The proceeds of the Escrow Account shall be
     solely subject to, and shall be released to Trenwick upon, the satisfaction
     of the condition set forth in the last paragraph of Section 5.2, which
     shall be determined jointly by Trenwick and Option Writer in good faith.
     All interest and fees related to the Escrow Account shall be credited to
     and deducted from the Escrow Account. Alternatively, the Option Writer may
     provide Trenwick with a letter of credit from a financial institution
     reasonably satisfactory to Trenwick and Option Writer in an amount equal to
     the aggregate Preferred Share Purchase Price, or a portion thereof, with
     the remaining balance, if any, deposited into the escrow account in cash.
     All fees and expenses related to such letter of credit shall be borne
     solely by Option Writer."


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<PAGE>

B.   Miscellaneous Provisions

     1. This Amendment is limited as specified and shall not constitute an
amendment, modification, acceptance or waiver of any other provision of the
Agreement or any other agreement between Trenwick and Option Writer.

     2. This Amendment and the rights and obligations of the parties hereunder
shall be governed by and construed in accordance with the laws of Bermuda
(without regard to any choice of law or conflict of law rules that would cause
the application of any laws or rules of any jurisdiction other than Bermuda).

     3. This Amendment shall become effective on the date (the "Amendment
Effective Date") when Trenwick and Option Writer shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
(including by way of telecopier) the same to the other party.

     4. From and after the Amendment Effective Date, all references in the
Agreement (including any exhibit or schedule related thereto) shall be deemed to
be references to the Agreement as modified hereby.


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<PAGE>

     IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed and delivered as of the date first above written.



                                   TRENWICK GROUP LTD.


                                   By:  /s/ JAMES F. BILLETT, JR.
                                      ---------------------------------------
                                      Name:  James F. Billett, Jr.
                                      Title: Chairman, President and
                                              Chief Executive Officer



                                   By:  /s/ COLEMAN D. ROSS
                                      ---------------------------------------
                                      Name:  Coleman D. Ross
                                      Title: Executive Vice President and
                                              Chief Financial Officer



                                   EUROPEAN REINSURANCE COMPANY
                                   OF ZURICH


                                   By:  /s/ J. SCOTT BRADLEY
                                      ---------------------------------------
                                      Name:  J. Scott Bradley
                                      Title: Member of Senior Management




                                   By:  /s/ DAVID R. WHITING
                                      ---------------------------------------
                                      Name:  David R. Whiting
                                      Title: Member of Senior Management