================================================================================

                       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 June 30, 2001.

|_|  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 |X| No |_|

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

                                                             Shares Outstanding
Description of Class                                       as of August 13, 2001
Common Shares - $.10 par value                                   36,855,916
<PAGE>

                               TRENWICK GROUP LTD.
                               INDEX TO FORM 10-Q

                     PART I - FINANCIAL INFORMATION

                                                                            Page
                                                                            ----
ITEM 1.      Unaudited Consolidated Financial Statements
             Consolidated Balance Sheet
             June 30, 2001 and December 31, 2000 ..........................    1

             Consolidated Statement of Operations and Comprehensive Income
             Three and Six Months Ended June 30, 2001 and 2000 ............    2

             Consolidated Statement of Cash Flows
             Three and Six Months ended June 30, 2001 and 2000 ............    3

             Consolidated Statement of Changes in Common Shareholders'
             Equity Six Months Ended June 30, 2001 and 2000 ...............    4

             Notes to Unaudited Consolidated Financial Statements .........    5

ITEM 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations ....................................    9

                           PART II - OTHER INFORMATION

ITEM 1.      Legal proceedings ............................................   21

ITEM 2.      Changes in Securities and Use of Proceeds ....................   21

ITEM 3.      Defaults Upon Senior Securities ..............................   21

ITEM 4.      Submission of Matters to a Vote of Security Holders ..........   21

ITEM 5.      Other Information ............................................   22

ITEM 6.      Exhibits and Reports on Form 8-K .............................   22

Signatures ................................................................   23
<PAGE>

                               Trenwick Group Ltd.
                           Consolidated Balance Sheet
            (Amounts expressed in thousands of United States dollars,
                        except share and per share data)
                 June 30, 2001 (Unaudited) and December 31, 2000

<TABLE>
<CAPTION>
                                                               2001           2000
                                                           -----------    -----------
<S>                                                        <C>            <C>
ASSETS
Debt securities available for sale, at fair value          $ 1,906,498    $ 1,813,678
Equity securities at fair value                                 29,839        115,901
Cash and cash equivalents                                      280,825        311,001
Accrued investment income                                       35,661         38,171
Premiums receivable                                            523,653        473,245
Reinsurance recoverable balances, net                        1,047,801        932,051
Prepaid reinsurance premiums                                   161,716        147,399
Deferred policy acquisition costs                              114,981        100,423
Net deferred income taxes                                      131,017        104,889
Other assets                                                   172,219        183,294
                                                           -----------    -----------
Total assets                                               $ 4,404,210    $ 4,220,052
                                                           ===========    ===========
LIABILITIES
Unpaid claims and claims expenses                          $ 2,550,102    $ 2,408,926
Unearned premium income                                        568,342        496,338
Reinsurance balances payable                                   134,843        133,160
Indebtedness                                                   298,197        286,805
Other liabilities                                               95,265         90,866
                                                           -----------    -----------
Total liabilities                                            3,646,749      3,416,095
                                                           -----------    -----------
MINORITY INTEREST
Mandatorily redeemable preferred capital securities
  of subsidiary trust holding solely junior subordinated
  debentures of U.S. subsidiary                                 68,591         76,770
Preferred shares of Bermuda subsidiary                          75,000         75,000
                                                           -----------    -----------
Total minority interest                                        143,591        151,770
                                                           -----------    -----------
COMMON SHAREHOLDERS' EQUITY
Common shares, $0.10 par value, 36,855,913 and
   36,665,103 shares issued and outstanding                      3,686          3,667
Additional paid in capital                                     578,546        575,401
Deferred compensation under share award plans                   (5,911)        (2,660)
Retained earnings                                               23,645         58,485
Accumulated other comprehensive income                          13,904         17,294
                                                           -----------    -----------
Total common shareholders' equity                              613,870        652,187
                                                           -----------    -----------
Total liabilities, minority interest and common
   shareholders' equity                                    $ 4,404,210    $ 4,220,052
                                                           ===========    ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                      -1-
<PAGE>

                               Trenwick Group Ltd.
    Consolidated Statement of Operations and Comprehensive Income (Unaudited)
(Amounts expressed in thousands of United States dollars, except per share data)
                Three and Six Months Ended June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                    Three Months                Six Months
                                               ----------------------    ----------------------
                                                  2001         2000         2001         2000
                                               ---------    ---------    ---------    ---------
<S>                                            <C>          <C>          <C>          <C>
Revenues:
Net premiums earned                            $ 224,571    $  28,776    $ 427,346    $  55,988
Net investment income                             33,186        9,251       65,371       18,187
Net realized investment gains (losses)             2,272           38       11,130       (2,186)
Other income                                       1,211           --        2,052           --
                                               ---------    ---------    ---------    ---------
Total revenues                                   261,240       38,065      505,899       71,989
                                               ---------    ---------    ---------    ---------

Expenses:
Claims and claims expenses incurred              235,551        9,720      373,832       53,266
Policy acquisition costs                          63,100        6,132      122,456       10,642
Underwriting expenses                             19,654        3,363       35,540        7,130
General and administrative expenses                7,389        2,417       11,277        2,869
Interest expense and dividends on
   preferred shares of subsidiaries                9,627          306       20,453          611
Foreign currency losses (gains)                      469         (203)       1,535         (373)
                                               ---------    ---------    ---------    ---------
Total expenses                                   335,790       21,735      565,093       74,145
                                               ---------    ---------    ---------    ---------

Income (loss) before other minority interest
   interest and income taxes                     (74,550)      16,330      (59,194)      (2,156)
Other minority interest in net income
   (loss) of subsidiary                               --        3,418           --       (1,258)
                                               ---------    ---------    ---------    ---------
Income (loss) before income taxes (benefit)      (74,550)      12,912      (59,194)        (898)
Applicable income taxes (benefit)                (23,744)          --      (27,301)          --
                                               ---------    ---------    ---------    ---------
Net income (loss)                                (50,806)      12,912      (31,893)        (898)
Dividends on preferred shares                         --        1,641           --        3,281
                                               ---------    ---------    ---------    ---------
Net income (loss) available to
   common shareholders                         $ (50,806)   $  11,271    $ (31,893)   $  (4,179)
                                               =========    =========    =========    =========
EARNINGS PER SHARE
Basic earnings (loss) per common share         $   (1.38)   $    0.72    $   (0.87)   $   (0.27)
                                               =========    =========    =========    =========
Diluted earnings (loss) per common share       $   (1.38)   $    0.71    $   (0.87)   $   (0.27)
                                               =========    =========    =========    =========

COMPREHENSIVE INCOME (LOSS):
Net income (loss)                              $ (50,806)   $  12,912    $ (31,893)   $    (898)
                                               ---------    ---------    ---------    ---------
Other comprehensive income (loss):
   Net unrealized investment gains (losses)       (5,934)          98        1,293        1,033
   Foreign currency translation adjustments          595          (31)      (4,683)         (31)
                                               ---------    ---------    ---------    ---------
   Total other comprehensive income (loss)        (5,339)          67       (3,390)       1,002
                                               ---------    ---------    ---------    ---------
Comprehensive income (loss)                    $ (56,145)   $  12,979    $ (35,283)   $     104
                                               =========    =========    =========    =========
</TABLE>

The accompanying notes are an integral part of these statements.


                                      -2-
<PAGE>

                               Trenwick Group Ltd.
                Consolidated Statement of Cash Flows (Unaudited)

            (Amounts expressed in thousands of United States dollars)

                Three and Six Months Ended June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                      Three Months               Six Months
                                                 ----------------------    ----------------------
                                                    2001         2000         2001         2000
                                                 ---------    ---------    ---------    ---------
<S>                                              <C>          <C>          <C>          <C>
OPERATING ACTIVITIES
Premiums collected, net of acquisition costs     $ 240,272    $  36,786    $ 463,022    $  63,482
Ceded premiums paid net of acquisition costs       (88,504)     (20,366)    (162,089)     (16,166)
Claims and claims expenses paid                   (188,938)     (44,837)    (400,890)     (65,194)
Claims and claims expenses recovered                28,496        6,433       80,553        9,413
Underwriting expenses paid                         (23,461)      (9,379)     (53,541)     (11,542)
                                                 ---------    ---------    ---------    ---------
Cash for underwriting activities                   (32,135)     (31,363)     (72,945)     (20,007)
Net investment income received                      45,012        8,739       80,116       18,118
Other income received, net of expenses
                                                    (1,124)          --         (220)          --
General and administrative expenses paid            (4,777)          --       (8,999)        (452)
Interest expense and dividends on preferred
  shares of subsidiaries                            (5,458)        (306)     (12,678)        (611)
Income taxes paid                                   (1,022)          --         (697)          --
                                                 ---------    ---------    ---------    ---------
Cash from (for) operating activities                   496      (22,930)     (15,423)      (2,952)
                                                 ---------    ---------    ---------    ---------
INVESTING ACTIVITIES
Purchases of debt securities                      (274,960)     (39,135)    (881,958)    (137,909)
Sales of debt securities                           176,289       64,850      732,770      141,748
Maturities of debt securities                       11,871           --       52,784           --
Purchases of equity securities                          88           --       (2,431)          --
Sales of equity securities                          20,160           --       93,208           --
Effect on cash of exchange rate translation            781           --       (8,398)          --
Other                                               (1,197)          --       (1,988)          --
                                                 ---------    ---------    ---------    ---------
Cash from (for) investing activities               (66,968)      25,715      (16,013)       3,839
                                                 ---------    ---------    ---------    ---------
FINANCING ACTIVITIES
Issuance of indebtedness                            14,000           --       14,000           --
Repayment of indebtedness                               --           --          (29)          --
Purchase of capital securities                          --           --       (8,462)          --
Issuance of common shares                               53          317          328          441
Trenwick Group Ltd. common share
  dividends paid                                    (1,475)          --       (2,947)          --

LaSalle Re Holdings preferred share dividends
  paid prior to business combination                    --       (1,641)          --       (3,281)
Share and option repurchases                            --       (3,131)        (311)      (3,131)
Equity put option premium payments                    (411)          --       (1,319)        (387)
                                                 ---------    ---------    ---------    ---------
Cash from (for) financing activities                12,167       (4,455)       1,260       (6,358)
                                                 ---------    ---------    ---------    ---------

Change in cash and cash equivalents                (54,305)      (1,670)     (30,176)      (5,471)
Cash and cash equivalents, beginning of period     335,130       16,063      311,001       19,864
                                                 ---------    ---------    ---------    ---------
Cash and cash equivalents, end of period         $ 280,825    $  14,393    $ 280,825    $  14,393
                                                 =========    =========    =========    =========
</TABLE>

The accompanying notes are an integral part of these statements.


                                      -3-
<PAGE>

                               Trenwick Group Ltd.
  Consolidated Statement of Changes in Common Shareholders' Equity (Unaudited)
   (Amounts expressed in thousands of United States dollars except share data)
                     Six Months Ended June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                                         2001         2000
                                                                      ---------    ---------
<S>                                                                   <C>          <C>
Common shareholders' equity, beginning of period                      $ 652,187    $ 286,960
COMMON SHARES AND ADDITIONAL PAID IN CAPITAL
Issuance of 194,116 restricted common shares of Trenwick Group Ltd.       4,119           --
Issuance of 15,737 shares of Trenwick Group Ltd. and 20,412 common
  shares of LaSalle Re Holdings for cash under employee
  share purchase plans                                                      328          234
Issuance of 635 common shares of LaSalle Re Holdings under
  employee compensation plan                                                 --            8
Purchase and retirement of 14,609 common shares of Trenwick
   Group Ltd.                                                              (311)          --
Cancellation of 4,429 restricted common shares                              (58)          --
Equity put option premiums, net of applicable minority interest          (1,319)        (317)
Compensation recognized under employee program                              405           42
Change in minority interest                                                  --           71

DEFERRED COMPENSATION UNDER SHARE AWARD PLAN
Restricted common shares awarded                                         (4,119)          --
Compensation expense recognized under employee share purchase
 plans, net of minority interest                                            810          140
Cancellation of restricted common shares                                     58           --

RETAINED EARNINGS
Net loss                                                                (31,893)        (898)
LaSalle Re Holdings preferred share dividends
   prior to business combination                                             --       (3,281)
Trenwick Group Ltd. common share dividends, $0.08 per share              (2,947)          --
Options/share repurchase                                                     --       (2,404)
Change in minority interest                                                  --           22

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss)                                        (3,390)       1,002
                                                                      ---------    ---------
Common shareholders' equity, end of period                            $ 613,870    $ 281,579
                                                                      =========    =========
</TABLE>

The accompanying notes are an integral part of these statements.


                                      -4-
<PAGE>

                               TRENWICK GROUP LTD.
              Notes to Unaudited Consolidated Financial Statements
 (Amounts expressed in thousands of United States dollars except per share data)
                Three and Six Months Ended June 30, 2001 and 2000

Note 1              Organization
Organization        Trenwick  Group  Ltd.  was  formed as a holding  company  in
and Basis           Bermuda to  acquire  two  publicly  held  companies  and the
of Presentation     minority interest in a subsidiary of one of those companies.
                    That transaction, in which Trenwick Group Ltd. issued common
                    shares to acquire  LaSalle  Re  Holdings  Limited,  Trenwick
                    Group Inc. and the minority  interest in LaSalle Re Limited,
                    was completed on September 27, 2000.

                    Trenwick  Group  Ltd.'s  principal  subsidiaries  underwrite
                    specialty  insurance and  reinsurance  through five business
                    platforms:  LaSalle Re Limited, Trenwick America Reinsurance
                    Corporation,   Trenwick  International  Limited,   Chartwell
                    Managing Agents Limited and Canterbury Financial Group Inc.

                    Basis of Presentation

                    The business combination between LaSalle Re Holdings Limited
                    and Trenwick  Group Inc. was  accounted for as a purchase by
                    LaSalle Re Holdings  Limited of Trenwick  Group Inc.  and of
                    the  minority  interest  in  LaSalle Re  Limited,  effective
                    September  27,  2000.   Accordingly,   in  these   financial
                    statements:

                    -    the assets and liabilities  presented  include those of
                         LaSalle Re Holdings  Limited,  the minority interest in
                         LaSalle Re Limited and the former Trenwick Group Inc.;

                    -    the  revenues  and  expenses  of  LaSalle  Re  Holdings
                         Limited have been included for all periods presented;

                    -    the  minority  interest in common  shares and  minority
                         interest in net income of LaSalle Re Limited  have been
                         eliminated  in the three and six months  ended June 30,
                         2001; and

                    -    the revenues and expenses of the former  Trenwick Group
                         Inc.  were excluded from the three and six months ended
                         June 30, 2000 and included for the three and six months
                         ended June 30, 2001.

                    Under the purchase basis of  accounting,  the purchase price
                    was  allocated  to  the  identifiable  assets  acquired  and
                    liabilities assumed, based on their estimated fair values at
                    the date of  acquisition.  The excess of the purchase  price
                    over the estimated  fair value of those net assets  acquired
                    was  recorded  as  goodwill,  and is  being  amortized  over
                    twenty-five years. Refer to Note 5 for discussion  regarding
                    pending changes in accounting for amortization of goodwill.

                    The interim  financial  statements  include the  accounts of
                    Trenwick Group Ltd. and its subsidiaries  after  elimination
                    of  significant   intercompany  accounts  and  transactions.
                    Certain  items  in  prior  financial  statements  have  been
                    reclassified to conform to current presentation.

                    These  interim  financial  statements  have been prepared in
                    conformity  with  accounting  principles  that are generally
                    accepted in the United States of America, sometimes referred
                    to  as  U.S.  GAAP.  To  prepare  these  interim   financial
                    statements,  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


                                      -5-
<PAGE>

                    financial  statements,  as well as the  reported  amounts of
                    revenues and expenses during the reporting  periods.  Actual
                    amounts may differ from these estimates.

                    The interim financial statements are unaudited;  however, in
                    the opinion of management,  the interim financial statements
                    include all adjustments, consisting only of normal recurring
                    adjustments,  necessary for a fair  statement of the results
                    for interim periods. These interim statements should be read
                    in  conjunction  with the audited  financial  statements and
                    related notes  included in the Annual Report on Form 10-K of
                    Trenwick Group Ltd. for the year ended December 31, 2000.

Note 2              The following  tables  present  business  segment  financial
Segment             information  for  Trenwick  Group Ltd.  at June 30, 2001 and
Information         December  31,  2000 and for the three and six  months  ended
                    June 30, 2001 and 2000:

                                                       2001         2000
                                                    ----------   ----------
Total assets:
Worldwide property catastrophe reinsurance          $  591,111   $  557,401
U.S. treaty reinsurance                              1,536,855    1,759,678
International specialty insurance and reinsurance      477,641      473,612
Lloyd's syndicates:
   Continuing                                          940,507      808,483
   Runoff                                              110,725      157,627
U.S. specialty program insurance                       522,492      372,933
Unallocated                                            224,879       90,318
                                                    ----------   ----------
Total assets                                        $4,404,210   $4,220,052
                                                    ==========   ==========

<TABLE>
<CAPTION>
                                                 Three Months          Six Months
                                             -------------------   -------------------
                                               2001       2000       2001       2000
                                             --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>
Total revenues:
Worldwide property catastrophe reinsurance   $ 31,162   $ 31,280   $ 62,173   $ 61,122
U.S. treaty reinsurance                        81,007         --    153,213         --
International specialty insurance and
  reinsurance                                  48,993         --     93,349         --
Lloyd's syndicates:
   Continuing                                  68,978      1,510    142,471      2,682
   Runoff                                       5,830      5,275      7,502      8,185
U.S. specialty program insurance               23,152         --     42,722         --
Unallocated                                     2,118         --      4,469         --
                                             --------   --------   --------   --------
Total revenues                               $261,240   $ 38,065   $505,899   $ 71,989
                                             ========   ========   ========   ========
</TABLE>


                                      -6-
<PAGE>

<TABLE>
<CAPTION>
                                                 Three Months            Six Months
                                             --------------------   --------------------
                                               2001        2000       2001        2000
                                             --------    --------   --------    --------
<S>                                          <C>         <C>        <C>         <C>
Net income (loss):
Worldwide property catastrophe reinsurance   $  8,900    $ 12,744   $ 27,107    $  1,173
U.S. treaty reinsurance                        (1,764)         --      7,496          --
International specialty insurance and
  reinsurance                                 (18,450)         --    (18,877)         --
Lloyd's syndicates:
   Continuing                                 (21,727)        123    (21,306)       (242)
   Runoff                                      (1,223)         45     (2,215)     (1,829)
U.S. specialty program insurance               (8,302)         --     (6,510)         --
Unallocated                                    (8,240)         --    (17,588)         --
                                             --------    --------   --------    --------
Total net income (loss)                      $(50,806)   $ 12,912   $(31,893)   $   (898)
                                             ========    ========   ========    ========
</TABLE>

                    Revenues from transactions between operating segments, which
                    are  immaterial,  have  been  eliminated  in  consolidation.
                    Unallocated  net income (loss)  consists  mainly of interest
                    expense and  dividends on preferred  stock of  subsidiaries,
                    net of income taxes.

Note 3              The following  table sets forth the computation of basic and
Earnings            diluted  earnings  per share  for the  three and six  months
Per Share           ended June 30, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                Three Months                    Six Months
                                                        ----------------------------   ----------------------------
                                                            2001            2000           2001            2000
                                                        ------------    ------------   ------------    ------------
<S>                                                     <C>             <C>            <C>             <C>
INCOME (LOSS) AVAILABLE TO COMMON
  SHAREHOLDERS
Net income (loss) available to common
  shareholders - basic                                  $    (50,806)   $     11,271   $    (31,893)   $     (4,179)
                                                        ============    ============   ============    ============
Net income (loss) available to common
  shareholders - diluted                                $    (50,806)   $     14,689   $    (31,893)   $     (4,179)
                                                        ============    ============   ============    ============
WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING
Weighted average shares outstanding - basic               36,850,753      15,623,910     36,786,880      15,621,653
Net weighted average shares issuable (when
  dilutive) on exercise of stock options and warrants             --       5,038,657             --              --
                                                        ------------    ------------   ------------    ------------
Weighted average shares outstanding - diluted             36,850,753      20,662,567     36,786,880      15,621,653
                                                        ============    ============   ============    ============
Basic earnings (loss) per common share                  $      (1.38)   $       0.72   $      (0.87)   $      (0.27)
                                                        ============    ============   ============    ============
Diluted earnings (loss) per common share                $      (1.38)   $       0.71   $      (0.87)   $      (0.27)
                                                        ============    ============   ============    ============
</TABLE>

Note 4              The components of premiums  written and earned for the three
Underwriting        and six months ended June 30, 2001 and 2000 are as follows:
Activities
                                Three Months               Six Months
                           ----------------------    ----------------------
                              2001         2000         2001         2000
                           ---------    ---------    ---------    ---------
Assumed premiums written   $ 140,148    $  32,080    $ 314,836    $  97,246
Direct premiums written      199,408           --      378,343           --
                           ---------    ---------    ---------    ---------
Gross premiums written       339,556       32,080      693,179       97,246
Ceded premiums written       (94,679)      (4,704)    (187,564)     (21,387)
                           ---------    ---------    ---------    ---------
Net premiums written       $ 244,877    $  27,376    $ 505,615    $  75,859
                           =========    =========    =========    =========


                                      -7-
<PAGE>
                               Three Months               Six Months
                          ----------------------    ----------------------
                             2001         2000         2001         2000
                          ---------    ---------    ---------    ---------
Assumed premiums earned   $  90,752    $  36,887    $ 168,524    $  71,348
Direct premiums earned      216,363           --      413,633           --
                          ---------    ---------    ---------    ---------
Gross premiums earned       307,115       36,887      582,157       71,348
Ceded premiums earned       (82,544)      (8,111)    (154,811)     (15,360)
                          ---------    ---------    ---------    ---------
Net premiums earned       $ 224,571    $  28,776    $ 427,346    $  55,988
                          =========    =========    =========    =========

Note 5              In July  2001,  the  Financial  Accounting  Standards  Board
Accounting          issued  statements   covering   business   combinations  and
Standards           goodwill and other intangible assets,  which are required to
                    be  adopted  at  the   beginning   of  2002.   The  business
                    combination  statement  requires that the purchase method of
                    accounting be used for all business  combinations  initiated
                    after  June 30,  2001.  The  goodwill  and other  intangible
                    assets  statement  changes the expensing of goodwill from an
                    amortization   method   to  an   impairment-only   approach.
                    Amortization  of goodwill,  including  goodwill  recorded in
                    past business combinations, will cease upon adoption of this
                    statement.

                    As of the date of adoption,  Trenwick Group Ltd.  expects to
                    have  unamortized  goodwill  in the amount of $20,209  which
                    will  be  subject  to  the  transition  provisions  of  this
                    statement. Amortization expense related to goodwill was $213
                    and $425 for the three and six months  ended June 30,  2001,
                    respectively.

                    Trenwick  Group Ltd. has not determined the effect that this
                    statement will have on its consolidated  financial  position
                    or results of operations.


                                      -8-
<PAGE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

The following  discussion  highlights  material factors affecting Trenwick Group
Ltd.'s  results of  operations  for the three and six months ended June 30, 2001
and 2000. This  discussion and analysis  should be read in conjunction  with the
unaudited interim financial  statements and notes thereto of Trenwick Group Ltd.
contained in this filing as well as in  conjunction  with the audited  financial
statements  and  related  notes  included  in the Annual  Report on Form 10-K of
Trenwick Group Ltd. for the year ended December 31, 2000.

Overview

Trenwick  Group Ltd. is a Bermuda  holding  company  headquartered  in Hamilton,
Bermuda  whose  principal   subsidiaries   underwrite  specialty  insurance  and
reinsurance.  Trenwick  Group Ltd. was formed in 1999 to acquire  Trenwick Group
Inc.,  LaSalle Re Holdings  Limited and LaSalle Re Limited.  The transaction was
completed on September 27, 2000. Shareholders of Trenwick Group Inc., LaSalle Re
Holdings Limited and LaSalle Re Limited  exchanged their shares on a one-for-one
basis for newly-issued shares of Trenwick Group Ltd. LaSalle Re Holdings Limited
was the accounting acquiror in the Trenwick/LaSalle business combination, and as
such the  financial  statements  reflect the results of operations of LaSalle Re
Holdings  Limited  prior to  September  27,  2000 and the  combined  results  of
operations of LaSalle Re Holdings  Limited and Trenwick  Group Inc. on and after
September 27, 2000.

Trenwick Group Ltd.  operates  through the following  five  principal  operating
platforms:

o LaSalle  Re  Limited,  which is  located  in  Hamilton,  Bermuda,  underwrites
property catastrophe reinsurance on a worldwide basis;

o  Trenwick  America  Reinsurance  Corporation,  which is  located  in  Stamford
Connecticut,  underwrites  treaty  reinsurance  on United  States  property  and
casualty risks,  including United States reinsurance business previously written
by Chartwell Re Corporation subsidiaries;

o  Trenwick  International  Limited,  which  is  located  in  London,   England,
underwrites  specialty  insurance and treaty and  facultative  reinsurance  on a
worldwide basis;

o  Chartwell  Managing  Agents  Limited,  which is located  in London,  England,
manages underwriting syndicates in the Lloyd's market,  principally for Trenwick
Group Ltd.'s own account; and

o Canterbury  Financial Group Inc.,  which is located in Stamford,  Connecticut,
underwrites  specialty insurance through its operating  subsidiaries,  Chartwell
Insurance  Company,  The Insurance  Corporation of New York and Dakota Specialty
Insurance Company.

All of  Trenwick  Group  Ltd.'s  principal  operating  subsidiaries  are rated A
(Excellent)  by A.M.  Best Company and have been  assigned a financial  strength
rating of A+ by Standard and Poor's.  All of Chartwell Managing Agents Limited's
syndicates  enjoy the  benefit  of the  ratings  of  Lloyd's  which is rated "A"
(Excellent)  by A.M. Best Company and has an A+ financial  strength  rating from
Standard & Poor's.  These  ratings are based upon factors that may be of concern
to policy or contract holders,  agents and  intermediaries,  but may not reflect
the  considerations  applicable  to an equity  investment  in a  reinsurance  or
insurance  company.  A change  in any such  rating is at the  discretion  of the
respective rating agencies.


                                      -9-
<PAGE>

Results of  Operations - Three Months Ended June 30, 2001 and Three Months Ended
June 30, 2000

<TABLE>
<CAPTION>
                                                      2001         2000       Change
                                                   ---------    ---------    ---------
                                                              (in thousands)
<S>                                                <C>          <C>          <C>
Underwriting income (loss)                         $ (93,734)   $   9,561    $(103,295)
Net investment income                                 33,186        9,251       23,935
Interest expense and dividends on
   preferred shares of subsidiaries                   (9,627)        (306)      (9,321)
General and administrative expenses                   (3,718)      (2,417)      (1,301)
Other income                                           1,211           --        1,211
                                                   ---------    ---------    ---------
Pre-tax operating income (loss)                      (72,682)      16,089      (88,771)
Applicable income taxes (benefit)                    (22,870)          --      (22,870)
                                                   ---------    ---------    ---------
Operating income (loss)                              (49,812)      16,089      (65,901)
Minority interest in operating (income) loss of
subsidiary                                                --       (3,418)       3,418
Net realized investment gains (losses), net of
minority interest and income taxes                     1,813           38        1,775
Foreign currency gains (losses), net of minority
interest and income taxes                                (73)         203         (276)
Restructuring costs, net of income taxes              (2,734)          --       (2,734)
                                                   ---------    ---------    ---------
Net income (loss)                                  $ (50,806)   $  12,912    $ (63,718)
                                                   =========    =========    =========
</TABLE>

The  operating  loss of $49.8  million in the three  months  ended June 30, 2001
represented a $65.9  million  decrease  from  operating  income of $16.1 million
recorded in the three months ended June 30, 2000.  This decrease was principally
the  result of  unusual  loss  activity  and  reserve  strengthening,  offset by
increased  investment  income. The increase in investment income in 2001 was the
result  of the  increase  in the  size  of the  investment  portfolio  from  the
Trenwick/LaSalle  business  combination.  The  decrease of $63.7  million in net
income in 2001 when compared to 2000 was the result of the decrease in operating
income,  combined with $2.7 million of after-tax restructuring costs recorded in
conjunction  with  management  changes  effected at Trenwick  Group Ltd's London
operations  in April,  offset in part by the  absence of a minority  interest in
2001 and the increase in realized investment gains.

Underwriting income (loss)

The  underwriting  result for the three months ended June 30, 2000 included only
the  results of LaSalle Re Holdings  Limited;  the  underwriting  result for the
three  months ended June 30, 2001  included  the combined  results of LaSalle Re
Holdings Limited and Trenwick Group Inc.

<TABLE>
<CAPTION>
                                                 2001          2000       Change
                                              ---------     ---------    ---------
                                                          (in thousands)
<S>                                           <C>           <C>          <C>
Net premiums earned                           $ 224,571     $  28,776    $ 195,795
                                              ---------     ---------    ---------
Claims and claims expenses incurred             235,551         9,720      225,831
Acquisition costs and underwriting expenses      82,754         9,495       73,259
                                              ---------     ---------    ---------
Total expenses                                  318,305        19,215      299,090
                                              ---------     ---------    ---------
Net underwriting income (loss)                $ (93,734)    $   9,561    $(103,295)
                                              =========     =========    =========
Loss ratio                                        104.9%         33.8%        71.1%
Underwriting expense ratio                         36.8%         33.0%         3.8%
Combined ratio                                    141.7%         66.8%        74.9%
</TABLE>


                                      -10-
<PAGE>

The  underwriting  loss of $93.7 million in 2001  represented  a $103.3  million
decrease  compared to underwriting  income of $9.6 million in 2000. The increase
in underwriting loss was primarily due to unusual loss activity and loss reserve
strengthening recorded in 2001, which are discussed on page 12 under the caption
"Claims and claims expenses."

The increase in the combined  ratio in 2001  compared to 2000  resulted from the
unusual loss activity and reserve  strengthening  which are discussed on page 12
under the caption  "Claims and claims  expenses,"  together  with a  significant
change in Trenwick Group Ltd.'s mix of business  following the  Trenwick/LaSalle
business  combination.  The increase in the  underwriting  expense  ratio in the
three  months ended June 30, 2001 as compared to the three months ended June 30,
2000 can be  principally  attributed to the  inclusion of Trenwick  Group Inc.'s
casualty business in the underwriting results in 2001.

Premiums written

Gross premiums  written for 2001 were $339.6  million  compared to $32.1 million
for the three months ended June 30, 2000, an increase of $307.5 million or 959%.
Details of gross premiums written are provided below:

<TABLE>
<CAPTION>
                                                      2001      2000      Change
                                                    --------   -------   ---------
                                                            (in thousands)
<S>                                                 <C>        <C>       <C>
Worldwide property catastrophe reinsurance          $ 35,687   $23,642   $  12,045
U.S. treaty reinsurance                               79,467        --      79,467
International specialty insurance and reinsurance     57,695        --      57,695
Lloyd's syndicates:
   Continuing                                         88,226     1,224      87,002
   Runoff                                              3,536     7,214      (3,678)
U.S. specialty program insurance                      74,945        --      74,945
                                                    --------   -------   ---------
Gross premiums written                              $339,556   $32,080   $ 307,476
                                                    ========   =======   =========
</TABLE>

Worldwide property catastrophe  reinsurance gross premium writings for the three
months ended June 30, 2001 increased by $12.0  million,  or 50.9% from the three
months ended June 30, 2000 as a result of increased writings on U.S. catastrophe
business.

The increase in Lloyd's gross written premiums for 2001 compared to 2000 was due
to the addition of Trenwick Group Inc.'s Lloyd's operations managed by Chartwell
Managing  Agents  Limited  from the  Trenwick/LaSalle  business  combination.  A
majority of the Lloyd's  syndicate gross written  premiums in 2001 represent the
bookings of business managed by Chartwell Managing Agents Limited.  The majority
of Lloyd's  business  underwritten  by LaSalle Re Holdings  Limited prior to the
combination with Trenwick Group Inc. was not renewed as of December 31, 2000 and
have been classified as runoff. Additionally, results of operations from Lloyd's
syndicates  which  were  sold by  Trenwick  Group  Inc.  in 1999  have also been
classified as runoff.

U.S. treaty reinsurance,  international  specialty insurance and reinsurance and
U.S.  specialty  program  insurance gross premiums written increased from $0 for
the second  quarter of 2000 to $79.5  million,  $57.7 million and $74.9 million,
respectively,  for the second  quarter  of 2001.  Trenwick  Group  Ltd.  did not
underwrite these businesses prior to the Trenwick/LaSalle business combination.


                                      -11-
<PAGE>

Premiums earned

                                       2001        2000       Change
                                    ---------    --------    ---------
                                              (in thousands)
Gross premiums written              $ 339,556    $ 32,080    $ 307,476
Change in gross unearned premiums     (32,441)      4,807      (37,248)
                                    ---------    --------    ---------
Gross premiums earned                 307,115      36,887      270,228
                                    ---------    --------    ---------
Gross premiums ceded                  (94,679)     (4,704)     (89,975)
Change in ceded unearned premiums      12,135      (3,407)      15,542
                                    ---------    --------    ---------
Ceded premiums earned                 (82,544)     (8,111)     (74,433)
                                    ---------    --------    ---------
Net premiums earned                 $ 224,571    $ 28,776    $(195,795)
                                    =========    ========    =========

Gross premiums ceded for the three months ended June 30, 2001 were $94.7 million
compared  to $4.7  million for the same  period in 2000.  The  increase in gross
premiums  ceded of $90.0  million  was due  primarily  to  cessions  relating to
business  acquired  in the  Trenwick/LaSalle  business  combination.  Businesses
acquired  in  the   Trenwick/LaSalle   business   combination  included  Lloyd's
syndicates, international specialty insurance and reinsurance and U.S. specialty
program  insurance,  all of which  have  significantly  larger  reinsurance  and
retrocessional programs than LaSalle Re Limited.

Net premiums earned for the three months ended June 30, 2001 were $224.6 million
compared to $28.8  million for 2000.  The  increase  in net  premiums  earned is
commensurate with the increase in net premiums written.

Claims and claims expenses

Claims and claims  expenses for the three months ended June 30, 2001 were $235.6
million, an increase of $225.8 million compared to claims and claims expenses of
$9.7  million  for 2000.  The  increase  in claims and claims  expenses  in 2001
resulted from the addition of business acquired in the Trenwick/LaSalle business
combination  as well as unusual loss  activity  and loss reserve  strengthening.
Second  quarter 2001 results  include  unusual  loss  activity of $10.5  million
related to an  accumulation  of  catastrophic  losses  including  Tropical Storm
Allison and storms  affecting the Midwest United States.  In addition,  Trenwick
strengthened  its loss  reserves by $76.7  million.  The  reserve  strengthening
included $17.4 million related to the treaty reinsurance segment's directors and
officer's liability business, which was underwritten prior to 2001. In addition,
$14.8 of the loss reserve  strengthening related to one of the specialty program
insurance  segment's  programs.  Also included in the reserve  strengthening was
$27.4 million relating principally to the Lloyd's segment directors and officers
liability  business.  Lastly, the reserve  strengthening  included $17.1 million
stemming  from  deterioration  in  discontinued  businesses  and  reviews of the
property   insurance  and  small  premium   liability   business  lines  at  the
international specialty insurance and reinsurance segment.

Underwriting expenses

                                2001      2000     Change
                              -------    ------    -------
                                      (in thousands)
Policy acquisition costs      $63,100    $6,132    $56,968
Underwriting expenses          19,654     3,363     16,291
                              -------    ------    -------
Total underwriting expenses   $82,754    $9,495    $73,259
                              =======    ======    =======
Underwriting expense ratio       36.8%     33.0%       3.8%
                              =======    ======    =======


                                      -12-
<PAGE>

Total   underwriting   expenses,   comprising   policy   acquisition  costs  and
underwriting   expenses,  for  2001  increased  by  $73.3  million  compared  to
underwriting   expenses  for  the  three  months  ended  June  30,  2000.  Total
underwriting   expenses  as  a  percentage  of  net  premiums  earned,   or  the
underwriting  expense ratio, were 36.8% for the three months ended June 30, 2001
compared to 33.0% for the same period in 2000.  This  increase  resulted  mainly
from the addition of casualty business acquired in the Trenwick/LaSalle business
combination.  This  business,  which  consisted  of both  treaty  insurance  and
reinsurance,  generally has a higher policy acquisition cost ratio than property
catastrophe business.

Net Investment Income

                                        2001           2000          Change
                                    -----------     ---------     -----------
                                                  (in thousands)
Average invested assets             $ 2,190,057     $ 571,594     $ 1,618,463
Average annualized yields                  6.62%         6.25%           0.37%
                                    -----------     ---------     -----------
Investment income - portfolio            36,240         8,927          27,313

Investment income - non-portfolio           692           630              62
Investment expenses                      (3,746)         (306)         (3,440)
                                    -----------     ---------     -----------
Net investment income               $    33,186     $   9,251     $    23,935
                                    ===========     =========     ===========

Net investment income for the three months ended June 30, 2001 was $33.2 million
compared  to $9.3  million  for the same  period in 2000.  The  increase  in net
investment  income in 2001 was due to the increase in invested assets  resulting
from the  Trenwick/LaSalle  business  combination.  Investment  expense for 2001
includes  interest  expense on funds withheld of $2.7 million under the terms of
stop loss  reinsurance  agreements  purchased  by Trenwick  America  Reinsurance
Corporation prior to 2000. The balance of the increase in investment  expense in
2001 results from the increase in Trenwick  Group Ltd.'s  invested  assets under
management following the Trenwick/LaSalle business combination.

Interest Expense and Dividends on Preferred Stock of Subsidiaries

Interest  expense and  dividends on  preferred  stock of  subsidiaries  was $9.6
million for 2001, an increase of $9.3 million from the same period in 2000.  The
increase  resulted  from the  increase  in debt  outstanding  as a result of the
Trenwick Group Inc. debt assumed by Trenwick Group Ltd.'s  subsidiaries  as well
as the inclusion of dividends on preferred stock of LaSalle Re Holdings  Limited
in 2001, both as a result of the Trenwick/LaSalle business combination.

Non-Operating Income and Expenses

Minority  interest  represents the minority interest in common shares of LaSalle
Re Limited held by third party investors prior to the Trenwick/LaSalle  business
combination  on  September  27,  2000.  Net income  attributed  to the  minority
interest was calculated as 23.2% of net income in the second quarter of 2000.

Net realized  gains on  investments,  net of  applicable  minority  interest and
income  taxes,  were $1.8  million  during the three months ended June 30, 2001,
compared to net realized losses of $1.7 million for the three months ended March
31,  2000.  Both the gains and losses  were made as a result of  security  sales
executed  pursuant to an investment policy designed to protect the total returns
on the portfolio.

Trenwick Group Ltd. recorded foreign currency losses, net of applicable minority
interest and income  taxes,  of $0.1 million for the three months ended June 30,
2001,  relatively  unchanged from foreign currency gains of $0.4 million for the
three months ended June 30, 2000.


                                      -13-
<PAGE>

Results of Operations - Six Months Ended June 30, 2001 and Six Months Ended June
30, 2000

<TABLE>
<CAPTION>
                                                      2001         2000       Change
                                                   ---------    ---------    ---------
                                                              (in thousands)
<S>                                                <C>          <C>          <C>
Underwriting income (loss)                         $(104,482)   $ (15,050)   $ (89,432)
Net investment income                                 65,371       18,187       47,184
Interest expense and dividends on
   preferred stock of subsidiaries                   (20,453)        (611)     (19,842)
General and administrative expenses                   (7,604)      (2,417)      (5,187)
Other income                                           2,052           --        2,052
                                                   ---------    ---------    ---------
Pre-tax operating income (loss)                      (65,116)         109      (65,225)
Applicable income taxes (benefit)                    (27,402)          --      (27,402)
                                                   ---------    ---------    ---------
Operating income (loss)                              (37,714)         109      (37,823)
Minority interest in operating (income) loss of
subsidiary                                                --        1,258       (1,258)
Net realized investment gains (losses), net of
minority interest and income taxes                     9,583       (2,186)      11,769
Foreign currency gains (losses), net of minority
interest and income taxes                             (1,029)         373       (1,402)
Restructuring costs, net of income taxes              (2,734)        (452)      (2,282)
                                                   ---------    ---------    ---------
Net loss                                           $ (31,893)   $    (898)   $ (30,995)
                                                   =========    =========    =========
</TABLE>

The  operating  loss of $37.7  million  in the six months  ended  June 30,  2001
represented a $37.6 million  decrease from the operating  income of $0.1 million
recorded in the six months ended June 30, 2000.  This  decrease was  principally
the result of unusual  loss  activity and loss  reserve  strengthening  recorded
during the first half of 2001,  partially offset by increased investment income.
The increase in investment  income in 2001 was the result of the increase in the
size of the investment portfolio from the Trenwick/LaSalle business combination.
The  decrease of $31.0  million in net income in 2001 when  compared to 2000 was
the  result of the  decrease  in  operating  income and an  increase  in foreign
exchange losses, which are discussed on page 18 under the caption "Non-Operating
Income and  Expenses,"  offset in part by the absence of a minority  interest in
2001,  and the  increase in realized  investment  gains.  Net income for the six
months ended June 30, 2001 was also reduced by after tax restructuring  costs of
$2.7 million.

Underwriting income (loss)

The underwriting result for the six months ended June 30, 2000 included only the
results of LaSalle Re  Holdings  Limited;  the  underwriting  result for the six
months ended June 30, 2001 included the combined  results of LaSalle Re Holdings
Limited and Trenwick Group Inc.


                                      -14-
<PAGE>

<TABLE>
<CAPTION>
                                                 2001          2000        Change
                                              ---------     ---------     ---------
                                                          (in thousands)
<S>                                           <C>           <C>           <C>
Net premiums earned                           $ 427,346     $  55,988     $ 371,358
                                              ---------     ---------     ---------
Claims and claims expenses incurred             373,832        53,266       320,566
Acquisition costs and underwriting expenses     157,996        17,772       140,224
                                              ---------     ---------     ---------
Total expenses                                  531,828        71,038       460,790
                                              ---------     ---------     ---------
Net underwriting (loss)                       $(104,482)    $ (15,050)    $ (89,432)
                                              =========     =========     =========
Loss ratio                                         87.5%         95.1%         (7.6)%
Underwriting expense ratio                         37.0%         31.7%          5.3%
Combined ratio                                    124.5%        126.8%         (2.3)%
</TABLE>

The  underwriting  loss of $104.5  million in 2001  represented  a $89.4 million
increase  compared  to the  underwriting  loss of $15.1  million  in  2000.  The
increase in  underwriting  loss was primarily due to 14.4 million in catastrophe
losses  recorded  in the  first  half  of  2001 as  well  as  $76.7  of  reserve
strengthening.  During the first  half of 2000,  underwriting  results  included
additions to loss reserves of $23.0 million relating to the December 1999 winter
storms which hit France and Denmark.

The decrease in the combined ratio in 2001 compared to 2000 also resulted from a
significant  change in  Trenwick  Group  Ltd.'s mix of  business  following  the
Trenwick/LaSalle  business combination.  Both the decrease in the loss ratio and
the increase in the underwriting  expense ratio in the six months ended June 30,
2001 as  compared  to the six  months  ended  June 30,  2000  resulted  from the
inclusion of Trenwick Group Inc.'s casualty business in the underwriting results
in 2001.

Premiums written

Gross premiums  written for 2001 were $693.2  million  compared to $97.2 million
for the six months ended June 30, 2000,  an increase of $595.9  million or 613%.
Details of gross premiums written are provided below:

<TABLE>
<CAPTION>
                                                      2001       2000     Change
                                                   ---------  ---------  ---------
                                                             (in thousands)
<S>                                                <C>        <C>        <C>
Worldwide property catastrophe reinsurance         $  94,634  $  82,036  $  12,598
U.S. treaty reinsurance                              162,098         --    162,098
International specialty insurance and reinsurance    119,911         --    119,911
Lloyd's syndicates:
   Continuing                                        172,383      3,183    169,200
   Runoff                                                651     12,027    (11,376)
U.S. specialty program insurance                     143,502         --    143,502
                                                   ---------  ---------  ---------
Gross premiums written                             $ 693,179  $  97,246  $ 595,933
                                                   =========  =========  =========
</TABLE>

Worldwide  property  catastrophe  reinsurance gross premium writings for the six
months ended June 30, 2001  increased by $12.6 million over the six months ended
June 30, 2000 due to an increase in rates on renewal  business  combined with an
increase in new writings, principally in the United States.

The increase in Lloyd's gross written premiums for 2001 compared to 2000 was due
to the addition of Trenwick Group Inc.'s Lloyd's operations managed by Chartwell
Managing  Agents  Limited  from the  Trenwick/LaSalle  business  combination.  A
majority of the Lloyd's  syndicate gross written  premiums in 2001 represent the
bookings of business managed by Chartwell Managing Agents Limited.  The majority
of Lloyd's  business  underwritten  by LaSalle Re Holdings  Limited prior to the
combination with Trenwick Group Inc. was not renewed as of December 31, 2000 and
have been classified as runoff. Additionally, results of operations from Lloyd's
syndicates  which  were  sold by  Trenwick  Group  Inc.  in 1999  have also been
classified as runoff.


                                      -15-
<PAGE>

U.S. treaty reinsurance,  international  specialty insurance and reinsurance and
U.S.  specialty  program  insurance gross premiums written increased from $0 for
the first half of 2000 to $162.1  million,  $119.9  million and $143.5  million,
respectively, for the first half of 2001. Trenwick Group Ltd. did not underwrite
these businesses prior to the Trenwick/LaSalle business combination.

Premiums earned

                                       2001         2000       Change
                                    ---------    ---------    ---------
                                               (in thousands)
Gross premiums written              $ 693,179    $  97,246    $ 595,933
Change in gross unearned premiums    (111,022)     (25,898)     (85,124)
                                    ---------    ---------    ---------
Gross premiums earned                 582,157       71,348      510,809
                                    ---------    ---------    ---------
Gross premiums ceded                 (187,564)     (21,387)    (166,177)
Change in ceded unearned premiums      32,753        6,027       26,726
                                    ---------    ---------    ---------
Ceded premiums earned                (154,811)     (15,360)    (139,451)
                                    ---------    ---------    ---------
Net premiums earned                 $ 427,346    $  55,988    $ 371,358
                                    =========    =========    =========

Gross  premiums ceded for the six months ended June 30, 2001 were $187.6 million
compared to $21.4  million for the same  period in 2000.  The  increase in gross
premiums  ceded of $166.2  million was due  primarily  to  cessions  relating to
business  acquired  in the  Trenwick/LaSalle  business  combination.  Businesses
acquired  in  the   Trenwick/LaSalle   business   combination  included  Lloyd's
syndicates, international specialty insurance and reinsurance and U.S. specialty
program  insurance,  all of which  have  significantly  larger  reinsurance  and
retrocessional programs than LaSalle Re Limited.

Net premiums  earned for the six months ended June 30, 2001 were $427.3  million
compared to $56.0  million for 2000.  The  increase  in net  premiums  earned is
commensurate with the increase in net premiums written.

Claims and claims expenses

Claims and claims  expenses  for the six months  ended June 30, 2001 were $373.8
million, an increase of $320.6 million compared to claims and claims expenses of
$53.3  million  for 2000.  The  increase  in claims and claims  expenses in 2001
resulted from the addition of business acquired in the Trenwick/LaSalle business
combination as well as to unusual loss activity and loss reserve  strengthening.
During the first half of 2001, claims and claims expenses included $14.4 million
of unusual loss activity,  including $10.5 million related to an accumulation of
catastrophic  losses  including  Tropical Storm Allison and storms affecting the
Midwest United States and $3.9 million  relating to the sinking of the Petrobras
oil rig.  Trenwick also recorded $76.7 million of reserve  strengthening,  which
included $17.4 million related to the treaty reinsurance segment's directors and
officer's liability business, which was underwritten prior to 2001. In addition,
$14.8 of the loss reserve  strengthening related to one of the specialty program
insurance  segment's  programs.  Also included in the reserve  strengthening was
$27.4 million relating principally to the Lloyd's segment directors and officers
liability  business.  Lastly, the reserve  strengthening  included $17.1 million
stemming  from  deterioration  in  discontinued  businesses  and  reviews of the
property   insurance  and  small  premium   liability   business  lines  at  the
international specialty insurance and reinsurance segment.


                                      -16-
<PAGE>

Underwriting expenses

                                2001        2000      Change
                              --------    --------    --------
                                       (in thousands)
Policy acquisition costs      $122,456    $ 10,642    $111,814
Underwriting expenses           35,540       7,130      28,410
                              --------    --------    --------
Total underwriting expenses   $157,996    $ 17,772    $140,224
                              ========    ========    ========
Underwriting expense ratio        37.0%       31.7%        5.3%
                              ========    ========    ========

Total   underwriting   expenses,   comprising   policy   acquisition  costs  and
underwriting  expenses,  for  2001  increased  by  $140.2  million  compared  to
underwriting expenses for the six months ended June 30, 2000. Total underwriting
expenses as a percentage of net premiums  earned,  or the  underwriting  expense
ratio,  were 37.0% for the six months ended June 30, 2001  compared to 31.7% for
the same period in 2000. The increase in the underwriting expense ratio occurred
principally  because of an  increase  in policy  acquisition  costs  relating to
casualty business acquired in the Trenwick/LaSalle  business  combination.  This
business,  which consisted of both treaty insurance and  reinsurance,  generally
has a higher policy acquisition cost ratio than property catastrophe business.

Net Investment Income

                                       2001            2000          Change
                                   -----------     -----------     -----------
(in thousands)
Average invested assets            $ 2,205,830     $   563,670     $ 1,642,160
Average annualized yields                 6.52%           6.19%           0.33%
                                   -----------     -----------     -----------
Investment income - portfolio           71,928          17,445          54,483

Investment income - non-portfolio        3,577           1,192           2,385
Investment expenses                     (7,771)           (450)         (7,321)
                                   -----------     -----------     -----------
Net investment income              $    65,371     $    18,187     $    47,184
                                   ===========     ===========     ===========

Net  investment  income for the six months ended June 30, 2001 was $65.4 million
compared  to $18.2  million  for the same  period in 2000.  The  increase in net
investment  income in 2001 was due to the increase in invested assets  resulting
from the  Trenwick/LaSalle  business  combination.  Investment  expense for 2001
includes  interest  expense on funds withheld of $5.6 million under the terms of
stop loss  reinsurance  agreements  purchased  by Trenwick  America  Reinsurance
Corporation prior to 2000. The balance of the increase in investment  expense in
2001 results from the increase in Trenwick  Group Ltd.'s  invested  assets under
management following the Trenwick/LaSalle business combination.

Interest Expense and Dividends on Preferred Stock of Subsidiaries

Interest  expense and  dividends on preferred  stock of  subsidiaries  was $20.5
million for 2001, an increase of $19.8 million from the same period in 2000. The
increase  resulted  from the  increase  in debt  outstanding  as a result of the
Trenwick Group Inc. debt assumed by Trenwick Group Ltd.'s  subsidiaries  as well
as the inclusion of dividends on preferred stock of LaSalle Re Holdings  Limited
in 2001, both as a result of the Trenwick/LaSalle business combination.

Non-Operating Income and Expenses

Minority  interest  represents the minority interest in common shares of LaSalle
Re Limited held by third party investors prior to the Trenwick/LaSalle  business
combination  on  September  27,  2000.  Net income  attributed  to the  minority
interest was calculated as 23.2% of net income in the first half of 2000.


                                      -17-
<PAGE>



Net realized  gains on  investments,  net of  applicable  minority  interest and
income  taxes,  were $9.6  million  during the six months  ended June 30,  2001,
compared to net  realized  losses of $2.2  million for the six months ended June
30,  2000.  Both the gains and losses  were made as a result of  security  sales
executed  pursuant to an investment policy designed to protect the total returns
on the portfolio.

Trenwick Group Ltd. recorded foreign currency losses, net of applicable minority
interest  and income  taxes,  of $1.0  million for the six months ended June 30,
2001,  compared  to foreign  currency  gains of $0.4  million for the six months
ended June 30, 2000 due to the decline in the value of  European  currencies  in
the latter portion of 2000, principally the British pound sterling,  against the
US dollar.

Liquidity and Capital Resources

As of June 30, 2001,  Trenwick Group Ltd.'s  consolidated  investments  and cash
totaled $2.2 billion,  unchanged from the balance at December 31, 2000. The cost
of Trenwick Group Ltd.'s equity securities was $9.6 million less than fair value
at June 30, 2001 and  exceeded  fair value by $2.1 million at December 31, 2000.
The fair value of Trenwick Group Ltd.'s debt securities  exceeded amortized cost
by $19.1 million at June 30, 2001 and by $27.0 million at December 31, 2000.

As of June 30,  2001,  Trenwick  Group Ltd.  consolidated  common  shareholders'
equity totaled $613.9  million,  or $16.65 per common share,  compared to $652.2
million,  or $17.79 per common share at December 31, 2000. During the six months
ended June 30, 2001, the unrealized  appreciation of debt and equity  securities
increased by $1.3 million, net of tax, or $0.04 per share.

Cash used in Trenwick Group Ltd.'s operating activities for the six months ended
June 30, 2001 was $15.4 million  compared to cash used in Trenwick  Group Ltd.'s
operating  activities  of $3.0  million in the  comparable  period of 2000.  The
reduction in cash flow from operations was due primarily to an overall  increase
in claims and claims  expenses  paid as a result of an increase  in  catastrophe
losses in the past few years.

Net cash used in financing activities during the six months ended March 31, 2001
included $2.9 million of dividends paid to common  shareholders.  During the six
months ended June 30, 2000, net cash used in financing  activities included $3.3
million of dividends to preferred shareholders.

Trenwick  Group Ltd.  paid a dividend  of $0.04 per common  share in each of the
first two  quarters  of 2001 and LaSalle Re  Holdings  Limited  paid a quarterly
dividend  of $.55 per  share on the  Series A  preferred  shares of  LaSalle  Re
Holdings  Limited  in each of the first two  quarters  of 2001 and the first two
quarters of 2000.  Trenwick  Group Ltd.'s Board of  Directors  reviews  Trenwick
Group Ltd.'s common share dividend each quarter. Among the factors considered by
the Board of Directors in  determining  the amount of each dividend are Trenwick
Group Ltd.'s  results of  operations  and the capital  requirements,  growth and
other characteristics of its businesses.

Trenwick  Group Ltd.'s total debt to capital  ratio  (total debt  excluding  the
preferred  capital   securities   divided  by  total  debt,   preferred  capital
securities, preferred shares and common shareholders' equity) increased to 28.3%
at June 30, 2001 from 26.3% on December 31, 2000.


                                      -18-
<PAGE>

Quantitative and Qualitative Disclosure About Market Risk

Trenwick  Group Ltd.  reviewed  the change in its exposure to market risks since
December 31, 2000. In addition,  the components of its  investment  holdings and
its  risk  management  strategy  and  objectives  have not  materially  changed.
Therefore,  Trenwick  Group Ltd.  believes  that the  potential for loss in each
market risk  sector  described  in the 2000  Annual  Report on Form 10-K has not
materially changed.

Accounting Standards

In July  2001,  the  Financial  Accounting  Standards  Board  issued  statements
covering business  combinations and goodwill and other intangible assets,  which
are required to be adopted at the  beginning of 2002.  The business  combination
statement  requires  that the  purchase  method  of  accounting  be used for all
business  combinations  initiated  after June 30,  2001.  The goodwill and other
intangible  assets  statement  changes  the  accounting  for  goodwill  from  an
amortization  method to an impairment-only  approach.  Amortization of goodwill,
including  goodwill  recorded  in past  business  combinations,  will cease upon
adoption of this statement.  The Company has not determined the effect,  if any,
that this statement will have on its consolidated  financial position or results
of operations.

Safe Harbor Disclosure

In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995,  Trenwick Group Ltd. 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  Group  Ltd.  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  Group Ltd.  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.

Forward-looking  statements  involve known and unknown risks and  uncertainties,
which may cause  Trenwick Group Ltd.'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 Group Ltd.'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  Group  Ltd.  to execute  its  strategies  in its
     property/casualty operations;

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


                                      -19-
<PAGE>

-    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   Group   Ltd.'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 Group Ltd.'s retrocessionaires or reinsurers;

-    Increases  in interest  rates,  which may cause a  reduction  in the market
     value of Trenwick  Group  Ltd.'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 Group Ltd.'s equity investments;

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

-    Credit losses on Trenwick Group Ltd.'s investment portfolio;

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

-    The passage of federal or state legislation  subjecting  LaSalle Re Limited
     to United States taxation or regulation;

-    A contention by the United States Internal  Revenue Service that LaSalle Re
     Limited is subject to United States taxation;

-    The impact of mergers and acquisitions;

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

-    Changes in Trenwick Group Ltd.'s capital needs.

In addition to the factors  outlined above that are directly related to Trenwick
Group Ltd.'s businesses, Trenwick Group Ltd. 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 on Form 10-Q. The
important factors that could affect such forward-looking  statements are subject
to change, and Trenwick Group Ltd. does not intend to update any forward-looking
statement or the foregoing list of important  factors.  By this  cautionary note
Trenwick  Group Ltd.  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.


                                      -20-
<PAGE>

                           PART II - OTHER INFORMATION

Item 1 Legal Proceedings

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

Item 2. Changes in Securities and Use of Proceeds

     None

Item 3. Defaults Upon Senior Securities

     None

Item 4. Submission of Matters to a Vote of Security Holders

     The annual general meeting of shareholders  was held in Hamilton,  Bermuda,
on May 11, 2001. Represented in person or by proxy at the annual general meeting
were 31,187,093 common shares, which was 84.7% of outstanding common shares.

The following  four directors were elected to a three year term expiring in 2004
by the following votes of Trenwick Group Ltd.'s common shareholders.

                                Number of Shares
                                ----------------

                                       For                          Withheld
                                       ---                          --------
Frank E. Grzelecki                  29,079,986                     2,107,107
Peter J. Rackley                    29,079,986                     2,107,107
Frederick D. Watkins                29,079,886                     2,107,207
Stephen R. Wilcox                   29,080,047                     2,107,046

The  appointment  of   PricewaterhouseCoopers   LLP  as  Trenwick  Group  Ltd.'s
independent  accountants was ratified by the following vote of Trenwick's common
shareholders:

                                Number of Shares
                                ----------------

           For                       Against                        Abstain
           ---                       -------                        -------
        31,101,158                    68,830                         17,105

The Trenwick Group Ltd. Non-Employee Director Equity Incentive Plan was approved
by the following vote of Trenwick Group Ltd.'s common shareholders.


                                      -21-
<PAGE>

                                Number of Shares
                                ----------------

         For                         Against                        Abstain
         ---                         -------                        -------
      27,254,124                    3,008,686                       924,283

The  Trenwick  Group Ltd.  Employee  Share  Purchase  Plan was  approved  by the
following vote of Trenwick Group Ltd.'s common shareholders.

                                 Number of Shares
                                 ----------------

         For                         Against                        Abstain
         ---                         -------                        -------
      30,055,871                     216,816                        914,406

Item 5. Other Information

     None

Item 6. Exhibits and reports on Form 8-K

     (a)  Exhibits

     10.1 Employment  Agreement,  dated May 11,  2001,  by and between  Trenwick
          Group Ltd. and James F. Billett, Jr. *

          *Management contract or compensatory plan or arrangement.

     (b)  Reports on Form 8-K

The  following  report on Form 8-K was filed  during the quarter  ended June 30,
2001:

     Date of Report                             Item Reported
     --------------                             -------------

     July 24, 2001              Press release, dated July 24, 2001, announcing
                                second quarter earnings charges.


                                      -22-
<PAGE>

                                   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.

                                    TRENWICK GROUP LTD.

Date: August 14, 2001               By:     /s/  James F. Billett, Jr.
                                            --------------------------
                                            Name:  James F. Billett, Jr.
                                            Title: Chairman, President and
                                                   Chief Executive Officer

Date:  August 14, 2001              By:     /s/ Coleman D. Ross
                                            -------------------
                                            Name:  Coleman D. Ross
                                            Title: Executive Vice President and
                                                   Chief Financial Officer


                                      -23-