SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    --------

                                    FORM 10-Q
                                    --------

(X)      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934.  For the  quarterly  period ended  September  30,
         2000.

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934 for the transition
         period from                to                  .
                     -------------      ----------------
                         Commission file number 1-16089


                               TRENWICK GROUP LTD.

             (Exact name of registrant as specified in its charter)

                                  -------------
         Bermuda                                                 98-0232340
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                     Continental Building, 25 Church Street
                             Hamilton HM12, Bermuda
               (Address of principal executive offices) (zip code)
                                  -------------

Registrant's telephone number, including area code: 441-292-4985

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [ ] No [X]


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date.

  Description of Class                                 Shares Outstanding
                                                       as of  November 13, 2000
  ---------------------                                ------------------------
Common Shares - $.10 par value                                36,668,594



<PAGE>


                               TRENWICK GROUP LTD.
                               INDEX TO FORM 10-Q

                         PART I - FINANCIAL INFORMATION

                                                                           Page
    ITEM 1.      Unaudited Consolidated Financial Statements
                Consolidated Balance Sheet
                 September 30, 2000 and December 31,1999..................... 3

                 Consolidated Statement of Operations and Comprehensive
                 Income Three Months and Nine Months ended
                 September 30, 2000 and 1999................................. 4

                 Consolidated Statement of Changes in Common
                 Shareholders' Equity Three Months and
                 Nine Months ended September 30, 2000 and 1999............... 5

                 Consolidated Statement of Cash Flows
                 Nine Months ended September 30, 2000 and 1999............... 6

                 Notes to Unaudited Consolidated Financial Statements........ 7

    ITEM 2.      Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.........................20


                           PART II - OTHER INFORMATION

    ITEM 6.      Exhibits and Reports on Form 8-K............................41

    Signatures...............................................................43



                                       2
<PAGE>


Part I. Financial Information
Item 1 - Financial Statements
<TABLE>
<CAPTION>

                               Trenwick Group Ltd.
                           Consolidated Balance Sheet
                (Expressed in thousands of United States dollars)
                                    Unaudited
<CAPTION>
                                                                               September 30,      December 31,
                                                                                    2000               1999
                                                                               --------------    ---------------
<S>                                                                              <C>                <C>

Assets:Debt securities available for sale, at fair value
  (amortized cost: $1,742,294 and $549,553)                                      $1,738,500         $539,727
Equity securities available for sale, at fair value (cost: $117,843 and $0)         117,843                -
Investments held by Lloyd's syndicates                                              163,915                -
                                                                                 ------------       ----------
   Total investments                                                              2,020,258          539,727
Cash and cash equivalents                                                           122,286           19,864
Cash and cash equivalents held by Lloyd's syndicates                                 75,992                -
Accrued investment income                                                            33,892           12,215
Premiums in the course of collection                                                502,329           78,424
Reinsurance recoverable balances, net                                               723,359           17,776
Prepaid reinsurance premiums                                                        142,643           11,137
Deferred policy acquisition costs                                                    96,790            8,470
Deposits                                                                             21,222           32,742
Net deferred income taxes                                                           123,124                -
Other assets                                                                        150,443            5,813
                                                                                 ------------       ----------
        Total assets                                                             $4,012,338         $726,168
                                                                                 ============       ==========
Liabilities:
Unpaid claims and claims expenses                                                $2,253,360         $190,352
Unearned premium income                                                             499,129           49,895
Indebtedness                                                                        266,944                -
Other liabilities                                                                   198,535           37,055
                                                                                 ------------       ----------
Total liabilities                                                                 3,217,968          277,302
                                                                                 ------------       ----------
Minority interest:
Subsidiary company-obligated mandatorily redeemable preferred
  capital securities of subsidiary trust holding solely
  junior subordinated debentures of U.S. subsidiary                                  86,900                -
Minority interest in preferred shares of Bermuda subsidiary                          75,000           75,000
Minority interest in common shares of Bermuda subsidiary                                  -           86,906
                                                                                 ------------       ----------
Total minority interest                                                             161,900          161,906
                                                                                 ------------       ----------

Common shareholders' equity:
Common shares, $0.10 par value; 36,668,594 and
  15,603,262 shares issued and outstanding                                            3,667            1,560
Additional paid in capital                                                          574,748          235,349
Deferred compensation under share award plan                                           (310)            (447)
Retained earnings                                                                    58,159           58,040
Accumulated other comprehensive income (loss)                                        (3,794)          (7,542)
                                                                                 ------------       ----------
Total common shareholders' equity                                                   632,470          286,960
                                                                                 ------------       ----------
Total liabilities, minority interest and common shareholders' equity             $4,012,338         $726,168
                                                                                 ============       ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                               Trenwick Group Ltd.
                    Consolidated Statement of Operations and
             Comprehensive Income (Expressed in thousands of United
                States dollars, except share and per share data)
                                    Unaudited


                                                                    Three Months Ended                  Nine Months Ended
                                                                      September 30,                       September 30,
                                                                -----------------------------      --------------------------------
                                                                     2000              1999             2000              1999
                                                                -------------      ----------      ------------      ------------
<S>                                                                 <C>              <C>               <C>             <C>
Net premiums earned                                                 $26,751          $21,362           $82,739           $91,486
Net investment income                                                 9,591            8,530            27,778            25,893
Net realized investment gains (losses)                                  270          (1,127)           (1,916)           (1,577)
Foreign currency gains (losses)                                       (426)              218              (53)             (335)
                                                                -------------      ----------      ------------      ------------
Total revenues                                                       36,186           28,983           108,548           115,467
                                                                -------------      ----------      ------------      ------------
Expenses:
Claims and claims expenses incurred                                  15,924           25,568            69,190           100,561
Policy acquisition costs                                              5,621            3,409            16,269            14,496
Underwriting expenses                                                 3,264            3,467            10,387            10,981
General and administrative expenses                                     424              437             3,293               717
Interest expense and dividends on preferred
   stock of subsidiary                                                1,945            2,012             5,838             6,172
                                                                -------------      ----------      ------------      ------------
Total expenses                                                       27,178           34,893           104,977           132,927
                                                                -------------      ----------      ------------      ------------
Income (loss) before other minority interest
   and income taxes                                                   9,008          (5,910)             3,571          (17,460)
Minority interest in net income (loss) of subsidiary                  2,097          (1,034)               839           (4,059)
                                                                -------------      ----------      ------------      ------------
Income (loss) before income taxes                                     6,911          (4,876)             2,732          (13,401)
Income taxes                                                              -                -                 -                 -
                                                                -------------      ----------      ------------      ------------
Net income (loss)                                                    $6,911         $(4,876)            $2,732         $(13,401)
                                                                =============      ==========      ============      ============
Basic and diluted earning (loss) per share                            $0.44          $(0.31)             $0.17           $(0.85)
                                                                =============      ==========      ============      ============
Comprehensive income (loss):
Net income (loss)                                                    $6,911         $(4,876)            $2,732         $(13,401)
                                                                -------------      ----------      ------------      ------------
Other comprehensive income (loss):
   Unrealized investment gains (losses)                               3,819            (393)             3,149          (13,159)
   Less: reclassification adjustments for losses
     (gains) included in net income (loss)                            (206)              865             1,466             1,210
                                                                -------------      ----------      ------------      ------------
Total other comprehensive income (loss)                               3,613              472             4,615          (11,949)
                                                                -------------      ----------      ------------      ------------
Comprehensive income (loss)                                         $10,524         $(4,404)            $7,347         $(25,350)
                                                                =============      ==========      ============      ============
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       4

<PAGE>

<TABLE>
<CAPTION>


                               Trenwick Group Ltd.
        Consolidated Statement of Changes in Common Shareholders' Equity
                (Expressed in thousands of United States dollars)
                                    Unaudited

                                                                         Three Months Ended                Nine Months Ended
                                                                           September 30,                     September 30,
                                                                   -------------------------------    ----------------------------
                                                                       2000              1999            2000            1999
                                                                   --------------    -------------    ------------    ------------
<S>                                                                    <C>               <C>             <C>             <C>
Common shareholders' equity, beginning of period                        $281,579         $311,804        $286,960        $349,567

Common shares, $0.10 par value,
   and additional paid in capital:
Issuance of 1,120;  3,065;  21,532 and 13,450  shares
 of LaSalle Re Holdings for cash under employee
   stock purchase plan                                                        13               52             247             224
Issuance of 0; 3,643; 653 and 58,643 shares of LaSalle
   Re Holdings under employee compensation plan                                -               64               7             865
Compensation expense recognized under
   employee program                                                          200                -             243               -
Exercise of options to acquire shares of
   LaSalle Re Holdings                                                         8                -               8               -
Exercise of options to acquire shares of subsidiary                          105                -             105               -
Purchase of 253,000 shares from minority interest                              -                -               -          (3,275)
Equity put option premiums, net of minority interest                        (316)           (1,420)          (631)         (1,420)
Change in minority interest                                                 (925)              253            (684)             -
Issuance of 4,797,649 shares to acquire
   minority interest in subsidiary                                        78,171                -          78,171               -
Issuance of 16,236,551 shares to acquire
   Trenwick Group Inc.                                                   270,980                -          270,980              -
Acquisition costs                                                         (6,940)                -          (6,940)             -

Deferred compensation under share award plan:
Restricted common shares awarded                                               -                -               -            (659)
Compensation expense recognized,
   net of minority interest                                                   68              143             208             143
Change in minority interest                                                    2                -               2               -
Acquisition of minority interest                                             (73)                -            (73)              -

Retained earnings:
Net income (loss)                                                          6,911           (4,876)           2,732        (13,401)
Dividends on common shares of LaSalle Re Holdings                              -                -               -         (11,711)
Repurchase of exercised share options in subsidiary                          (42)               -             (41)              -
Repurchase of options to acquire shares of subsidiary                          -                -          (2,396)             (1)
Change in minority interest                                                  (16)              705           (176)         (1,186)

Accumulated other comprehensive income:
Unrealized gain (loss) in period, net of minority interest                 3,613              472           4,615         (11,949)
Change in minority interest                                                   23                -              24               -
Acquisition of minority interest                                            (891)               -            (891)              -
                                                                   --------------    -------------    ------------    ------------
Common shareholders' equity, end of period                              $632,470         $307,197        $632,470        $307,197
                                                                   ==============    =============    ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       5

<PAGE>


<TABLE>
<CAPTION>

                               Trenwick Group Ltd.
                      Consolidated Statement of Cash Flows
                (Expressed in thousands of United States dollars)
                                    Unaudited

                                                                              Nine Months Ended
                                                                                September 30,
                                                                    --------------------------------------
                                                                          2000                  1999
                                                                    ---------------      -----------------
<S>                                                                    <C>                    <C>
Cash flows from operating activities:
Net income (loss)                                                         $2,732              $ (13,401)
Adjustments to reconcile net income (loss) to cash
   provided by operating activities:
      Amortization of premium on investments, net                           (879)                   (34)
      Net realized investment losses                                        1,916                 1,577
      Unrealized loss (gain) on foreign exchange                           (1,220)                  203
      Minority interest in net income of subsidiaries                       5,761                   863
Changes in assets and liabilities, net of effect from
   purchase of subsidiary:
     Accrued investment income                                               587                  1,910
     Premiums in the course of collection                                (16,780)               (26,256)
     Reinsurance recoverable balances                                     10,395                 (9,100)
     Prepaid reinsurance premiums                                         (6,545)               (11,408)
     Deferred policy acquisition costs                                    (2,921)                (1,780)
     Other assets                                                          3,013                 (1,993)
     Unpaid claims and claims expenses                                   (11,777)                45,942
     Unearned premium income                                              15,933                 19,915
     Other liabilities                                                     5,958                 16,282

                                                                    ---------------      -----------------
Cash provided by operating activities                                      6,173                 22,720
                                                                    ---------------      -----------------
Cash flows from investing activities:

Purchases of debt securities                                           (206,856)              (215,297)
Sales of debt securities                                                 197,979                226,903
Cash acquired in purchase of subsidiary                                  188,917                      -

                                                                    ---------------      -----------------
Cash provided by investing activities                                    180,040                 11,606
                                                                    ---------------      -----------------
Cash flows from financing activities:

Issuance of shares                                                         1,124                    721
Dividends paid on preferred shares of LaSalle Re Holdings                 (4,922)                (4,922)
Dividends paid on common shares of LaSalle Re Holdings                         -                (22,853)
Share and option repurchases                                              (3,176)                      -
Equity put option premium                                                   (825)                (1,850)

                                                                    ---------------      -----------------
Cash applied to financing activities                                      (7,799)               (28,904)
                                                                    ---------------      -----------------
Change in cash and cash equivalents                                      178,414                  5,422

Cash and cash equivalents, beginning of period                            19,864                 10,503

                                                                    ---------------      -----------------
Cash and cash equivalents, end of period                                $198,278                $15,925
                                                                    ===============      =================

</TABLE>

        The accompanying notes are an integral part of these statements.

                                       6
<PAGE>



                               TRENWICK GROUP LTD.

              Notes to Unaudited Consolidated Financial Statements

1.       Organization and Summary of Significant Accounting Policies

     Organization

     Trenwick Group Ltd.  ("Trenwick" or the  "Company"),  is a Bermuda  holding
     company whose principal subsidiaries  underwrite insurance and reinsurance.
     Trenwick's  principal  operating  subsidiaries  as of  September  30,  2000
     include LaSalle Re Limited ("LaSalle Re"), Trenwick  International  Limited
     ("Trenwick  International"),  Chartwell  Managing Agents ("CMA"),  Trenwick
     America  Reinsurance   Corporation   ("Trenwick  America  Re"),   Chartwell
     Insurance Company ("Chartwell Insurance"), The Insurance Corporation of New
     York ("INSCORP") and Dakota Specialty Insurance Company ("Dakota").

     Trenwick was not a public company prior to September 27, 2000. On September
     27, 2000, Trenwick Group Inc., LaSalle Re Holdings Limited,  LaSalle Re and
     Trenwick completed a business combination in which shareholders of Trenwick
     Group Inc.,  LaSalle Re Holdings  Limited  and LaSalle Re  exchanged  their
     shares on a one-for-one basis for newly-issued shares of Trenwick.  LaSalle
     Re Holdings  Limited has been  determined to be the accounting  acquiror in
     the business combination,  and as such the financial statements reflect the
     historical  results of  operations  of LaSalle Re Holdings  Limited and the
     combined  balance  sheet of  Trenwick  Group Inc.  and  LaSalle Re Holdings
     Limited.

     LaSalle  Re,  located  in  Hamilton,  Bermuda,  primarily  writes  property
     catastrophe reinsurance on a worldwide basis.

     Trenwick   International,   located  and  domiciled  in  London,   England,
     underwrites  specialty insurance and reinsurance of risks primarily located
     outside the U.S. Trenwick International is authorized to write insurance in
     over 30  countries  and  participates  in the London  market for  worldwide
     reinsurance.

     CMA is a managing  agency at Lloyd's and manages three  Lloyd's  syndicates
     for the 2000 year of account. CMA is domiciled in England and, as a Lloyd's
     managing  general agent,  is subject to regulation  and  supervision by the
     Council of Lloyd's. Trenwick, through corporate subsidiaries,  participates
     in the underwriting of Lloyd's syndicates managed by CMA by providing funds
     at  Lloyd's,  primarily  in  the  form  of  letters  of  credit  supporting
     underwriting   capacity.   The  Lloyd's   syndicates   in  which   Trenwick
     participates underwrite aviation, marine and non-marine risks.

     Trenwick America Re, located in Stamford,  Connecticut,  reinsures property
     and casualty risks primarily written by U.S. insurance companies.  Trenwick
     America Re underwrites treaty reinsurance. Trenwick America Re is domiciled
     in Connecticut and is licensed, authorized or approved to write reinsurance
     in all 50 states and the District of Columbia.

                                       7
<PAGE>


     Chartwell Insurance,  located in Stamford,  Connecticut,  underwrote treaty
     reinsurance for casualty,  property, marine and aviation risks prior to its
     acquisition by Trenwick Group Inc. Chartwell  Insurance will be used by the
     Company to underwrite primary insurance in the future.  Chartwell Insurance
     is domiciled in  Connecticut  and is  licensed,  authorized  or approved to
     write insurance in 29 states and the District of Columbia.

     INSCORP,  located in Jericho, New York, is a primary insurance company that
     develops  property  and  casualty   insurance  programs  through  specialty
     production  sources  focusing on a specific line of business and geographic
     region.  INSCORP is domiciled in New York and is  licensed,  authorized  or
     approved to transact  business in all 50 states,  the  District of Columbia
     and Canada.

     Dakota,  located in Stamford,  Connecticut,  is an approved  surplus  lines
     insurer.  It is licensed,  authorized  or approved to write  insurance on a
     surplus lines basis in 34 states and the District of Columbia.

     Basis of Presentation

     The interim consolidated financial statements include those of Trenwick and
     its  subsidiaries  and have been  prepared  in  conformity  with  generally
     accepted  accounting  principles in the U.S.  applied on a basis consistent
     with prior  periods.  Certain items in the financial  statements  have been
     reclassified to conform with the 2000 presentation.

     The interim consolidated  financial  statements are unaudited;  however, in
     the opinion of management,  the interim  consolidated  financial statements
     include all adjustments,  consisting only of normal recurring  adjustments,
     necessary  for a fair  statement  of the results  for the interim  periods.
     These  interim  statements  should  be read in  conjunction  with  the 1999
     audited  financial  statements  and  related  notes  included in the Annual
     Report on Form 10-K of  LaSalle Re  Holdings  Limited  for the fiscal  year
     ended September 30, 1999.

     Management is required to make  estimates and  assumptions  that affect the
     reported  amounts of assets and  liabilities  and  disclosure of contingent
     assets and  liabilities  at the date of the  financial  statements  and the
     reported  amounts of revenues and  expenses  during the  reporting  period.
     Actual  results  could  differ from those  estimates.  The  following  is a
     summary of significant accounting policies.

     Investments and Cash Equivalents

     Trenwick has classified all of its debt and equity securities as "available
     for sale" and  reported  them at fair value with net  unrealized  gains and
     losses  included in other  comprehensive  income,  net of related  deferred
     income  taxes.  The fair value of debt and equity  securities  is estimated
     using quoted market  prices  or  broker  dealer  quotes.  Cash  equivalents
     represent investments with maturities  at date  of purchase of three months
     or less and are carried at cost which approximates fair value.

                                       8
<PAGE>


     Investments  in  companies in which the Company has the ability to exercise
     significant  influence  over the operating  and  financial  policies of the
     investees are accounted for under the equity method.  In addition,  limited
     partnerships  in which the  Company  holds  greater  than 3%  interest  are
     accounted for under the equity method.

     Realized gains or losses on  disposition  of investments  are determined on
     the  basis  of  the  specific  identification  method.   Investment  income
     consisting  of dividends  and  interest,  net of  investment  expenses,  is
     recognized  in  income  when  earned.  The  amortization  of  premiums  and
     accretion  of  discount  for debt  securities  is  computed  utilizing  the
     interest  method.  The effective  yield utilized in the interest  method is
     adjusted when sufficient information exists to estimate the probability and
     timing of prepayments on mortgage-backed and asset-backed  securities.  The
     net  investment  in the  security is adjusted to the amount that would have
     existed had the new effective  yield been applied since the  acquisition of
     the security and that adjustment is included in net investment income.

     Revenues

     Insurance and reinsurance premiums are earned (net of reinsurance ceded) on
     a pro-rata basis over the related contract period.  Unearned premium income
     represents the portion of premiums  applicable to the unexpired  portion of
     premium coverage with renewal dates later than year-end.  Such reserves are
     computed by pro-rata methods for direct business and are established  based
     on reports  received  from ceding  companies for  reinsurance.  Premiums on
     contracts  are accrued on an estimated  basis  throughout  the term of such
     contracts.  These  estimates  may change in the near term.  Retrospectively
     rated and other  experience rated  reinsurance  contracts are estimated and
     accrued for based on the  difference  between  total costs before and after
     the  experience  under the contract (the  with-and-without  method).  These
     estimates  of  experience  to date  are  based  on  statistical  data  with
     subsequent adjustments recorded in the period in which they become known.

     Deposits

     Reinsurance  contracts that do not meet insurance  accounting risk transfer
     requirements  are  classified  as deposits.  These  deposits are treated as
     financing  transactions and are credited or charged with interest income or
     expense according to contract terms.

     Policy Acquisition Costs

     Policy  acquisition costs are stated net of policy  acquisition costs ceded
     and primarily  consist of commissions  and brokerage  expenses  incurred at
     policy or contract  issue date.  These costs vary with,  and are  primarily
     related to, the acquisition of business and are deferred and amortized over
     the  period in which the  related  premiums  are  earned.  Deferred  policy
     acquisition  costs are reviewed  periodically to determine that they do not
     exceed  recoverable  amounts  after  allowing  for  anticipated  investment
     income.


                                       9
<PAGE>

     Reserve for Unpaid Claims and Claims Expenses

     Claims are  recorded as  incurred  so as to match such costs with  premiums
     over the contract  periods.  The amount provided for unpaid claims consists
     of any unpaid  reported  claims and estimates for incurred but not reported
     claims,  net of salvage and subrogation.  The estimates for claims incurred
     but not reported were developed  based on the Company's  historical  claims
     experience  and an  actuarial  evaluation  of expected  claims  experience.
     Insurance liabilities are based on estimates and the ultimate liability may
     vary from such estimates.  Any adjustments to these estimates are reflected
     in income when known.

     Income Taxes

     Income  taxes  are  provided  based on  income  reported  in the  financial
     statements.  Deferred  income  taxes  are  provided  based on an asset  and
     liability  approach which requires the  recognition of deferred  income tax
     assets  and  liabilities  for  the  expected  future  tax  consequences  of
     temporary  differences between the financial statement carrying amounts and
     the tax bases of assets and liabilities.

     Premises and Equipment

     Premises and equipment,  including leasehold improvements,  are included in
     other  assets  in the  accompanying  consolidated  balance  sheet  and  are
     recorded at cost and are amortized or depreciated  using the  straight-line
     method over their useful lives.

     Foreign Exchange

     The assets and liabilities of foreign operations whose functional  currency
     is other than the U.S.  dollar are  translated  at the rate of  exchange in
     effect  at the  balance  sheet  date.  Revenues  and  expenses  of  foreign
     operations  are  translated at the average  exchange rates during the year.
     The effect of the translation  adjustments for foreign  operations,  net of
     applicable  deferred income taxes, is recorded as a cumulative  translation
     adjustment  in  accumulated  other   comprehensive   income  within  common
     shareholders'  equity.  Investments  denominated in foreign  currencies are
     translated  into the U.S dollar  using the rate of  exchange at the balance
     sheet  date  and  unrealized  gains  and  losses  on  translation,  net  of
     applicable  deferred  income  taxes,  are  recorded to other  comprehensive
     income.  Foreign  currency  transaction  gains and losses are  included  in
     income.

     Accounting for Derivative Instruments and Hedging Activities

     Effective  January 1, 2001,  Trenwick  expects to adopt the new  accounting
     standard,  "Accounting for Derivative  Instruments and Hedging Activities,"
     which  requires all  derivatives  to be  recognized on the balance sheet at
     fair value.  The Company is reviewing the impact of the  implementation  of
     the  standard  on its  financial  statements.  Because  the  Company has no
     significant  derivative  instruments  or  hedging  activities,   management
     believes the impact will not be material.

                                       10
<PAGE>


2.   Acquisitions

     On September 27, 2000 the Company, Trenwick Group Inc., LaSalle Re Holdings
     Limited and  LaSalle Re  completed a business  combination  (the  "Business
     Combination").  Under the terms of the  Business  Combination,  the  common
     shareholders  of  Trenwick  Group  Inc.,  LaSalle Re  Holdings  Limited and
     LaSalle Re exchanged their shares on a one-for-one  basis for shares in the
     Company.  The  Business  Combination  was  accounted  for as a purchase  of
     Trenwick Group Inc. and the outstanding  minority interest of LaSalle Re by
     LaSalle Re Holdings Limited.

     The Company is a newly  formed  Bermuda  holding  company that now has five
     principal operating units. Trenwick America Re provides reinsurance to U.S.
     insurance companies for property and casualty risks. Trenwick International
     underwrites  treaty  and  facultative  reinsurance  as  well  as  specialty
     insurance  on a  worldwide  basis.  LaSalle Re is a property  and  casualty
     reinsurer  writing  worldwide  specialist  products  with  an  emphasis  on
     catastrophe  coverage.  Canterbury  Financial Group  underwrites  specialty
     property and casualty primary  insurance  programs through managing general
     agents.  Chartwell Managing Agents manages three underwriting syndicates at
     Lloyds.

     Described  below is the purchase price of the business  combination and the
     related fair value of assets  acquired (in thousands,  except share and per
     share data).

  Trenwick's outstanding shares                                    16,236,551
  LaSalle Re Minority shares                                        4,797,649
  Trenwick's average price per common share                             15.76
  Total consideration for common shares                              $331,499
  Total consideration for stock options                                 9,748
  Acquisition costs                                                     6,940
  Total purchase price                                                348,187
  Less: Fair value of assets acquired
           Trenwick                                                  (237,804)
            LaSalle Re minority interest                              (89,403)
  Goodwill                                                            $20,980

     The  acquisition  has been  accounted  for  using  the  purchase  method of
     accounting and,  accordingly,  the purchase price has been allocated to the
     assets  purchased  and the  liabilities  assumed based on the estimate fair
     values at the date of  acquisition.  The excess of the purchase  price over
     the estimated fair value of the net assets of $20,980,0000 million has been
     recorded as goodwill,  which is being  amortized  on a straight  line basis
     over 25 years.


                                       11
<PAGE>

     All assets and  liabilities of Trenwick Group Inc. are  consolidated in the
     balance  sheet as of  September  27,  2000 and the  operating  results  are
     included commencing September 28, 2000.

     The following  unaudited pro forma  consolidated  results of operations for
     the nine month  period  ended  September  30, 2000 and  September  30, 1999
     assumes  the  acquisition  had taken place on January 1, of each period (in
     thousands except per share data).

<TABLE>
<CAPTION>

                                                                  9/30/00           9/30/99
                                                              ----------------    -------------
<S>                                                               <C>                 <C>
Net premiums earned                                               $559,202            $275,133
Total revenue                                                      677,468             341,937
Income (loss) before extraordinary items                           (48,448)            (26,748)
Net income (loss)                                                  (49,273)            (26,748)
Basic earnings (loss) per common share                              $(1.36)             $(0.87)
Diluted earnings (loss) per common share                            $(1.36)             $(0.87)
</TABLE>

     The above  unaudited  pro-forma  financial  information is not  necessarily
     indicative either of the results of operations that would have occurred had
     this transaction been consummated at the beginning of the periods presented
     or of future results of operations.

3.   Long-term Debt

     Senior Notes

     On March 27,  1998  Trenwick  Group Inc.,  completed a private  offering of
     $75,000,000  aggregate  principal amount of 6.70% Senior Notes due April 1,
     2003 (the "Senior Notes"). In conjunction with the Business Combination and
     related reorganization described in Note 1, Trenwick America Corporation, a
     wholly-owned  subsidiary  of  Trenwick  Group  Inc.  ("Trenwick  America"),
     assumed the  obligations  of  Trenwick  Group Inc.  under the Senior  Notes
     effective September 27, 2000. Interest is payable  semi-annually on April 1
     and October 1 of each year,  which commenced on October 1, 1998. The Senior
     Notes are not subject to redemption  prior to maturity.  They are unsecured
     obligations  and rank senior in right of payment to all existing and future
     subordinated  indebtedness  of  Trenwick  America.  Under  the terms of the
     Senior  Notes,   Trenwick   America  is  not   restricted   from  incurring
     indebtedness,  but is  subject to limits on its  ability  to incur  secured
     indebtedness for borrowed money.

     Mandatorily Redeemable Preferred Capital Securities

     On January 28, 1997,  Trenwick Group Inc.  purchased all of the outstanding
     common  securities  ("Common  Securities")  of Trenwick  Capital Trust I, a
     Delaware  statutory   business  trust  (the  "Trust"),   at  par  value  of
     $3,403,000.  The  Trust  then  issued  $110,000,000  of 8.82%  Subordinated
     Capital  Income  Securities   ("Capital   Securities")  through  a  private
     placement.  The Trust invested the proceeds from the Common  Securities and
     Capital  Securities  in  8.82%  Junior  Subordinated   Deferrable  Interest
     Debentures ("Junior Subordinated  Debentures") that were issued by Trenwick
     Group Inc.  and have an  aggregate  principal  amount of  $113,403,000.  In
     connection  with  the  Business  Combination  and  related   reorganization
     described in Note 1, Trenwick America acquired the common securities of the
     Trust from Trenwick Group Inc. and assumed the obligations under the Junior
     Subordinated Debentures.

                                       12
<PAGE>

     The Trust was formed for the sole purpose of issuing the Capital Securities
     and the Common  Securities,  investing  the proceeds  thereof in the Junior
     Subordinated  Debentures  and making  distributions  to the  holders of the
     Capital  Securities.  The  capital  securities  mature on February 1, 2037;
     require  preferential  cumulative cash  distributions  at an annual rate of
     8.82%,  payable  semi-annually on February 1 and August 1 (beginning August
     1,  1997)  from  the  payment  of  interest  on  the  Junior   Subordinated
     Debentures;  and are guaranteed by Trenwick America, within certain limits,
     as to the payment of distributions and liquidation or redemption  payments.
     They are subject to mandatory  redemption;  (i) in whole but not in part at
     maturity,  upon  repayment  of the  Junior  Subordinated  Debentures,  at a
     redemption  price equal to the greater of the principal amount plus accrued
     and  unpaid  interest;  (ii)  in  whole  but  not  in  part  at  any  time,
     contemporaneously  with the optional  prepayment of the Junior Subordinated
     Debentures upon the occurrence and  continuation  of certain  events,  at a
     redemption  price  equal to the  greater  of the  principal  amount  or the
     present value of principal and interest  payable to February 1, 2007,  plus
     accrued and unpaid  interest and  possible  additional  sums;  and (iii) in
     whole  or in part,  after  February  1,  2007,  contemporaneously  with the
     optional prepayment of the Junior Subordinated Debentures,  at a redemption
     price equal to the  principal  amount plus accrued and unpaid  interest and
     possible  additional sums. Upon the occurrence and continuation of an event
     of default with respect to the Junior Subordinated Debentures,  the Capital
     Securities  shall have a preference  over the Common  Securities.  Upon the
     occurrence  of an event of default with respect to the Junior  Subordinated
     Debentures  which is  attributable  to Trenwick  America's  failure to make
     required  payments or with  respect to Trenwick  America's  guarantee,  the
     holders of the Capital  Securities  may institute a direct  action  against
     Trenwick  America.  In accordance with their terms, the Capital  Securities
     were subsequently exchanged for fully registered Capital Securities,  which
     are not subject to restrictions on transfer.

     Senior Credit Facilities

     On September 27, 2000, Trenwick America and Trenwick Holdings Limited,  the
     parent holding  company of Trenwick  International  ("Trenwick  Holdings"),
     entered into an amended and restated  $490,000,000  credit  agreement  with
     various lending  institutions,  The Chase Manhattan Bank, as Administrative
     Agent,  First Union National Bank, as Syndication Agent, and Fleet National
     Bank, as Documentation Agent (the "Credit  Facility").  In conjunction with
     the Business  Combination,  the Credit Facility was amended and restated to
     provide for Trenwick  America to be the primary obligor with respect to the
     revolving credit facility and for its sister company in the United Kingdom,
     Trenwick  Holdings to be the primary  obligor with respect to the letter of
     credit  facility.  Trenwick  America is a guarantor  of Trenwick  Holdings'
     obligations  under the Credit  Facility and Trenwick is a guarantor of both
     Trenwick  America  and  Trenwick  Holdings'  obligations  under the  Credit
     Facility.  LaSalle  Re  Holdings  Limited  is  a  guarantor  of  Trenwick's
     obligations under the Credit Facility.

                                       13
<PAGE>

     The Credit Facility  provides for a $260,000,000,  364 day revolving credit
     facility  with an  option to pay any outstanding  borrowings over the  four
     years following  the expiration  of the 364 day period.  In  addition,  the
     Credit Facility provides for a $230,000,000 five year,  Lloyd's  letter of
     credit facility.  The applicable  interest  rate on  borrowings  under the
     Credit  Facility is currently 1.3% above the London Interbank Offered  Rate
     or The Chase Manhattan Bank prime  commercial lending rate. At the  end  of
     the revolving period,  all outstanding revolving loans will, at the  option
     of Trenwick  America,  convert to a four-year term loan  facility,  subject
     to scheduled principal amortization over the four-year period in accordance
     with the following schedule:

                    Repayment Date                       Percentage to be Repaid
                    --------------                       -----------------------
                    June 30, 2002                                    10.0%
                    December 31, 2002                                12.5%
                    June 30, 2003                                    12.5%
                    December 31, 2003                                15.0%
                    June 30, 2004                                    15.0%
                    December 31, 2004                                17.5%
                    September 27, 2005                               17.5%

     In addition,  Trenwick  America is obligated  under the Credit  Facility to
     repay a  portion  or all of the  revolving  credit  facility  or term  loan
     facility in the event of equity  issuances,  asset sales and debt issuances
     by Trenwick  Group Ltd. or its  subsidiaries.  As of  September  30,  2000,
     Trenwick  America  had   approximately   $157,214,000  of  revolving  loans
     outstanding, the proceeds of which were  used to retire a prior  syndicated
     debt  facility.

     The letter of credit  portion of the Credit  Facility  of  $230,000,000  is
     available in U.S. Dollars or Pounds Sterling and may only be issued for the
     account of Lloyd's to support the  syndicate  participations  of Trenwick's
     subsidiaries.  The unsecured letters of credit are in force for five years.
     An interest rate margin,  which is currently  1.3%, is charged on an annual
     basis  on  the  utilized  portion  of  the  facility,  which  is  currently
     $215,200,000.  A commitment fee, which is currently .25%, is charged on the
     unused portion of the letter of credit portion of the Credit Facility.

     The Credit Facility  contains general covenants and restrictions as well as
     financial  covenants  relating to, among other things,  Trenwick's  minimum
     interest  coverage,  debt to capital  leverage,  minimum earned surplus and
     tangible net worth.  As of September 30, 2000, the Company is in compliance
     with the Credit Facility covenants.


                                       14
<PAGE>


     Contingent Interest Notes

     In  conjunction  with the 1999  acquisition  of  Chartwell  Re  Corporation
     ("Chartwell"), Trenwick Group Inc. assumed all of the obligations under the
     Contingent  Interest  Notes due June 30, 2006 (the "CI Notes"),  which were
     originally  issued  by  Piedmont  Management  Company  Inc.   ("Piedmont"),
     INSCORP's former parent,  to its stockholders just prior to its acquisition
     by  Chartwell  in  1995.  In  conjunction  with the  Business  Combination,
     Trenwick  America  assumed the obligations of Trenwick Group Inc. under the
     CI Notes effective September 27, 2000.

     The CI Notes were issued  immediately  prior to Chartwell's  acquisition of
     Piedmont  to  protect   Chartwell   against  the   possibility  of  adverse
     development of INSCORP's  reserves for losses and loss adjustment  expenses
     and long-tail casualty exposures.  The CI Notes were issued in an aggregate
     principal amount of $1,000,000,  with principal accruing interest at a rate
     of 8% per annum,  compounded  annually.  Such  interest will not be payable
     until maturity or earlier  redemption of the CI Notes. In addition,  the CI
     Notes entitle the holders thereof to receive at maturity,  in proportion to
     the  principal  amount of the CI Notes held by them,  an  aggregate of from
     $10,000,000 up to $55,000,000 in contingent interest.  Settlement of the CI
     Notes  may  be  made  by  payment  of  cash  or,  under  certain  specified
     conditions,  by delivery of shares of the Company's  common  stock.  The CI
     Notes mature on June 30, 2006.

     At September  30, 2000,  the CI Notes are recorded at the present  value of
     the amount which is reasonably  determined  to be payable at maturity.  The
     Company  believes  that  INSCORP's  reserves  for loss and loss  adjustment
     expenses as of September 30, 2000 are an appropriate  estimate of projected
     ultimate losses and loss adjustment  expenses to be paid and therefore,  at
     this time,  the amount of  contingent  interest  on the CI Notes  presently
     expected  to be paid at  maturity  is  $51,771,000.  The CI  Notes  contain
     covenants,   which  relate  to  the  maintenance  of  certain  records  and
     limitations on certain  indebtedness.  As of September 30, 2000 the Company
     is in compliance with those covenants.

     Future  minimum  payments  on  long  term  debt as  of  September 30, 2000,
     assuming repayment in full of the revolving credit portion  of  the  Credit
     Facility at the end of its one year term, are as follows (in thousands):

          2001.................................................   $157,214
          2002.................................................      3,350
          2003.................................................     75,000
          2006.................................................     51,771
                                                                ------------
          Total................................................   $287,335
                                                                ============

     Restrictions on Certain Payments within Trenwick

     Because  Trenwick's  operations  are  conducted   through   its   operating
     subsidiaries,Trenwick  is  dependent  upon  the  ability  of its  operating
     subsidiaries to transfer funds,  principally in the form of cash dividends,
     tax reimbursements and other statutorily  permissible payments. In addition
     to  general  legal   restrictions   on  payments  of  dividends  and  other
     distributions to shareholders  applicable to all  corporations,  Trenwick's
     insurance subsidiaries are subject to further regulations that, among other
     things,  restrict the amount of dividends and other  distributions that may
     be paid to their  parent  corporations.  Management  believes  that current
     levels of cash flow from  operations and assets held at the holding company
     level,  together with approval of one or more extraordinary  dividends from
     Trenwick's  operating  subsidiaries,  will provide Trenwick with sufficient
     liquidity to meet its  operating  needs in the short term (over the next 12
     months).


                                       15
<PAGE>

4.   Commitments and Contingencies

     Letters of Credit

     INSCORP has a $2,802,000  letter of credit to support the  participation in
     Riverside Underwriters,  plc. This standby letter of credit is in force for
     five  years,  and  provides  capital  to  participate  in  certain  Lloyd's
     syndicates for the 1996 to 2000 underwriting years of account.

     Letters of credit are also provided to support the  Company's  domestic and
     international  reinsurance operations.  Total letters of credit outstanding
     to support reinsurance operations as of September 30, 2000 is $2,000,000.

     Limited Partnership Investment

     Chartwell Insurance has committed to invest $15,000,000 in a private equity
     fund, High Ridge Capital Limited  Partnership,  which makes  investments in
     the insurance  industry.  The Company contributed a total of $13,508,000 to
     this fund as of September 30, 2000.

     Operating Lease Agreements

     Trenwick leases office space under  non-cancelable  operating  leases which
     expire at various  dates  through  2015.  Trenwick's  future  minimum lease
     commitments as of September 30, 2000 are as follows:

       2001.................................................     $3,805,829
       2002.................................................      3,608,298
       2003.................................................      3,675,239
       2004.................................................      3,692,317
       2005.................................................      4,129,541
       2006 and thereafter..................................     11,982,962

     Total office rent expense for the nine months ended  September 30, 2000 and
     1999 is $459,000 and $397,000, respectively.

                                       16
<PAGE>


     Litigation

     The Company is party to various legal proceedings  generally arising in the
     normal  course of its  business.  The  Company  does not  believe  that the
     eventual  outcome of any such proceeding will have a material effect on its
     financial  condition or results of operations or cash flows.  The Company's
     subsidiaries are regularly  engaged in the investigation and the defense of
     claims  arising  out of the  conduct  of their  business.  Pursuant  to the
     Company's  insurance and reinsurance  arrangements,  disputes are generally
     required to be finally settled by arbitration.

5.   Reinsurance

     Trenwick purchases reinsurance to reduce its exposure to catastrophe losses
     and other large losses in all lines of business. Trenwick, however, remains
     liable  in  the  event  that  its   retrocessionaires  do  not  meet  their
     contractual obligations.

     The effects of  reinsurance  on premiums  written and earned are as follows
(in thousands):
<TABLE>
<CAPTION>
                                                                             Nine Months               Nine Months
                       Three Months Ended       Three Months Ended              Ended                     Ended
                       September 30, 2000       September 30, 1999        September 30, 2000        September 30, 1999
                       ------------------       ------------------        ------------------        ------------------

                      Written      Earned      Written      Earned       Written      Earned       Written      Earned
                      -------      ------      -------      ------       -------      ------       -------      ------
<S>                    <C>         <C>          <C>         <C>          <C>          <C>          <C>          <C>
Assumed                $25,321     $35,285      $17,766     $28,083      $122,567     $106,634     $127,199     $107,285

Ceded                   (9,053)     (8,534)      (1,182)     (6,721)      (30,440)     (23,895)     (27,207)     (15,799)
                        -------     -------      ------      ------       --------     --------     -------      -------

Net Premiums            16,268      26,751       16,584      21,362        92,127       82,739       99,992       91,486
                        ======      ======       ======      ======        ======       ======       ======       ======

</TABLE>

6.   Share Capital and Additional Paid-in Capital

     The  authorized share capital of the Company is 150,000,000  shares of  par
     value $.10 each. This aggregate figure includes  both common and  preferred
     shares.

     Common Shares and Preferred Shares

     As of September 30, 2000, the Company had outstanding 36,668,594 issued and
     fully paid common shares and no preferred shares. As of September 30, 2000,
     the Company's  share capital was $3,667,000 and additional  paid in capital
     was $574,748,000.

     Catastrophe Equity Put

     On September  27, 2000, Trenwick  assumed the benefits and  obligations  of
     LaSalle Re Holdings  Limited  under a $100 million  multi-year  Catastrophe
     Equity Put  ("CatEPut")  option program.  The CatEPut  enables  Trenwick to
     raise up to $100 million of equity, through the issue of convertible Series
     B  Preferred  Shares to the option  writers.  The  preferred  shares can be
     redeemed by Trenwick at any time over the five years following their issue.
     In addition,  the option  writers can convert their  preferred  shares into
     common shares of Trenwick at any time after they have been  outstanding for
     five years.  Conversion  is at the greater of the book value of Trenwick at
     the date of  conversion  or the market value of the common  shares based on
     the 30-day trading  average prior to  conversion.  Trenwick is obligated to
     pay a net option premium of $1.9 million per annum.  The net option premium
     is charged to additional paid in capital, net of the minority's interest of
     $0.4 million.


                                       17
<PAGE>


7.   Earnings Per Share

     The  following  table  sets  forth  the  computation  of  basic and diluted
     weighted average shares:
<TABLE>
<CAPTION>
                                                            Three Months Ended                 Nine Months Ended
                                                               September 30,                     September 30,
                                                       ------------------------------    ------------------------------
                                                            2000             1999             2000             1999
                                                       -------------    -------------    -------------    -------------
<S>                                                     <C>             <C>               <C>              <C>
Income available to common shareholders (in
thousands):
Net income (loss) basic                                 $     6,911      $    (4,876)     $     2,732       $  (13,401)
Minority interest in net income of subsidiary
   (when dilutive)                                            2,097                -              839                -
                                                        -----------      ------------     -----------       -----------
                                                        $     9,008      $    (4,876)     $     3,571       $  (13,401)
                                                        ===========      ===========      ===========       ==========
Net income (loss) diluted
Weighted average common shares outstanding:
Weighted average shares outstanding (basic)              15,788,915       15,598,719       15,621,556       15,700,546
Weighted average shares issuable on conversion
   of minority interest shares in subsidiary
   (when dilutive)                                        4,569,759                -        4,725,546               -
Weighted average shares issuable on exercise
     of employee stock options, net of assumed
     repurchases (when dilutive)                            176,917                -          328,979               -
                                                        -----------      ------------     -----------       -----------
Weighted average shares outstanding (diluted)            20,535,591       15,598,719       20,676,081       15,700,546
                                                        ===========      ===========      ===========       ==========
Basic and diluted earnings (loss) per share                   $0.44           $(0.31)           $0.17           $(0.85)
                                                        ===========      ===========      ===========       ==========


</TABLE>

8.   Segment Reporting

     Trenwick has  determined  that its  reportable  segments are those that are
     based on the Company's method of internal  reporting,  which segregates its
     business by geographic  location and type of product offered.  Trenwick has
     five reportable business segments:  (1) Trenwick America Re, (2) Canterbury
     Financial Group Inc., (3) Trenwick International,  (4) CMA, and (5) LaSalle
     Re.  Trenwick  America Re  underwrites  treaty  reinsurance of property and
     casualty risks  primarily  written by U.S.  insurance  companies.  Trenwick
     America Re includes reinsurance  business of Chartwell  Reinsurance and its
     subsidiaries  since  its  acquisition  on  October  27,  1999.   Canterbury
     Financial Group Inc.  underwrites  specialty insurance in the United States
     through its subsidiaries, Chartwell Insurance, INSCORP and Dakota. Trenwick
     International  provides  specialty  insurance  and treaty  and  facultative
     reinsurance on a world-wide basis. CMA manages Trenwick's  participation in
     the Lloyd's market. LaSalle Re is a property and casualty reinsurer writing
     worldwide  specialist  products with an emphasis on  catastrophe  coverage,
     with some participation in the Lloyd's market.

     As described in Note 1, the Business Combination has resulted in LaSalle Re
     Holdings  Limited  being  treated as the  accounting  acquiror.  Therefore,
     Trenwick  Group Ltd.'s  consolidated  income  statement  only  reflects the
     results  of the  LaSalle  Re segment  for the three and nine  months  ended
     September 30, 2000 and 1999.  The operating  results of the other  segments
     will be included in Trenwick  Group Ltd.'s  consolidated  income  statement
     after September 30, 2000.

                                       18
<PAGE>

     The consolidated balance sheet as of September 30, 2000 includes the assets
     for all of Trenwick  Group  Ltd.'s  segments.  A breakdown of the assets by
     segment is presented in the following table (in thousands):

       Total Assets:
          Trenwick America Re                                     $1,708,561
          Canterbury Financial Group                                 407,750
          Trenwick International                                     419,946
          Chartwell Managing Agents                                  692,779
          LaSalle Re                                                 739,816
          Unallocated                                                 43,486
                                                          --------------------
                                                                  $4,012,338
                                                          ====================











                                       19
<PAGE>


Item 2.
            Management Discussion and Analysis of Financial Condition
                            and Results of Operations

The following  discussion  highlights  material factors affecting our results of
operations for the three and nine months ended September 30, 2000 and 1999. This
discussion  and  analysis  should  be  read in  conjunction  with  the  attached
unaudited  consolidated financial statements and notes thereto of Trenwick Group
Ltd.  ("Trenwick") and the audited  consolidated  financial statements and notes
thereto  contained  in the Annual  Report on Form 10-K for the fiscal year ended
September  30,  1999 of  Trenwick's  predecessor  company,  LaSalle Re  Holdings
Limited.

Overview

Trenwick is a Bermuda holding company  headquartered in Hamilton,  Bermuda whose
principal subsidiaries underwrite specialty insurance and reinsurance.  Trenwick
was not a public  company  prior to September  27, 2000.  On September 27, 2000,
Trenwick Group Inc.,  LaSalle Re Holdings Limited,  LaSalle Re Limited ("LaSalle
Re") and Trenwick  completed a business  combination  in which  shareholders  of
Trenwick Group Inc.,  LaSalle Re Holdings Limited and LaSalle Re exchanged their
shares on a one-for-one  basis for newly-issued  shares of Trenwick.  LaSalle Re
Holdings  Limited  has been  determined  to be the  accounting  acquiror  in the
business  combination,   and  as  such  the  financial  statements  reflect  the
historical results of operations of LaSalle Re Holdings Limited and the combined
balance sheet of Trenwick Group Inc. and LaSalle Re Holdings  Limited  beginning
September 27, 2000.

As of September  30, 2000 Trenwick  operates  through five  principal  operating
platforms.  LaSalle Re, located in Hamilton,  Bermuda, primarily writes property
catastrophe  reinsurance  on a worldwide  basis.  Trenwick  America  Reinsurance
Corporation  ("Trenwick  America  Re")  underwrites  U.S.  property and casualty
treaty reinsurance,  including U.S.  reinsurance  business previously written by
Chartwell  Re  Corporation   ("Chartwell").   Canterbury  Financial  Group  Inc.
("Canterbury  Financial"),  underwrites  U.S.  specialty  insurance  through its
operating subsidiaries, Chartwell Insurance Company ("Chartwell Insurance"), The
Insurance  Corporation of New York  ("INSCORP") and Dakota  Specialty  Insurance
Company ("Dakota").  Trenwick International Limited ("Trenwick  International"),
domiciled in London,  underwrites  non-U.S.  specialty  insurance and treaty and
facultative reinsurance.  Chartwell Managing Agents Limited ("Chartwell Managing
Agents")  manages  syndicates  underwriting  at Lloyd's.  Chartwell,  Canterbury
Financial and Chartwell  Managing Agents were acquired by Trenwick Group Inc. on
October 27, 1999.

All of Trenwick's principal operating units are rated A (Excellent) by A.M. Best
Company and have been assigned a financial strength rating of A+ by Standard and
Poor's.



                                       20
<PAGE>


Acquisitions

On September 27, 2000, Trenwick Group Inc., LaSalle Re Holdings Limited, LaSalle
Re and Trenwick  completed a business  combination with shareholders of Trenwick
Group Inc.,  LaSalle Re Holdings  Limited  and  LaSalle Re  receiving  shares in
Trenwick on a one-for-one basis. The combination was accounted for as a purchase
by LaSalle  Re  Holdings  Limited of  Trenwick  Group Inc.  and the  outstanding
minority interest of LaSalle Re.

Results of Operations  - Three Months Ended September 30, 2000 and 1999
<TABLE>
<CAPTION>
                                                      2000            1999           Change
                                                     -----------    -------------    ------------
                                                                  (in thousands)
<S>                                                    <C>          <C>               <C>
Underwriting income (loss)                            $1,942        $(11,082)         $13,024
Net investment income                                  9,591           8,530            1,061
Interest expense and dividends on
   preferred stock of subsidiary                      (1,945)         (2,012)              67
                                                     -----------    -------------    ------------
Operating income (loss)                                9,588          (4,564)          14,152
Net realized investment gains (losses)                   270          (1,127)           1,397
Foreign currency gains (losses)                         (426)            218             (644)
Reorganization costs                                    (424)           (437)              13
                                                     -----------    -------------    ------------
Income (loss) before minority interest                 9,008          (5,910)          14,918
Minority interest in net (income) loss of subsidiary  (2,097)          1,034           (3,131)
                                                     -----------    -------------    ------------
Net income (loss)                                     $6,911         $(4,876)         $11,787
                                                     ===========    =============    ============

</TABLE>

Net income of $6.9 million in 2000 represents an $11.8 million increase over the
net loss of $4.9 million in 1999. The increase is principally caused by improved
underwriting results in 2000. Also contributing to the increase are additions to
net investment  income and net realized  investment  gains,  partially offset by
increased foreign currency losses.

Underwriting income (loss)
<TABLE>
<CAPTION>

                                                      2000            1999           Change
                                                     ------------    -------------  ------------
                                                                  (in thousands)
<S>                                                   <C>           <C>               <C>
Net premiums earned                                   $26,751          $21,362          $5,389
                                                     ------------    -------------    ----------
Claims and claims expenses incurred                   (15,924)         (25,568)           9,644
Acquisition costs and underwriting expenses            (8,885)          (6,876)           2,009
                                                     ------------    -------------    ----------
Total underwriting costs and expenses                 (24,809)         (32,444)           7,635
                                                     ------------    -------------    ----------
Underwriting income (loss)                            $1,942        $(11,082)         $13,024
                                                     ============    =============    ==========
Loss ratio                                             59.5%           119.7%         (60.2)%
Underwriting expense ratio                             33.2%            32.2%          (1.0)%
Combined ratio                                         92.7%           151.9%         (59.2)%

</TABLE>

Underwriting  income  of  $1.9  million  in  2000  represents  a  $13.0  million
improvement over the underwriting loss of $11.1 million in 1999. The improvement
is principally  caused by a reduction in the loss ratio by approximately 60% and
a 25% increase in net premiums earned.


                                       21
<PAGE>

Premiums written

Gross  premiums  written for the  quarter  ended  September  30, 2000 were $25.3
million  compared to $17.8 million for the quarter ended  September 30, 1999, an
increase  of  $7.5  million  or  42%.  Details  of gross  premiums  written  are
provided below.

<TABLE>
<CAPTION>

                                                                    2000            1999           Change
                                                                  --------------------------------------------
                                                                                (in thousands)
<S>                                                                 <C>              <C>            <C>
Property catastrophe
   US                                                                $8,969          $10,354        $(1,385)
   International                                                      5,463            5,864           (401)
                                                                 -----------    -------------    ------------
Total property catastrophe                                           14,432           16,218         (1,786)
Lloyd's and other lines                                              10,697            6,557           4,140
Fronted premiums and premium adjustments                                192          (5,009)           5,201
                                                                 -----------    -------------    ------------
                                                                    $25,321          $17,766          $7,555
                                                                 ===========    =============    ============
</TABLE>


Property catastrophe gross premiums written decreased from $16.2 million for the
quarter  ended  September  30,  1999 to  $14.4  million  for the  quarter  ended
September 30, 2000.  This was primarily due to the  non-renewal  of certain U.S.
property catastrophe contracts with insufficient pricing levels.

For the quarter ended  September 30, 2000,  gross  premiums  written in lines of
business other than property  catastrophe totaled $10.9 million compared to $1.5
million for the quarter  ended  September  30, 1999.  The increase was due to an
increase  in  premium  estimates  on  Lloyd's  business  for the  1999  and 1998
underwriting  years of account,  offset by the non-renewal of certain contracts.
Gross  premiums  written for the quarter  ended  September  30, 1999  includes a
reduction of $5.5 million relating to re-estimates of premiums on in force quota
share contracts following revised information from cedants.

Gross premiums ceded for the quarter ended  September 30, 2000 were $9.1 million
compared to $1.2 million for the quarter ended  September 30, 1999. The increase
of $7.9 million was due to the  purchase of new  reinsurance  protections.  As a
result of the above,  net premiums  written for the quarter ended  September 30,
2000  were  $16.3  million  compared  to $16.6  million  for the  quarter  ended
September 30, 1999.

Premiums earned
<TABLE>
<CAPTION>
                                                                    2000            1999           Change
                                                                 --------------------------------------------
                                                                               (in thousands)
<S>                                                                 <C>              <C>              <C>
Gross premiums written                                              $25,321          $17,766          $7,555
Change in premiums earned                                             9,964           10,317            (353)
                                                                 -----------    -------------    ------------
Gross premiums earned                                                35,285           28,083           7,202
                                                                 -----------    -------------    ------------
Gross premiums ceded                                                  9,053            1,182           7,871
Change in premiums ceded                                               (519)           5,539           6,058
                                                                 -----------    -------------    ------------
Amortized ceded premiums                                              8,534            6,721           1,813
                                                                 -----------    -------------    ------------
Net premiums earned                                                 $26,751          $21,362          $5,389
                                                                 ===========    =============    ============
</TABLE>



                                       22

<PAGE>

Net premiums  earned for the quarter ended September 30, 2000 were $26.8 million
compared to $21.4  million  for the same  quarter in 1999.  The  increase in net
premiums earned is due primarily to an increase in premium  estimates on Lloyd's
business which is fully earned when booked.

Claims and claims expenses

The Company  incurred  claims and claim  expenses,  net of recoveries,  of $15.9
million during the quarter ended  September 30, 2000 compared with $25.6 million
during the quarter  ended  September 30, 1999.  There were no major  catastrophe
loss events that  affected the Company  during the quarter  ended  September 30,
2000.  However,  the  Company  provided a further  $3.7  million on its  Lloyd's
business  associated with the increased  premium  estimates on the 1999 and 1998
underwriting  years of account.  During the quarter ended September 30, 1999 the
Company  experienced net losses of $13.6 million from three catastrophic  events
which occurred  during the quarter:  Hurricane  Floyd;  an earthquake  which hit
Turkey and Typhoon  Olga which hit North  Korea.  Claims and claims  expenses in
both periods include reserves for reported smaller losses and the  establishment
of reserves for other events that  occurred  during the quarter but had not been
reported.

Underwriting expenses
<TABLE>
<CAPTION>
                                                                  2000           1999           Change
                                                               ------------   ------------    ------------
                                                                             (in thousands)
<S>                                                                 <C>            <C>             <C>
Policy acquisition costs                                            $5,621         $3,409          $2,212
Underwriting expenses                                                3,264          3,467           (203)
                                                               ------------   ------------    ------------
Total underwriting expenses                                         $8,885         $6,876          $2,009
                                                               ============   ============    ============
Underwriting expense ratio                                           33.2%          32.2%            1.0%
                                                               ============   ============    ============
</TABLE>


Policy  acquisition  costs as a percentage of net premiums earned were 21.0% for
the quarter  ended  September  30, 2000  compared to 16.0% for the quarter ended
September  30,  1999.  The  increase in the ratio was caused  principally  by an
increase  in  premiums   written   relating  to  business  other  than  property
catastrophe, which has a higher expense ratio.

Other  underwriting  cost  including  underwriting  salary  cost was  relatively
consistent at $3.3 million for the quarter ended  September 30, 2000 compared to
$3.5 million for the quarter ended September 30, 1999.

Net Investment Income
<TABLE>
<CAPTION>
                                                                   2000             1999           Change
                                                               ----------------------------------------------
                                                                              (in thousands)
<S>                                                                <C>              <C>               <C>

Average invested assets                                            $544,304         $542,967          $1,337
Average annualized yields                                              6.5%             5.9%            0.6%
                                                               -------------    -------------    ------------
Net investment income - portfolio                                     8,847            7,945             902
Net investment income - non-portfolio                                   744              585             159
                                                               -------------    -------------    ------------
Net investment income                                                $9,591           $8,530          $1,061
                                                               =============    =============    ============

</TABLE>

Net  investment  income for the three months ended  September  30, 2000 was $9.6
million  compared  to $8.5  million  for the same  period  in  1999.  Annualized
portfolio  investment  income as a  percentage  of the average  market  value of
invested  assets was 6.5% for the three months ended September 30, 2000 compared
to 5.9% for the three months ended September 30, 1999.



                                       23
<PAGE>


Interest Expense and Dividends on Preferred Stock of Subsidiary

Interest  expense and  dividends  on  preferred  stock of  subsidiary  were $1.9
million for the quarter ended September 30, 2000 a decrease of $0.1 million from
the same period in 1999.  Preferred  stock  dividends  were $1.6 million in each
period.

Non-operating Income and Expenses

Net realized  gains on  investments  were $0.3  million  during the three months
ended  September 30, 2000,  compared to net realized  losses of $1.1 million for
the three months ended  September 30, 1999.  Both the losses and gains were made
pursuant to a policy designed to protect the total returns on the portfolio.

The Company recorded an exchange loss of $0.4 million for the three months ended
September  30, 2000  compared to an exchange  gain of $0.2 million for the three
months ended September 30, 1999 which was due to a fall in the value of European
currencies against the US dollar.

The Company incurred  reorganization costs of $0.4 million during both the three
months ended September 30, 2000 and the three months ended September 30, 1999.

Results of Operations - Nine Months Ended September 30, 2000 and 1999
<TABLE>
<CAPTION>
                                                                   2000             1999           Change
                                                               ----------------------------------------------
                                                                              (in thousands)
<S>                                                               <C>              <C>              <C>
Underwriting income (loss)                                        $(13,107)        $(34,552)         $21,445
Net investment income                                               27,778           25,893            1,885
Interest expense and dividends on
   preferred stock of subsidiary                                    (5,838)          (6,172)             334
                                                               -------------    -------------    ------------

Operating income (loss)                                              8,833          (14,831)         23,664
Net realized investment losses                                      (1,916)          (1,577)           (339)
Foreign currency losses                                                (53)            (335)            282
Reorganization costs                                                (3,293)            (717)         (2,576)
                                                               -------------    -------------    ------------
Income (loss) before minority interest                                3,571         (17,460)         21,031
Minority interest in net (income) loss of subsidiary                   (839)          4,059          (4,898)
                                                               -------------    -------------    ------------
Net income (loss)                                                    $2,732        $(13,401)        $16,133
                                                               =============    =============    ============
</TABLE>

Net income of $2.7 million in 2000 represents a $16.1 million  increase over the
net loss of $13.4  million  in 1999.  The  increase  is  principally  caused  by
improved  underwriting  results in 2000.  Also  contributing to the increase are
additions to net investment income, offset by increased reorganization costs.


                                       24
<PAGE>

Underwriting income (loss)
<TABLE>
<CAPTION>
                                                                  2000             1999           Change
                                                               --------------------------------------------
                                                                             (in thousands)
<S>                                                               <C>              <C>           <C>
Net premiums earned                                                $82,739          $91,486       $(8,747)
                                                               ------------    -------------    -----------
Claims and claims expenses incurred                                 69,190          100,561         31,371
Acquisition costs and underwriting expenses                         26,656           25,477          1,179
                                                               ------------    -------------    -----------
Total underwriting costs and expenses                               95,846          126,038         30,192
                                                               ------------    -------------    -----------
Underwriting income (loss)                                        $(13,107)        $(34,552)       $21,445
                                                               ============    =============    ===========
Loss ratio                                                           83.6%           109.9%        (26.3)%
Underwriting expense ratio                                           32.2%            27.8%           4.4%
Combined ratio                                                      115.8%           137.7%        (21.9)%

</TABLE>

Underwriting   loss  of  $13.1  million  in  2000  represents  a  $21.0  million
improvement over the underwriting loss of $34.6 million in 1999. The improvement
is principally caused by a 26.3% improvement in the loss ratio.

Premiums written

Gross premiums  written for the nine months ended September 30, 2000 were $122.6
million compared to $127.2 million for the nine months ended September 30, 1999,
a decrease of 3.6%. Details of gross written premiums are provided below:

<TABLE>
<CAPTION>

                                                                  2000            1999          Change
                                                               -------------------------------------------
                                                                               (in thousands)
<S>                                                               <C>             <C>           <C>
Property catastrophe

  US                                                               $46,721         $49,234       $(2,513)
  International                                                     31,821          38,332        (6,511)
                                                               ------------    ------------   ------------
Total property catastrophe                                          78,542          87,566        (9,024)
Lloyd's and other lines                                             38,115          31,647         6,468
Fronted premiums and premium adjustments                             5,910           7,986        (2,076)
                                                               ------------    ------------   ------------
                                                                  $122,567        $127,199       $(4,632)
                                                               ============    ============   ============
</TABLE>

The  Company's   international   property  catastrophe  gross  premiums  written
decreased  $6.5 million for the nine months ended  September  30, 2000  compared
with the nine months ended September 30, 1999. This decrease was the result of a
planned reduction in international  catastrophe pro-rata treaties.  The decrease
on the U.S.  property  catastrophe  book was due to the non-renewal of contracts
with insufficient pricing levels.

Gross premiums written in lines other than property catstrophe increased by $4.4
million for the nine months ended September 30, 2000 compared to the nine months
ended  September 30, 1999. The increase in gross  premiums arose  primarily from
adjustments in premium estimates  associated with the Company's Lloyd's business
for the 1999 and 1998 underwriting years of account.

                                       25
<PAGE>


Premiums  ceded for the nine months ended  September 30, 2000 were $30.4 million
compared to $27.2  million for the nine months ended  September  30,  1999.  The
increase was primarily due to an increase in the amount of reinsurance purchased
by the  Company.  As a result of the above,  net  premiums  written for the nine
months ended  September 30, 2000 were $92.1 million  compared to $100.0  million
for the nine months ended September 30, 1999.

<TABLE>
<CAPTION>

Premiums earned                                                  2000              1999           Change
                                                              -----------------------------------------------
                                                                             (in thousands)
<S>                                                           <C>              <C>             <C>

Gross premiums written                                        $122,567         $127,199        $(4,632)
Change in premiums earned                                      (15,933)         (19,914)         3,981
                                                              -------------    -------------   ------------
Gross premiums earned                                          106,634          107,285           (651)
                                                              -------------    -------------   ------------
Gross premiums ceded                                            30,440           27,207         (3,233)
Change in premiums ceded                                        (6,545)         (11,408)        (4,863)
                                                              -------------    -------------   ------------
Amortized ceded premiums                                        23,895           15,799         (8,096)
                                                              -------------    -------------   ------------
Net premiums earned                                            $82,739          $91,486        $(8,747)
                                                              =============    =============   ============

</TABLE>

Net  premiums  earned for the nine months  ended  September  30, 2000 were $82.7
million  compared to $91.5  million for the same period in 1999.  The decline in
premiums  earned  of $8.8  million  was  commensurate  with the  decline  in net
premiums written.

Claims and claims expenses

The Company  incurred claims and claims  expenses,  net of recoveries,  of $69.2
million  during the nine months ended  September  30, 2000  compared with $100.6
million during the nine months ended September 30, 1999.  During the nine months
ended  September  30,  2000 claims and claims  expenses  included an increase of
$16.6  million in net losses  relating  to Storm  Martin that hit France in late
1999.  This followed an increase in the market estimate of the loss set in early
2000 due to an increase in  information  available to the cedants.  In addition,
the Company  strengthened it's loss reserves for the Danish storm which occurred
in early December 1999, by $8.3 million.  The Company also recorded $7.4 million
of additional loss reserves relating to its Lloyd's business.

During the nine months  ended  September  30, 1999,  claims and claims  expenses
incrured included $25.6 million in losses from various catastrophies  including,
the Australian hailstorm,  the Oklahoma tornadoes,  Hurricane Floyd, the Turkish
earthquake  that hit in August 1999,  and Typhoon  Olga.  During this period the
Company completed a valuation of its reserving  methodology and assumptions used
in setting  incurred-but-not-reported  loss reserves. As a result of this study,
the Company  recorded an increase in claims and claims  expenses of $20 million.
In  addition,  the Company  recorded  approximately  $14  million of  additional
reserves relating to contracts written in prior years.

Claims and claims expenses for the nine months ended September 30, 2000 and 1999
include reserves for reported  smaller losses and the  establishment of reserves
for other events that occurred during the quarter but had not been reported.



                                       26
<PAGE>

<TABLE>
<CAPTION>
Underwriting expenses

                                                                    2000            1999          Change
                                                                 -------------------------------------------
                                                                             (in thousands)
<S>                                                                <C>             <C>             <C>
Policy acquisition costs                                           $16,269         $14,496         $1,773
Underwriting costs                                                  10,387          10,981          (594)
                                                                  -----------     -----------     ----------
Total underwriting expenses                                        $26,656         $25,477         $1,179
                                                                  ===========     ===========     ==========
Underwriting expense ratio                                           32.2%           27.8%           4.4%
                                                                  ===========     ===========     ==========

</TABLE>

Policy  acquisition  costs as a percentage of net earned premiums were 19.7% for
the nine months ended  September  30, 2000 compared to 15.8% for the nine months
ended September 30, 1999. The increase in the policy  acquisition  expense ratio
was due to an increase in  non-catastrophe  business  which has a higher expense
ratio and an increase in the amount of amortized  ceded  premiums  which reduced
net earned premiums.

Underwriting  costs of 10.4 million for the nine months ended September 30, 2000
were relatively unchanged compared to underwriting expenses of $11.0 million for
the nine months ended September 30, 1999.

Net Investment Income
<TABLE>
<CAPTION>
                                                                  2000            1999          Change
                                                               -------------------------------------------
                                                                             (in thousands)
<S>                                                               <C>             <C>              <C>
Average invested assets                                           $546,657        $555,337         $8,680
Average annualized yield                                              6.3%            5.8%           0.5%
                                                                 -----------     ------------    -----------
Net investment income - portfolio                                   25,901          23,946          1,955
Net investment income - non portfolio                                1,877           1,947           (70)
                                                                 -----------     ------------    -----------
Net investment income                                              $27,778         $25,893         $1,885
                                                                 ===========     ============    ===========
</TABLE>

Net  investment  income for the nine months ended  September  30, 2000 was $27.8
million  compared  to $25.9  million  for the same  period  in 1999.  Annualized
portfolio  investment  income as a  percentage  of the average  market  value of
invested  assets was 6.3% for the nine months ended  September 30, 2000 compared
to 5.8% for the nine months ended September 30, 1999.

Interest Expense and on Preferred Stock Dividends of Subsidiary

Interest  expense and  dividends  on  preferred  stock of  subsidiary  were $5.8
million for the nine months ended  September 30, 2000 compared with $6.2 million
for the nine months ended  September 30, 1999.  Preferred  stock  dividends were
$4.9 million in each period.

Net Operating Income and Expenses

Net realized  losses on  investments  were $1.9  million  during the nine months
ended  September 30, 2000,  compared to net realized  losses of $1.6 million for
the nine months ended  September 30, 1999. Both the losses were made pursuant to
a policy designed to protect the total returns on the portfolio.


                                       27
<PAGE>

The  Company  recorded a  negligible  exchange  loss for the nine  months  ended
September  30, 2000  compared to an exchange  loss of $0.4  million for the nine
months ended September 30, 2000 which was due to a fall in the value of European
currencies against the US dollar.

The Company incurred reorganization costs of $3.3 million during the nine months
ended  September  30, 2000  compared to $0.7  million for the nine months  ended
September 30, 1999.  The  reorganization  costs  incurred in 2000 consist of the
write-off of reinsurance  software of $2.2 million and  reorganization  costs of
$0.8  million  relate  primarily  to the  costs  associated  with the  Company's
business  combination  agreement  with Trenwick Group Inc. The costs incurred in
the nine months ended  September 30, 1999 related to the  preparation and filing
of a  registration  statement  for an offering  of  preferred  shares  which was
subsequently withdrawn.

Investments

Trenwick's investment objective is to fund policyholder and other liabilities in
a  manner  that  enhances   shareholder  value,   subject  to  appropriate  risk
constraints.  Trenwick seeks to meet this investment  objective through a mix of
investments  that reflect the  characteristics  of the liabilities they support;
diversify the types of investment risks by interest rate, liquidity,  credit and
equity  price risk;  and  achieve  asset  diversification  by  investment  type,
industry,  issuer and geographic location.  Trenwick regularly projects duration
and  cash  flow   characteristics  of  its  liabilities  and  makes  appropriate
adjustments in its investment  portfolios.  At September 30, 2000,  Trenwick had
investments, cash and cash equivalents of $2.2 billion, compared to the combined
investments,  cash and cash  equivalents  of LaSalle  Re  Holdings  Limited  and
Trenwick Group Inc. of $2.3 billion at December 31, 1999.

Liquidity and Capital Resources

Cash Flows

Trenwick is a holding company whose principal  assets are its investments in the
common stock of its operating  subsidiaries.  As a holding  company,  Trenwick's
principal  source of funds  consists of  permissible  dividends,  tax allocation
payments  and  other  statutorily   permissible   payments  from  its  operating
subsidiaries  together  with  income  on  the  holding  company's   fixed-income
portfolio.  Trenwick's principal uses of cash are dividends to its stockholders,
servicing its debt  obligations and repurchases of its own common stock when the
pricing is  attractive.  Trenwick's  operating  subsidiaries  receive  cash from
premiums,  investment income and proceeds from sales and maturities of portfolio
investments.  They utilize cash to pay claims,  purchase  their own  reinsurance
protections,  meet operating and capital expenses and purchase  fixed-income and
equity securities.

Cash provided by Trenwick's  operating  activities  for the first nine months of
2000  was  $6.2  million  compared  to cash  provided  by  Trenwick's  operating
activities of $22.7 million for the first nine months of 1999.  The reduction in
cash flow from operations was primarily due to an overall increase in claims and
claims expenses paid.


                                       28
<PAGE>

Trenwick's  current  liquidity  objectives  are to maximize the use of available
cash to fund ongoing operating needs, pay shareholder  dividends,  strategically
invest in core businesses and meet common stock  repurchase  objectives.  During
the first nine months of 2000, net cash generated from investing,  financing and
operating  activities was used to pay $4.9 million of dividends to shareholders.
In 1999, net cash generated by investing, financing and operating activities was
used to pay $27.8 million of dividends to shareholders.

Dividends

Trenwick Group Inc. paid a quarterly dividend of $0.26 per share of common stock
in the first  three  quarters  of 2000 and in each  quarter of 1999.  LaSalle Re
Holdings  Limited paid dividends on its common shares of $0.38 per share in each
of January,  April and July 1999.  LaSalle Re  Holdings  Limited did not pay any
dividends  on its common  shares in 2000.  LaSalle Re  Holdings  Limited  paid a
quarterly  dividend of $0.55 per share on its Series A preferred  shares in each
of the four  quarters  of 1999  and the  first  three  quarters  of 2000.  It is
expected that Trenwick's Board of Directors will review  Trenwick's common share
dividend each  quarter.  Among the factors which will be considered by the Board
of Directors  in  determining  the amount of each  dividend  will be  Trenwick's
results  of  operations   and  the  capital   requirements,   growth  and  other
characteristics of its businesses.

Financings, Financing Capacity and Capitalization

Trenwick  continually  monitors  existing and alternative  financing  sources to
support Trenwick's capital and liquidity needs,  including,  but not limited to,
debt issuance,  preferred or common stock issuance,  intercompany borrowings and
pledging or selling of assets.  Trenwick's  total debt to capital  ratio  (total
debt excluding the preferred capital  securities divided by total debt excluding
the  preferred  capital  securities  and  shareholders'  equity,   adjusted  for
unrealized gains or losses on available-for-sale  investment securities) was 30%
on September 30, 2000 and 25% for LaSalle Re Holdings Limited and Trenwick Group
Inc.'s combined  results at the end of 1999. The increase is primarily due to an
increase of $63.1 million of senior credit  facilities  offset by the redemption
of the 10.25% senior notes assumed in connection with the Chartwell acquisition.

On September 27, 2000 Trenwick America  Corporation,  the parent holding company
of Trenwick's  United States  subsidiaries  ("Trenwick  America"),  and Trenwick
Holdings  Limited,   the  parent  holding  company  of  Trenwick   International
("Trenwick Holdings"),  entered into an amended and restated $490 million credit
agreement  with various  lending  institutions,  The Chase  Manhattan  Bank,  as
Administrative Agent, First Union National Bank, as Syndication Agent, and Fleet
National Bank, as Documentation  Agent.  This new credit facility provides for a
$260  million,  364-day  revolving  credit  facility  with an  option to pay out
outstanding  borrowings  under such facility  over the four years  following the
expiration of the 364-day period. In addition,  the credit facility provides for
a $230 million five year, Lloyd's letter of credit facility.


                                       29
<PAGE>

The  applicable  interest  rate on  borrowings  under the  Credit  Agreement  is
currently 1.3% above the London  Interbank  Offered Rate or The Chase  Manhattan
Bank prime  commercial  lending rate. In addition,  a commitment fee of 0.25% is
being  charged on the unused  portion of the  facility.  The Credit  Agreement's
representations,  warranties and covenants are typical for  transactions of this
type and include  limitations  based upon Trenwick's  leverage  ratio,  interest
coverage ratio, combined surplus and risk-based capital.

In connection with the Business  Combination  Trenwick America assumed effective
September  27,  2000,  Trenwick  Group  Inc.'s  obligations  with respect to $75
million aggregate principal amount of 6.70% Senior Notes, which are due April 1,
2003.  Interest is payable  semi-annually on April 1 and October 1 of each year;
interest  payments  commenced  on October 1, 1998.  The notes are not subject to
redemption prior to maturity.  They are unsecured obligations and rank senior in
right of  payment  to all  existing  and  future  subordinated  indebtedness  of
Trenwick.

Trenwick  America also assumed,  effective  September 27, 2000,  Trenwick  Group
Inc.'s  8.82%  Junior   Subordinated   Deferrable   Interest   Debentures   (the
"Debentures") held by Trenwick Capital Trust I in respect of the $110 million in
8.82%  Subordinated  Capital Income  Securities  issued by the Trust.  Under the
terms of the Debentures, Trenwick is not restricted from incurring indebtedness,
but is  subject  to limits on its  ability  to incur  secured  indebtedness  for
borrowed money.

Upon  consummation of the acquisition of Chartwell in 1999,  Trenwick Group Inc.
became the successor  obligor under  Chartwell's  Contingent  Interest Notes due
June 30, 2006 (the "Contingent  Interest Notes").  Effective September 27, 2000,
Trenwick America assumed Trenwick Group Inc.'s  obligations under the Contingent
Interest  Notes in  connection  with the Business  Combination.  The  Contingent
Interest Notes were issued in an aggregate principal amount of $1 million, which
accrues interest at a rate of 8% per annum, compounded annually. The interest is
not payable until the maturity or earlier redemption of the Contingent  Interest
Notes.  In addition,  the  Contingent  Interest  Notes  entitle their holders to
receive at maturity,  in proportion to the  principal  amount of the  Contingent
Interest  Notes held by them, an aggregate of from $10 million up to $55 million
in  contingent  interest.  The amount of contingent  interest  payable under the
Contingent  Interest  Notes  is  dependent  upon  the  level  of loss  and  loss
adjustment  expense  reserves  related to business  written by INSCORP  prior to
1996. Settlement of the Contingent Interest Notes may be made by payment of cash
or, under  certain  specified  conditions,  by delivery of shares of  Trenwick's
common stock.

Catastrophe Equity Put

On September 27, 2000,  Trenwick assumed the benefits and obligations of LaSalle
Re Holdings  Limited  under a $100  million  multi-year  Catastrophe  Equity Put
("CatEPut")  option program.  The CatEPut  enables  Trenwick to raise up to $100
million of equity, through the issue of convertible Series B Preferred Shares to
the option writers. The preferred shares can be redeemed by Trenwick at any time
over the five years following  their issue. In addition,  the option writers can
convert their preferred  shares into common shares of Trenwick at any time after
they have been  outstanding for five years.  Conversion is at the greater of the
book value of  Trenwick  at the date of  conversion  or the market  value of the
common shares based on the 30-day trading average prior to conversion.  Trenwick
is  obligated  to pay a net option  premium of $1.9  million per annum.  The net
option premium is charged to additional  paid in capital,  net of the minority's
interest of $0.4 million.

                                       30
<PAGE>

Restrictions on Certain Payments within Trenwick

Because Trenwick's operations are conducted through its operating  subsidiaries,
Trenwick is dependent upon the ability of its operating subsidiaries to transfer
funds,  principally in the form of cash dividends,  tax reimbursements and other
statutorily  permissible  payments. In addition to general legal restrictions on
payments of dividends and other distributions to shareholders  applicable to all
corporations,   Trenwick's   insurance   subsidiaries  are  subject  to  further
regulations that, among other things, restrict the amount of dividends and other
distributions that may be paid to their parent corporations. Management believes
that current levels of cash flow from  operations and assets held at the holding
company  level,  together with approval of one or more  extraordinary  dividends
from Trenwick's  operating  subsidiaries,  will provide Trenwick with sufficient
liquidity  to meet its  operating  needs in the  short  term  (over  the next 12
months).  Since the ability of Trenwick to meet its obligations in the long term
(beyond such 12-month  period) is dependent upon such factors as market changes,
insurance regulatory changes and economic conditions,  no assurance can be given
that the available net cash flow will be sufficient to meet its operating needs.
Trenwick  expects  that,  in order to repay  the  principal  amount  of  certain
currently outstanding indebtedness at maturity or otherwise, it will be required
to seek additional  financing or engage in asset sales or similar  transactions.
There  can be no  assurance  that  sufficient  funds  for  any of the  foregoing
purposes would be available to Trenwick at such time.

Under The Companies Act 1981 of Bermuda, LaSalle Re Holdings Limited, LaSalle Re
and LaSalle Re Corporate Capital Ltd. ("LaSalle Re Capital") are prohibited from
declaring  or paying a  dividend  or making a  distribution  out of  contributed
surplus and retained earnings if there are reasonable grounds for believing that
(i)  such  company  is,  or  would  offer  the  payment  be,  unable  to pay its
liabilities  as they  come due or (ii) the  realizable  value of such  company's
assets  would  thereby  be  less  than  the  aggregate  of its  liabilities  and
shareholders'  equity.  In addition,  The Insurance  Act 1978,  as amended,  and
related  regulations of Bermuda (the "Insurance Act") would prohibit the payment
of a dividend  by  LaSalle  Re or  LaSalle  Re  Capital  if the  payment of such
dividend would result in either  company no longer meeting its minimum  solvency
margin or minimum  liquidity ratio. As a registered Class 4 insurer,  LaSalle Re
is required to maintain a minimum  solvency  margin equal to the greatest of (1)
$100 million,  (2) 50% of its net premiums written (without  deducting more than
25% of gross premiums  written when computing net premiums  written) and (3) 15%
of its loss and other certain  insurance  reserves.  The minimum liquidity ratio
requires  LaSalle  Re and  LaSalle Re  Capital  to  maintain  the value of their
respective  relevant  assets  at  not  less  than  75% of the  amount  of  their
respective relevant liabilities.


                                       31
<PAGE>

Under  the  applicable  provisions  of the  insurance  holding  company  laws of
Connecticut  and North  Dakota,  the states of domicile of Trenwick  America Re,
Chartwell  Insurance and Dakota,  such companies may only pay dividends  without
the approval of the  applicable  state  insurance  regulator if such  dividends,
together with other dividends paid within the preceding twelve months,  are less
than the greater of (i) 10% of the  insurer's  policyholders'  surplus as of the
end of the prior  calendar  year or (ii) the  insurer's  statutory  net  income,
excluding  realized  capital  gains,  for the prior  calendar year. As a further
restriction,  the maximum  amount of  dividends  most U.S.  insurers  may pay is
limited to its earned surplus,  also known as its unassigned funds. Any dividend
in excess of the amount  determined  pursuant to the foregoing  formula would be
characterized as an "extraordinary dividend" requiring the prior approval of the
state insurance regulator.

Under New York law, which is applicable to INSCORP and ReCor  Insurance  Company
Inc., the maximum  ordinary  dividend payable in any twelve month period without
the approval of the New York  Insurance  Department  is the lesser of (i) 10% of
policyholders  surplus as shown on the  company's  last annual  statement or any
more recent  quarterly  statement or (ii) the company's  adjusted net investment
income.  Adjusted net investment  income is defined as net investment income for
the twelve months preceding the declaration of the dividend plus the excess,  if
any, of net investment income over dividends  declared or distributed during the
period commencing  thirty-six months prior to the declaration or distribution of
the current  dividend and ending twelve months prior  thereto.  In any case, New
York law permits the payment of an ordinary  dividend by an insurer or reinsurer
only out of earned surplus.

In addition to the foregoing limitations,  the New York Insurance Department, as
is its practice in any change of control situation,  required Trenwick to commit
to  preclude  the  acquired  New  York-domiciled  insurers,  INSCORP  and  ReCor
Insurance Company Inc., from paying any dividends for two years after the merger
with Chartwell Re Corporation without prior regulatory  approval.  The foregoing
restriction will expire on October 27, 2001. Neither INSCORP nor ReCor Insurance
Company Inc.  paid any  dividends  in 1997,  1998 or 1999.  Moreover,  insurance
holding company laws generally provide that,  notwithstanding the receipt of any
dividend from a subsidiary insurer, an insurer may make dividend payments to its
parent only to the extent it is permitted to do so under its applicable dividend
restrictions.  In other  words,  the  ability  of a  subsidiary  insurer  to pay
dividends  without  restriction may be impaired if its parent insurer cannot pay
dividends without restriction.

The maximum  dividend  permitted  by law may not be  indicative  of an insurer's
actual ability to pay dividends,  which may be constrained by business and other
regulatory  considerations,  such as the impact of dividends  on surplus,  which
could  affect an  insurer's  ratings  or  competitive  position,  the  amount of
premiums  that  can  be  written  and  the  ability  to  pay  future  dividends.
Furthermore,  beyond the limits described in the preceding paragraph,  insurance
regulatory  authorities  often  have the  discretion  to limit  the  payment  of
dividends by insurance companies domiciled in their jurisdictions.

As of September  30, 2000,  of  Trenwick's  U.S.  insurance  subsidiaries,  only
Trenwick  America  Re and  Dakota  could pay a  dividend  or other  distribution
without prior approval of the applicable insurance regulatory  authority.  As of
September 30, 2000, Trenwick America Re could pay a dividend of $4.7 million and
Dakota could pay a dividend of $2.8 million without prior approval. During 1999,
1998 and 1997,  Trenwick  America  Re paid  dividends  of $53.4  million,  $30.1
million and $8.3 million,  respectively.  Chartwell  Insurance paid dividends of
$30.3 million in 1999 and $3.0 million in 1997.  Chartwell Insurance did not pay
any dividends in 1998. None of Trenwick's other U.S. insurance subsidiaries paid
any dividends in 1999, 1998 or 1997.


                                       32
<PAGE>

Under the applicable  laws of the United  Kingdom,  Trenwick  Holdings  Limited,
Chartwell   Holdings  Limited  and  their   respective   subsidiaries  may  make
shareholder  distributions  only  from  accumulated  realized  profits,  net  of
accumulated realized losses. In addition,  under the UK Insurance Companies Act,
Trenwick  International  is not  permitted to make any  distribution  that would
reduce its net assets below the required  minimum margin of solvency  which,  as
determined under the U.K. Financial Service  Authority's rules, is approximately
$25.8 million as of September 30, 2000. Trenwick  International must also notify
the U.K.  Financial  Services  Authority  of any  proposal  to  declare or pay a
dividend  on any of its share  capital.  Under  Lloyd's  regulations,  Chartwell
Managing Agents is not permitted to make any  distribution  that would cause its
assets to fall below any of Chartwell  Managing  Agents' share capital,  minimum
net current asset margin or minimum net asset margin.  As of September 30, 2000,
the highest of the three tests required  Chartwell  Managing  Agents to maintain
approximately $1.0 million of capital.

Reinsurance  agreements  provide for recovery of a portion of certain claims and
claims expenses from  reinsurers.  Trenwick remains liable in the event that the
reinsurer is unable to meet its  obligation;  however,  Trenwick  holds  partial
collateral under these agreements.

Regulatory Matters

Trenwick and its  subsidiaries  are subject to  regulatory  oversight  under the
insurance  statutes and regulations of the  jurisdictions  in which they conduct
business,  including  all states of the United  States,  the United  Kingdom and
Bermuda.  These  regulations  vary from  jurisdiction  to  jurisdiction  and are
generally  designed to protect ceding insurance  companies and  policyholders by
regulating   Trenwick's   financial  integrity  and  solvency  in  its  business
transactions  and  operations.  Many of the insurance  statutes and  regulations
applicable to Trenwick's  subsidiaries relate to reporting and enable regulators
to closely monitor their  performance.  Reports typically required the inclusion
of information  concerning  Trenwick's capital structure,  ownership,  financial
condition and general business operations.

Trenwick  International  is subject to the  regulatory  authority  of the United
Kingdom  Financial  Services  Authority.  Both  Chartwell  Managing  Agents  and
Trenwick's  dedicated  Lloyd's  underwriting  entities,  as a  Lloyd's  managing
general  agent and  Lloyd's  corporate  members,  respectively,  are  subject to
regulation and supervision by the Council of Lloyd's.  Lloyd's  operates under a
self-regulatory  regime  under  the  Lloyd's  Act 1982 and has the power to set,
interpret and change the rules which govern the operation of the Lloyd's market,
subject to regulation for solvency purposes by the Financial Services Authority.
Lloyd's  prescribes,  in respect of its managing  agents and corporate  members,
certain minimum standards relating to their management and control, solvency and
various other requirements.  In addition,  Lloyd's imposes  restrictions against
persons  becoming  controllers  and major  shareholders  of managing  agents and
corporate  members  without the consent of Lloyd's first has been obtained.  The
United Kingdom  government has established the Financial Services Authority as a
single  regulator  to  supervise  securities,  banking and  insurance  business,
including Lloyd's.  When the Financial Services and Market Bill becomes law, the
Financial  Services  Authority  will have wide  authorization  and  intervention
powers in relation to Lloyd's. A consultation  process has commenced in relation
to Lloyd's regulatory framework.

                                       33
<PAGE>

LaSalle Re and LaSalle Re Capital are  regulated  by the  Insurance  Act,  which
provides  that no person shall carry on an insurance  business in or from within
Bermuda unless  registered as an insurer under the Insurance Act by the Minister
of Finance.  Under the Insurance Act,  insurance  business includes  reinsurance
business.  The Minister,  in deciding whether to grant  registration,  has broad
discretion  to act as he things  fit in the public  interest.  The  Minister  is
required by the  Insurance  Act to determine  whether the applicant is a fit and
proper body to be engaged in the insurance business and, in particular,  whether
it  has,  or  has  available  to  it,  adequate  knowledge  and  expertise.  The
registration  of an applicant as an insurer is subject to its complying with the
terms of its  registration  and such other conditions as the Minister may impose
at any time.

The Insurance Act distinguishes  between insurers carrying on long-term business
and insurers carrying on general  business.  There are four  classifications  of
insurers  carrying  on general  business,  with Class 4 insurers  subject to the
strictest  regulation.  LaSalle Re is registered as a Class 4 insurer in Bermuda
and is regulated as such under the Insurance Act.

The Insurance Act imposes on Bermuda insurance companies solvency, and liquidity
standards  and auditing and  reporting  requirements  and grants to the Minister
powers to  supervise,  investigate  and  intervene  in the affairs of  insurance
companies.  Although  LaSalle Re Capital is governed by the Insurance Act, it is
exempted  from  complying  with  most  of the  filings  required  to be  made by
insurance companies by section 57 of the Insurance Act.

The United States National Association of Insurance  Commissioners  ("NAIC") has
adopted  Risk-Based  Capital  ("RBC")  requirements  for  property  and casualty
insurance companies to evaluate the adequacy of statutory capital and surplus in
relation to investment  and  insurance  risks such as asset  quality,  asset and
liability  matching,  loss reserve adequacy and other business factors.  The RBC
formula  is used by  state  insurance  regulators  as an early  warning  tool to
identify,  for the purpose of initiating regulatory action,  insurance companies
that potentially are inadequately capitalized.  In addition, the formula defines
minimum  capital  standards  that  supplement  the  system of low fixed  minimum
capital  and  surplus  requirements  on  a  state-by-state   basis.   Regulatory
compliance  is  determined  by a  ratio  of the  enterprise's  regulatory  total
adjusted  capital to its  authorized  control level RBC, as defined by the NAIC.
Enterprises  below  specific  trigger  points or ratios  are  classified  within
certain levels, each of which requires specific corrective action. The ratios of
Total  Adjusted  Capital to Authorized  Control Level RBC for each of Trenwick's
United States  insurance  company  subsidiaries  exceeded all of the RBC trigger
points at September 20, 2000.


                                       34
<PAGE>

In March  1998,  the NAIC  adopted  the  Codification  of  Statutory  Accounting
Principles ("Codification").  The Codification, which is intended to standardize
regulatory  accounting and reporting for the insurance industry,  is proposed to
be January 1, 2001. The Codification provides guidance for areas where statutory
accounting  has been silent and changes  current  statutory  accounting  in some
areas. However,  statutory accounting principles will continue to be established
by individual  state laws and permitted  practices.  Effective  January 1, 2001,
Connecticut,  New York and North  Dakota,  the states of domicile of  Trenwick's
U.S. insurance subsidiaries, are adopting the Codification. It is uncertain what
effect  adoption  of the  Codification  for  the  preparation  of the  statutory
financial  statements of Trenwick's U.S.  insurance  subsidiaries  would have on
those statutory financial statements.

Quantitative and Qualitative Disclosure About Market Risk

The following  sections  address the  significant  market risks  associated with
Trenwick's  business  activities as of the quarter ended  September 30, 2000 and
the year ended December 31, 1999.  The third quarter 2000 risk analysis  differs
from that of 1999  because it includes  the assets and  liabilities  of Trenwick
Group Inc. The 1999  comparative  data only reflects LaSalle Re Holdings Limited
information.  Trenwick's  primary market risk exposures  are:  foreign  currency
exchange  risk, in  particular  the U.S.  dollar to the British pound  sterling;
interest  rate risk on fixed and  variable  rate U.S.  dollar and British  pound
sterling  denominated  short and long-term  debt  instruments;  and equity price
risk.  With respect to the Trenwick  investment  portfolio,  the risk management
strategy is to place its  investments  with high credit  quality  issuers and to
limit  the  amount  of  credit  exposure  with  respect  to  particular  ratings
categories and any one issuer. Trenwick selects investments with characteristics
such as  duration,  yield,  currency  and  liquidity  to reflect the  underlying
characteristics of related estimated claim liabilities.

As of  September  30, 2000  Trenwick`s  exposure to high yield  investments  was
minimal.  While these  investments  are more  susceptible to credit risk,  their
total  market  value at  September  30,  2000  represents  less than 3% of total
investments,  and therefore management believes that the exposure to credit risk
is not material.  Trenwick has no derivatives and its investments do not contain
terms that may result in potential losses due to leverage.

Limited  information  is  available  with  respect  to the  investments  held by
Chartwell Managing Agents' syndicates,  and therefore, risk information provided
does not include such data.  Some or all of the risks  described in this section
may apply to the investments held by Chartwell Managing Agents' syndicates.

The  borrowings  of  Trenwick  are  summarized  in the  notes  to the  financial
statements.


                                       35
<PAGE>

Foreign Currency Exchange Rate Risk

Foreign  currency risk is the risk that Trenwick will incur economic  losses due
to adverse changes in foreign  currency  exchange  rates.  This risk arises from
Trenwick's international operations, debt obligations and securities denominated
in  foreign  currencies  and  foreign  equity  investments.  Trenwick  generally
conducts its international  businesses  through foreign operating entities which
generally  maintain  assets and liabilities in local  currencies,  substantially
limiting  exchange rate risk to net assets  denominated in the foreign  currency
which is the British  pound  sterling.  At  September  30, 2000 and December 31,
1999,  Trenwick's net investment in foreign subsidiaries was approximately $37.5
and  $0.0  million,  respectively.   Debt  obligations  denominated  in  foreign
currencies were $16.6 million and foreign equity  investments were $12.1 million
at September  30, 2000.  Trenwick's  reinsurance,  international  insurance  and
Lloyd's  operations all have exposures to movements in various currencies around
the world  (particularly  the British pound sterling,  the Euro and the Canadian
dollar),  as such  businesses are  denominated in those  currencies.  Therefore,
changes in currency exchange rates affect Trenwick's Balance Sheet, Statement of
Operations and Statement of Cash Flows.  This exposure is somewhat  mitigated by
the fact that premiums received are invested in the same currency portfolios, to
partially   offset  related   unpaid  claims  and  claims  expense   liabilities
denominated in the same currency.

Management  estimates  that a 10%  immediate  unfavorable  change in each of the
foreign currency exchange rates to which Trenwick is exposed as of September 30,
2000 would decrease the fair value of Trenwick's foreign  denominated net assets
by approximately  $22.1 million,  which is comprised  primarily of British pound
sterling.  At December 31, 1999,  the same 10% shift in currency  exchange rates
would result in a potential loss in fair value of approximately $0.3 million.

Interest Rate Risk

Trenwick's  fixed maturity  investments and indebtedness are subject to interest
rate risk.  Increases  and  decreases in  prevailing  interest  rates  generally
translate  into  decreases  and  increases  in the fair value of fixed  maturity
investments  and the interest  payable on Trenwick's  outstanding  variable rate
debt. Additionally, the fair value of interest rate sensitive instruments may be
affected by the  creditworthiness  of the issuer, a prepayment option,  relative
values of alternative investments, liquidity of the investment and other general
market conditions.

Trenwick monitors its sensitivity to interest rate risk by evaluating the change
in its financial assets and liabilities  relative to hypothetical  increases and
decreases in interest  rates.  It is assumed that the changes occur  immediately
and uniformly to each category of instrument containing interest rate risks. The
hypothetical  changes in market interest rates reflect what could be deemed best
or worst case scenarios.  Significant  variations in market interest rates could
produce changes in the timing of repayments due to prepayment options available.
The fair  value of such  instruments  could be  affected  and  therefore  actual
results might differ from those reflected in this summary.

A 100 basis point increase in market interest rates would result in an estimated
pre-tax loss in the fair value of these instruments of $43.7 and $8.8 million at
September 30, 2000 and December 31, 1999,  respectively.  Similarly, a 100 basis
point  decrease in market  interest  rates would result in an estimated  pre-tax
gain in the fair  value of  these  instruments  of  $42.4  and $8.9  million  at
September 30, 2000 and December 31, 1999, respectively.

                                       36
<PAGE>

Trenwick has not experienced  unrealized gains or losses to the extent indicated
above.

Equity Price Risk

The carrying  values of  investments  subject to equity price risks are based on
quoted market prices or  management's  estimates of fair value as of the balance
sheet date.  Market prices are subject to  fluctuation  and,  consequently,  the
amount realized in the subsequent sale of an investment may significantly differ
from the reported  market value.  Fluctuation  in the market price of a security
may result from perceived changes in the underlying economic  characteristics of
the investee,  the relative price of alternative  investments and general market
conditions.  Furthermore,  amounts realized in the sale of a particular security
may be affected by the relative quantity of the security being sold.

Of Trenwick's  $117.8  million  equity  portfolio at September 30, 2000,  $100.7
million of common  equity  investments  are subject to equity  risk.  Trenwick's
potential  exposure on equity securities  subject to equity risk is estimated in
terms of an  immediate  10% drop in  equity  prices  from  those  prevailing  at
September 30, 2000 which would result in a $10.1 million loss.  Trenwick did not
maintain a common equity portfolio at December 31, 1999.

The fair  value  estimates  shown are  based on the  composition  of the  equity
security  portfolio at September 30, 2000 and these  exposures  will change as a
result of ongoing portfolio activities in response to management's assessment of
changing market conditions and available investment opportunities.

The above  analyses  do not take into  account  any  correlation  among  foreign
currency  exchange rates, or any  correlation  among various markets (i.e.,  the
fixed income markets and foreign exchange and equity markets). Trenwick's actual
experience  may  differ  from the  results  noted  above due to the  correlation
assumptions  utilized,  or if  events  occur  that  were  not  included  in  the
methodology,  such as significant  liquidity or market events.  The selection of
the amount of increases or decreases in currency exchange rates,  interest rates
and equity values in the above analyses  should not be construed as a prediction
of future market events,  but rather, to illustrate the potential impact of such
an event.

Goodwill

Goodwill was $21.0  million at  September  30, 2000,  or  approximately  3.3% of
consolidated shareholders' equity. Goodwill represents the unamortized excess of
purchase  price  over  the  fair  value  of net  assets  of  acquired  entities.
Identified intangible assets represent 7.7 million.  Trenwick amortizes goodwill
and identified intangible assets on a straight-line basis over twenty-five years
and five years,  respectively.  The risk  associated  with the carrying value of
goodwill and identified  intangible  assets is whether future  operating  income
(before  amortization  of goodwill  and  identified  intangible  assets) will be
sufficient  on an  undiscounted  basis to recover the carrying  value.  Trenwick
regularly  evaluates the  recoverability  of goodwill and identified  intangible
assets and  believes  such  amounts  are  currently  recoverable.  However,  any
significant  change in the useful  lives of  goodwill or  identified  intangible
assets,  as estimated by  management,  could have a material  adverse  effect on
Trenwick's results of operations and financial condition.

                                       37
<PAGE>


Accounting Standards

Accounting for Derivative Instruments and Hedging Activities - SFAS No. 133
Effective  January  1,  2001,  Trenwick  expects  to  adopt  the new  accounting
standard,  "Accounting for Derivative Instruments and Hedging Activities," which
requires all  derivatives  to be  recognized on the balance sheet at fair value.
The Company is reviewing the impact of the implementation of the standard on its
financial  statement.   Because  the  Company  has  no  significant   derivative
instruments or hedging  activities,  management  believes the impact will not be
material.

The Euro

On January 1, 1999, eleven of the fifteen member countries of the European Union
established  a fixed  conversion  ratio  between  their local  currencies  and a
newly-formed  currency,  the "Euro".  The Euro began trading on foreign currency
exchanges  on January  1,  1999.  Beginning  in  January  2002,  coins and paper
currency  denominated in Euros will be issued and local currencies of the eleven
countries  will  be  withdrawn  from   circulation.   As  Trenwick   conducts  a
considerable amount of business in countries participating in the Euro, work was
undertaken  in 1998 to ensure  that the  introduction  of the Euro would have no
adverse  effect on  Trenwick's  business.  Consequently,  Trenwick  modified its
computer systems to accommodate  transactions denominated in the Euro. The total
cost for implementing these changes was not material. Trenwick believes the Euro
conversion  will  not  have a  material  impact  on its  consolidated  financial
position or results from operations.

Safe Harbor Disclosure

In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
Litigation Reform Act of 1995,  Trenwick sets forth below cautionary  statements
identifying  important  risks and  uncertainties  that  could  cause its  actual
results to differ  materially from those that might be projected,  forecasted or
estimated in its "forward-looking  statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of
1934, made by or on behalf of Trenwick in this Quarterly Report on Form 10-Q and
in press releases, written statements or documents filed with the Securities and
Exchange Commission, or in its communications and discussions with investors and
analysts in the normal  course of  business  through  meetings,  phone calls and
conference  calls.  Such  statements  may  include,  but  are  not  limited  to,
projections  of premium  revenue,  investment  income,  other  revenue,  losses,
expenses,  earnings (including earnings per share), cash flows, plans for future
operations,  common  shareholders'  equity  (including  book  value per  share),
investments,  financing  needs,  capital  plans,  dividends,  plans  relating to
products  or  services  of  Trenwick  and  estimates  concerning  the effects of
litigation or other  disputes,  as well as assumptions  for any of the foregoing
and generally expressed with words such as "believes,"  "estimates,"  "expects,"
"anticipates,"  "plans,"  "projects,"  "forecasts,"  "goals," "could have," "may
have," and similar expressions.


                                       38
<PAGE>

Forward-looking  statements  involve known and unknown risks and  uncertainties,
which  may  cause   Trenwick's   results   to   differ   materially   from  such
forward-looking  statements.  These risks and uncertainties include, but are not
limited to, the following:

-    Changes  in the level of  competition  in the  domestic  and  international
     reinsurance  or  primary  insurance  markets  that  affect  the  volume  or
     profitability  of  Trenwick's  property/casualty  business.  These  changes
     include,  but are  not  limited  to,  changes  in the  intensity  of  price
     competition, the entry of new competitors, existing competitors exiting the
     market and the development of new products by new and existing competitors;

-    Changes  in  the  demand  for  reinsurance,  including  changes  in  ceding
     companies' risk retentions and changes in the demand for excess and surplus
     lines insurance coverages;

-    The ability of Trenwick to execute its strategies in its property/casualty
     operations;

-    Catastrophe   losses    in    Trenwick's    domestic   and    international
     property/casualty businesses;

-    Adverse  development  on   property/casualty   claims  and  claims  expense
     liabilities related to business written in prior years, including,  but not
     limited to,  evolving  case law and its effect on  environmental  and other
     latent injury claims,  changing  government  regulations,  newly identified
     toxins,  newly reported claims,  new theories of liability or new insurance
     and reinsurance contract interpretations;

-    Changes in Trenwick's property/casualty retrocessional arrangements;

-    Lower than estimated  retrocessional  or  reinsurance  recoveries on unpaid
     losses,  including,  but not  limited  to,  losses  due to a decline in the
     creditworthiness of Trenwick's retrocessionaires or reinsurers;

-    Increases in interest rates,  which may cause a  reduction  in  the  market
     value of Trenwick's  fixed income portfolio,  and its common  shareholders'
     equity;

-    Decreases in interest rates which may cause a reduction of income earned on
     new cash flow from  operations  and the  reinvestment  of the proceeds from
     sales or maturities of existing investments;

-    A decline in the value of Trenwick's equity investments;

-    Changes in the composition of Trenwick's investment portfolio;

-    Credit losses on Trenwick's investment portfolio;

-    Adverse  results in  litigation  matters,  including,  but not  limited to,
     litigation related to environmental, asbestos and other potential mass tort
     claims;


                                       39
<PAGE>

-        The impact of mergers and acquisitions;

-        Gains or losses related to changes in foreign currency exchange rates;
         and

-        Changes in Trenwick's capital needs.

In  addition  to the  factors  outlined  above  that  are  directly  related  to
Trenwick's  businesses,  Trenwick  is also  subject to general  business  risks,
including, but not limited to, adverse state, federal or foreign legislation and
regulation,  adverse  publicity or news  coverage,  changes in general  economic
factors and the loss of key employees.

The  facts  set  forth  above  should  be  considered  in  connection  with  any
forward-looking  statement  contained in this  Quarterly  Report.  The important
factors that could affect such forward-looking statements are subject to change,
and  Trenwick  does not intend to update any  forward-looking  statement  or the
foregoing list of important factors. By this cautionary note Trenwick intends to
avail itself of the safe harbor from liability  with respect of  forward-looking
statements provided by Section 27A and Section 21E referred to above.














                                       40
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6.          Exhibits and Reports on Form 8-K.

            (a)  Exhibits

                    3.1     Memorandum of Association  Incorporated by reference
                            to Exhibit 3.1 to Registration
                            Statement on Form S-4 (File No. 333-44290)).
                    3.2     Bye-Laws  (Incorporated by reference to Exhibit 3.3
                            to Registration Statement on Form S-4
                            (File No. 333-44290)).
                    10.1    Credit Agreement,  dated as of November 24, 1999 and
                            Amended and Restated as of September 27, 2000, among
                            Trenwick  America  Corporation,   Trenwick  Holdings
                            Limited,  various lending institutions,  First Union
                            National Bank, as Syndication  Agent, Fleet National
                            Bank, as  Documentation  Agent,  and Chase Manhattan
                            Bank, as Administrative Agent.
                    10.2   (a)   Indenture,  dated    as  of  January 31,  1997,
                                 between  Trenwick  Group  Inc.  and  The  Chase
                                 Manhattan Bank, as Trustee, with respect to the
                                 8.82% Junior  Subordinated  Deferrable Interest
                                 Debentures.   Incorporated   by   reference  to
                                 Exhibit  4.2(a) to Trenwick Group Inc.'s Annual
                                 Report on Form 10-K for the year ended December
                                 31, 1996 (File No. 0-14737).
                    10.2   (b)   Amended  and  Restated Declaration o f Trust of
                                 Trenwick  Capital  Trust I, dated as of January
                                 31, 1997.  Incorporated by reference to Exhibit
                                 4.2(b) to Trenwick  Group Inc.'s  Annual Report
                                 on Form 10-K for the year  ended  December  31,
                                 1996 (File No. 0-14737).
                    10.2   (c)   Exchange Capital Securities Guarantee Agreement
                                 dated as of July 25,  1997,  between  Trenwick
                                 and  The  Chase  Manhattan  Bank,  as  Trustee.
                                 Incorporated  by reference  to  Exhibit 4.7  to
                                 Trenwick  Group Inc.'s  Registration  Statement
                                 on Form S-4 (File No. 333-28707).
                    10.4    First Supplemental Indenture,  dated as of September
                            27,  2000,  among  Trenwick  Group  Inc.,   Trenwick
                            America Corporation and The Chase Manhattan Bank, as
                            Trustee,   with   respect   to  the   8.82%   Junior
                            Subordinated    Deferrable    Interest    Debentures
                            (Incorporated   by   reference   to  Exhibit 4.2  to
                            Trenwick   America  Corporation's  Current Report on
                            Form   8-K,  filed  on  November 16, 2000  (File No.
                            0-31967)
                    10.5    Indenture,  dated  as of  March  27,  1998,  between
                            Trenwick  Group Inc. and The First  National Bank of
                            Chicago, as Trustee, with respect to the $75 million
                            principal  amount of 6.7% Senior  Notes due April 1,
                            2003.  Incorporated  by  reference to Exhibit 4.2 to
                            Trenwick Group Inc.'s  Quarterly Report on Form 10-Q
                            for the  quarter  ended  March  31,  1998  (File No.
                            1-15389).
                    10.6    First Supplemental Indenture,  dated as of September
                            27,  2000,  among  Trenwick  Group  Inc.,   Trenwick
                            America  Corporation,  and Bank One  Trust  Company,
                            N.A.,  as  successor  to  First   National  Bank  of
                            Chicago, as Trustee, with respect to the $75 million
                            principal  amount of 6.7% Senior  Notes due April 1,
                            2003.  Incorporated  by  reference to Exhibit 4.4 to
                            Trenwick  America  Corporation's  Current  Report on
                            Form  8-K   filed   on   November 16, 2000 (File No.
                            0-31967)
                    10.7    Indenture,  dated as of  December 1,   1995, between
                            Piedmont Management Company Inc.  and Fleet Bank, as
                            Trustee,  for  the  Contingent  Interest  Notes  due
                            June 30, 2006. Incorporated by reference to  Exhibit
                            4.5  to  Chartwell  Re   Corporation's  Registration
                            Statement  on Form S-1 (File No. 333-678).


                                       41
<PAGE>
                    10.8    First Supplemental  Indenture,  dated as of December
                            13,  1995,   among  Piedmont   Management   Company,
                            Chartwell Re Corporation  and Fleet Bank, as Trustee
                            under  the  Contingent  Interest  Notes due June 30,
                            2006.  Incorporated  by  reference to Exhibit 4.6 to
                            Chartwell Re Corporation's Registration Statement on
                            Form S-1 (File No. 333-678).
                    10.9    Second Supplemental  Indenture,  dated as of October
                            27, 1999,  among Chartwell Re Corporation,  Trenwick
                            Group Inc. and State Street Bank and Trust  Company,
                            as successor to Fleet Bank, as Trustee, with respect
                            to the Contingent Interest Notes due June 30,  2006.
                            Incorporated by reference to Exhibit 4.7 to Trenwick
                            America  Corporation's  Current Report on  Form 8-K,
                            filed on November 16, 2000 (File No. 0-31967).
                    10.10   Third Supplemental Indenture,  dated as of September
                            27,  2000,  among  Trenwick  Group  Inc.,   Trenwick
                            America  Corporation and State Street Bank and Trust
                            Company,  as  successor  to Fleet  Bank,  as Trustee
                            under  the  Contingent  Interest  Notes due June 30,
                            2006.  Incorporated by reference to  Exhibit  4.8 to
                            Trenwick  America  Corporation's Current  Report  on
                            Form 8-K,  filed  on   November  16, 2000  (File No.
                            0-31967).
                    10.11  Catastrophe   Equity   Securities   Issuance  Option
                            Agreement, dated as of July 1, 1997, between LaSalle
                            Re  Holdings  Limited  on the one hand and  European
                            Reinsurance     Company    of    Zurich,     Allianz
                            Aktiengesellschaft, Continental Casualty Company and
                            CIC-Hilldale,  Inc. on the other hand.  Incorporated
                            by reference to Exhibit 10.31 to LaSalle Re Holdings
                            Limited  Annual  Report on Form 10-K for the  fiscal
                            year ended September 30, 1997 (File No. 1-12823).
                    10.12  Consent,  dated December 18, 1999, under Catastrophe
                            Equity Securities  Issuance Option Agreement,  dated
                            as of July 1, 1997, executed by European Reinsurance
                            Company of Zurich.
                    10.13  Consent  Agreement,  dated September 27, 2000, under
                            Catastrophe   Equity   Securities   Issuance  Option
                            Agreement,  dated as of July 1,  1997,  executed  by
                            European  Reinsurance Company of Zurich,  LaSalle Re
                            Holdings Limited and Trenwick Group Ltd.
                    10.14  Amended and Restated Change  of  Control  Agreement,
                            dated September 26, 2000, between Trenwick Group Ltd
                            and James F. Billett, Jr.*
                    10.15  Form  of  Amended  and   Restated  Change of Control
                            Agreement,  dated    September  26,  2000,  between
                            Trenwick Group Ltd.  and senior officers of Trenwick
                            Group Ltd. and Trenwick America Corporation.*
                    10.16  Form of Assumption Letter, dated September 27, 2000,
                            by Trenwick Group Ltd. assuming the obligations of
                            Trenwick Group Inc. under the Change of Control
                            Agreements.*
                     27.1   Financial Data Schedule

    *Management contract or compensatory plan or arrangement.

            (b)  Reports on Form 8-K

                 Trenwick Group Ltd. did not file any Reports on Form 8-K during
                 the quarter ended  September 30,
                 2000.

                                       42
<PAGE>

                               Trenwick Group Ltd.
                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



Date: November 17, 2000             /s/  James F. Billett, Jr.
                                    --------------------------------
                                    Name:  James F. Billett, Jr.
                                    Title: Chairman, President and
                                           Chief Executive Officer



Date:  November 17, 2000            /s/ Coleman D. Ross
                                    --------------------------------
                                    Name:  Coleman D. Ross
                                    Title  Executive Vice President and
                                           Chief Financial Officer








                                       43