<PAGE>
 
===============================================================================



               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 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, 1997
                                                -------------

                                      OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                        Commission File Number 1-12823
                                               -------



                          LaSalle Re Holdings Limited
            (Exact name of registrant as specified in its charter)



                     Bermuda                   Not applicable
       --------------------------------    ----------------------
        (State or other jurisdiction of        (IRS Employer
       incorporation or organization)      Identification Number)
 

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


                                 441-292-3339
                                 ------------
             (Registrant's Telephone number, including area code)


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] Not applicable[_]


The number of the Registrant's Common Shares (par value $1.00 per share)
outstanding as of August 4, 1997 was 15,073,915.

===============================================================================
<PAGE>
 

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

                          LaSalle Re Holdings Limited
                              INDEX TO FORM 10-Q

                        PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
ITEM 1.    Unaudited Consolidated Financial Statements

           Consolidated Balance Sheets
           June 30, 1997 and September 30, 1996...........................   3  
           
           Consolidated Statements of Operations
           Three Months and Nine Months ended June 30, 1997 and 1996......   4
 
           Consolidated Statements of Changes in Shareholders' Equity
           Three Months and Nine Months ended June 30, 1997 and 1996......   5
 
           Consolidated Statements of Cash Flows
           Nine Months ended June 30, 1997 and 1996.......................   6
 
           Notes to Unaudited Consolidated Financial Statements...........  7-9
 
ITEM 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations.................. 10-20

 
                          PART II - OTHER INFORMATION

ITEM 1.    Legal Proceedings..............................................   21
                                                                             
ITEM 2.    Changes in Securities..........................................   21
                                                                             
ITEM 3.    Defaults upon Senior Securities ...............................   21
                                                                             
ITEM 4.    Submission of Matters to a Vote of Security Holders ...........   21
                                                                             
ITEM 5.    Other information..............................................   21
 
ITEM 6.    Exhibits and Reports on Form 8-K............................... 21-22

Signatures    ............................................................   23
 
Exhibit 11.1  ............................................................   24
</TABLE>


================================================================================
<PAGE>
<TABLE>
<CAPTION>
 
                          LaSalle Re Holdings Limited
 
                          Consolidated Balance Sheets
 (Expressed in thousands of United States Dollars, except share and per share
                                     data)
                                   Unaudited
 
===============================================================================
 
                                             June 30, 1997   September 30, 1996
Assets
 
<S>                                          <C>             <C>
Cash and cash equivalents                         $ 67,367             $ 46,990
Investments held as available for sale at
 fair value                                        476,073              490,514
 (amortized cost $477,539 : $493,450)
Accrued investment income                           12,711               14,211                             
Reinsurance balances receivable                    103,847               70,625
Deferred acquisition costs                          12,650               10,464
Prepaid reinsurance premiums                         7,654                    0
Other assets                                        21,195                1,570
                                                  --------             --------
Total assets                                      $701,497             $634,374
                                                  ========             ========

Reserve for losses and loss expenses              $ 42,672             $ 49,875
Unearned premium reserve                            95,723               82,894                             
Other liabilities                                   38,929               11,087
Dividend payable                                    10,702                3,600
                                                  --------             -------- 
Total liabilities                                  188,026              147,456
                                                  --------             --------
Minority interest                                   92,798              179,470
                                                  --------             --------
Shareholders' equity                                                         
Share capital authorised in the aggregate 
 100,000,000 shares, par value $1        
Preferred shares                                                               
 (issued & outstanding, 3,000,000, series A                                   
  preferred shares par value $1,                                               
  liquidation preference $25 per share)              3,000                    0
Common shares                                                                  
 (issued & outstanding, 15,073,452 par              
  value $1)                                         15,073               14,398
Additional paid in capital                         301,816              221,968
Unrealized loss on investments                      (1,105)              (1,861)
Retained earnings                                  101,889               72,943
                                                  --------             --------
Total shareholders' equity                         420,673              307,448
                                                  --------             --------
Total liabilities, minority interest and                                       
shareholders' equity                              $701,497             $634,374
                                                  ========             ========
</TABLE>

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

                                       3
<PAGE>
 
                          LaSalle Re Holdings Limited

                     Consolidated Statements of Operations
 (Expressed in thousands of United States Dollars, except share and per share
                                     data)
                                   Unaudited
<TABLE> 
<CAPTION>

============================================================================================================
                                                     Three Months Ended              Nine Months Ended
                                                June 30, 1997  June 30, 1996   June 30, 1997   June 30, 1996
<S>                                             <C>             <C>            <C>             <C>
Revenues

Gross premiums written                            $    29,454    $    26,696     $   144,087     $   171,887
Premiums ceded                                          1,665              0          (8,486)              0
                                                  -----------    -----------     -----------     -----------
Net premiums written                                   31,119         26,696         135,601         171,887
Change in unearned premiums                            14,784         28,598          (5,175)        (13,501)
                                                  -----------    -----------     -----------     -----------
Net premiums earned                                    45,903         55,294         130,426         158,386

Net investment income                                   8,468          6,743          24,759          19,331
Net realized(losses) gains on investments                (564)            46            (141)             61
Other income                                              125              0             125               0
                                                  -----------    -----------     -----------     -----------
Total revenues                                         53,932         62,083         155,169         177,778
                                                  -----------    -----------     -----------     -----------                      
Expenses

Losses and loss expenses incurred                       4,475          9,954          22,198          44,189
Underwriting expenses                                   8,018          7,744          20,917          21,450
Operational expenses                                    3,049          2,923           8,974           8,091
Corporate expenses                                        256              0           1,624             911
Interest expenses                                         537             56           1,140             164
Exchange (gain) loss                                      (88)           589           1,886           1,422
                                                  -----------    -----------     -----------     -----------      
Total expenses                                         16,247         21,266          56,739          76,227
                                                  -----------    -----------     -----------     -----------

Income before minority interest                        37,685         40,817          98,430         101,551
Minority interest                                       7,729         15,024          19,999          37,685
                                                  -----------    -----------     -----------     -----------      
Net income                                        $    29,956    $    25,793     $    78,431     $    63,866
                                                  ===========    ===========     ===========     ===========
Net income per common share                       $      1.63    $      1.70     $      4.10     $      4.25
                                                  ===========    ===========     ===========     ===========
Weighted average number of common shares
and common share equivalents outstanding           22,169,529     23,967,950      23,569,729      23,897,590
                                                  ===========    ===========     ===========     ===========
============================================================================================================
</TABLE>



                                       4
<PAGE>
 
                          LaSalle Re Holdings Limited
 
          Consolidated Statements of Changes in Shareholders' Equity
              (Expressed in thousands of United States Dollars, 
                       except share and per share data)
                                   Unaudited

<TABLE> 
<CAPTION>
=============================================================================================================
                                                          Three Months Ended           Nine Months Ended
                                                      June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<S>                                                      <C>           <C>            <C>         <C>
Preferred shares par value $1
Balance at beginning of period                             $  3,000      $      0     $      0       $      0
Issue of shares                                                   0             0        3,000              0
                                                           --------      --------     --------       --------
Balance at end of period                                   $  3,000      $      0     $  3,000       $      0
                                                           ========      ========     ========       ========

Common shares par value $1
Balance at beginning of period                             $ 16,517      $ 14,398     $ 14,398       $ 14,398
Conversion of exchangeable non-voting shares                  2,260             0        4,379              0
Share repurchase                                             (3,704)            0       (3,704)             0
                                                           --------      --------     --------       --------
Balance at end of period                                   $ 15,073      $ 14,398     $ 15,073       $ 14,398
                                                           ========      ========     ========       ========
Additional paid in capital
Balance at beginning of period                             $324,938      $221,968     $221,968       $221,968
Conversion of exchangeable non-voting shares                 21,436             0       54,106              0
Adjustments relating to the share repurchase                (44,571)            0      (44,571)             0
Issue of shares-employee stock purchase plan                     13             0           30              0
Issue of preferred shares, net of underwriting discount           0             0       70,283              0
                                                           --------      --------     --------       --------
Balance at end of period                                   $301,816      $221,968     $301,816       $221,968
                                                           ========      ========     ========       ========
Unrealized loss on investments
Balance at beginning of period                             $ (4,390)     $  3,564     $ (1,861)      $ (1,039)
Unrealized gain/(loss) in period                              3,657        (6,398)       1,403         (1,795)
Conversion of exchangeable non-voting shares                   (372)            0         (647)             0
                                                           --------      --------     --------       --------
Balance at end of period                                   $ (1,105)     $ (2,834)    $ (1,105)      $ (2,834)
                                                           ========      ========     ========       ========
Retained earnings
Balance at beginning of period                             $105,540      $ 36,730     $ 72,943       $ 18,095
Net Income                                                   29,956        25,793       78,431         63,866
Common share dividends                                      (10,702)       (3,600)     (34,156)       (23,038)
Preferred share dividends                                    (1,166)            0       (1,166)             0
Conversion of exchangeable non-voting shares                  8,945             0       20,091              0
Adjustments relating to the share repurchase                (30,684)            0      (34,254)             0
                                                           --------      --------     --------       --------
Balance at end of period                                   $101,889      $ 58,923     $101,889       $ 58,923
                                                           ========      ========     ========       ========

Total shareholders' equity                                 $420,673      $292,455     $420,673       $292,455
                                                           ========      ========     ========       ========

=============================================================================================================
</TABLE>

                                       5
<PAGE>
 

                          LaSalle Re Holdings Limited
 
                     Consolidated Statements of Cash Flows
               (Expressed in thousands of United States Dollars)
                                   Unaudited

================================================================================
<TABLE> 
<CAPTION> 
                                                         Nine Months Ended
Cash flows from operating activities               June 30, 1997  June 30, 1996
<S>                                                <C>            <C>
 
Net income                                             $  78,184      $  63,866
 
Adjustments to reconcile net income to
cash provided by operating activities:
  Minority interest in net income                         20,246         37,685
  Amortization of investment premium                         940          3,095
  Net gain on sale of investments                            141            (61)
  Unrealized loss on foreign exchange                        465            919
Changes in:                                            
  Reinsurance balances receivable                        (33,690)       (26,654)
  Deferred acquisition costs                              (2,186)        (2,160)
  Prepaid reinsurance premiums                            (7,654)             0
  Accrued investment income                                1,500          1,471
  Other assets                                           (19,625)          (356)
  Reserve for losses and loss expenses                    (7,200)       (12,494)
  Unearned premium                                        12,829         13,500
  Other liabilities                                       27,053          6,433

                                                       ---------      ---------
Cash provided by operating activities                     71,003         85,244
                                                       ---------      --------- 
Cash flows from investing activities
 
Purchase of investments                                 (250,706)      (188,363)
Net purchases of short term investments                   (6,813)        (3,451)
Proceeds on the sale of marketable securities            201,415        126,081
Proceeds on the maturity of marketable securities         71,000         30,500

                                                       ---------      ---------
 
Cash provided by (applied to) investing activities        14,896        (35,233)
                                                       ---------      ---------
 
Cash flows from financing activities
 
Issue of shares                                           72,668              0 
Dividends paid                                           (39,122)      (105,682)
Share repurchase                                         (99,068)             0

                                                       ---------      ---------
 
Cash applied to financing activities                     (65,522)      (105,682)
                                                       ---------      ---------
 
 
Net increase (decrease) in cash and cash equivalents      20,377        (55,671)

Cash and cash equivalents at beginning of period          46,990         82,360

                                                       ---------      ---------

Cash and cash equivalents at end of period             $  67,367      $  26,689
                                                       =========      =========
</TABLE>

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

                                       6
<PAGE>
 

                          LaSalle Re Holdings Limited

           Notes to the Unaudited Consolidated Financial Statements
===============================================================================

1. General

The accompanying unaudited interim consolidated financial statements have been
prepared pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly, certain information and footnotes required by generally accepted
accounting principles for complete financial statements are not included herein.
The interim financial statements should be read in conjunction with the LaSalle
Re Holdings Limited Annual Report dated September 30, 1996.

Unless the context otherwise requires, references herein to the "Company"
include LaSalle Re Holdings Limited and its subsidiary, LaSalle Re Limited
("LaSalle Re"), and its subsidiaries LaSalle Re Corporate Capital Ltd. ("LaSalle
Re Capital") and LaSalle Re (Services) Limited.

Interim statements are subject to possible adjustments in connection with the
annual audit of the Company's accounts for the full year; in the Company's
opinion, all adjustments necessary for a fair presentation of these interim
statements have been included and are of a normal and recurring nature.

During the quarter ended December 31, 1996, the Company completed a secondary
offering (the "Secondary Offering") of its common shares, par value $1 per share
(the "Common Shares"). In connection with the Secondary Offering, certain
founding shareholders of LaSalle Re (the "Founding Shareholders") exchanged
2,119,110 of their exchangeable non-voting shares of LaSalle Re ("Exchangeable
Non-Voting Shares") for Common Shares of the Company. As a result of this
exchange, the Company increased its ownership of the outstanding capital stock
of LaSalle Re from 63% to 73%. The Company has continually owned 100% of the
outstanding voting stock of LaSalle Re. This exchange has been accounted for at
historic cost as the transaction is akin to the conversion of equity securities
with the share exchange initiated by the shareholders of the Exchangeable Non-
Voting Shares pursuant to an existing contractual agreement between the
shareholders of LaSalle Re and the Company.

In March 1997, the Company completed an offering of 3,000,000 Series A Preferred
Shares (the "Preferred Offering"). The Series A Preferred Shares, par value
$1.00 per share, carry a liquidation preference of $25.00 per share, plus
accrued and unpaid dividends, if any, to the date of liquidation. Dividends on
the Series A Preferred Shares are cumulative from the date of original issuance
and are payable quarterly on the first day of March, June, September and
December each year in an amount per share equal to 8.75% of the liquidation
preference per annum (equivalent to $2.1875 per share). Net proceeds from the
offering after underwriting discounts and commissions were $72.6 million.

On March 28, 1997, the Company commenced the $100 million tender offer (the
("Tender Offer") whereby it offered to purchase for cancellation up to 3,703,703
of its Common Shares at a price no greater than $30.00 nor less than $27.00 per
share. The Tender Offer expired on April 25, 1997, with 5,508,314 Common Shares
and Common Share equivalents tendered at a tender price of $27.00. The Tender
Offer was funded in part by the net proceeds of the Preferred Offering with the
remaining funding from excess capital. On May 6, 1997, the Company purchased
3,703,703 Common Shares, for cancellation, at the tender price of $27.00. The
Company has deducted from share capital the par value of the shares canceled.
The original additional paid in capital has been eliminated from additional paid
in capital and the difference between the price received for the shares
originally and the price paid in the tender offer has been deducted from
retained reserves.

The Tender Offer was made to all holders of Common Shares and Common Share
equivalents, which included options to purchase Common Shares, Exchangeable Non-
Voting Shares and options to purchase Exchangeable Non-Voting Shares. Pursuant
to the Tender Offer, 2,163,538

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

                                       7
<PAGE>
 
                          LaSalle Re Holdings Limited

           Notes to the Unaudited Consolidated Financial Statements
===============================================================================

Exchangeable Non-Voting Shares were exchanged for Common Shares of the Company
and 95,679 options for Exchangeable Non-Voting Shares were exercised and
exchanged for Common Shares of the Company. As a result of these exchanges, the
Company has increased its ownership of the outstanding capital stock of LaSalle
Re from 73% to 79%. These exchanges have been accounted for in the same manner
as the exchange that occurred with respect to the Secondary Offering as
described above.

The consolidated financial statements include the results of the Company and the
Company's share of LaSalle Re and its subsidiaries for all periods presented.

2.   Significant Accounting Policies

Reinsurance

In the normal course of business, the Company seeks to reduce the losses that
may arise from catastrophes and cause unfavorable underwriting results by
reinsuring certain levels of risks with other reinsurers.

In accordance with SFAS No 113 "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts", contracts providing indemnification
against loss or liability relating to insurance risk have been accounted for as
reinsurance. Reinsurance premiums are reported as prepaid reinsurance premiums
and amortized over the contract period in proportion to the amount of
reinsurance protection provided. Contracts which do not provide a reasonable
possibility that the reinsurer may realize a significant loss from the insurance
risk assumed have been accounted for as deposits which are included as part of
other assets.

The ceding of the reinsurance does not legally discharge the Company from its
liability, since the Company is required to pay losses and bear collection risk
if the reinsurers fail to meet their obligations under the reinsurance
agreements.

Other Income

Other income relates to fees earned in respect of reinsurance services provided.

3.   Reinsurance

The effect of reinsurance on premiums written and earned is as follows:
<TABLE>
<CAPTION>
               Three months ended June 30,  Nine months ended June 30,
                          1997                         1997
<S>                <C>          <C>           <C>          <C>
                   Written      Earned        Written      Earned

Assumed            29,454       46,382        144,087     131,259

Ceded              (1,665)         479          8,486         833
                   ------       ------        -------     -------

Net Premiums       31,119       45,903        135,601     130,426
                   ------       ------        -------     -------
</TABLE>
There were no ceded premiums for the three months ended June 30, 1996 or the
nine months ended June 30, 1996.

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

                                       8
<PAGE>
 
                          LaSalle Re Holdings Limited

           Notes to the Unaudited Consolidated Financial Statements
================================================================================

4. Series A Preferred Shares

In March 1997, the Company issued 3,000,000 Series A Preferred Shares par value
$1.00 per share. These shares are entitled to a liquidation preference of $25.00
per share. Dividends are cumulative at 8.75% of the liquidation preference per
annum (equivalent to an annual rate of $2.1875 per share). On or after March 27,
2007 these shares will be redeemable, in whole or in part, at the option of the
Company at a redemption price of $25.00 per share. Generally, the holders of
these shares have no voting rights except where dividends on these shares are in
arrears in an amount equivalent to dividends for six full dividend periods
(whether or not consecutive).

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

                                       9
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

The following is a discussion and analysis of the Company's financial condition
as of June 30, 1997 and the results of operations for the three months and nine
months ended June 30, 1997 and 1996. This discussion and analysis should be read
in conjunction with the attached unaudited consolidated financial statements and
notes thereto of the Company and the audited consolidated financial statements
and notes thereto contained in the Company's Annual Report dated September 30,
1996.

General

LaSalle Re was incorporated in Bermuda in October 1993 and initially capitalized
by several institutional and other investors with $373.1 million. It commenced
operations on November 22, 1993.  LaSalle Re Holdings Limited was incorporated
in Bermuda in September 1995. During the quarter ended December 31, 1995, the
Company and LaSalle Re consummated an offer (the "Exchange Offer") pursuant to
which, among other things, the Founding Shareholders exchanged their capital
stock of LaSalle Re for Common Shares of the Company and, in certain
circumstances, Exchangeable Non-Voting Shares of LaSalle Re. The Exchangeable
Non-Voting Shares are held by certain Founding Shareholders who would otherwise
hold, or cause another shareholder to hold, directly, indirectly or
constructively, in excess of 9.9% of the voting power of the Company or LaSalle
Re. The Exchangeable Non-Voting Shares are exchangeable, at the option of the
holder, for Common Shares on a one-for-one basis, unless the board of directors
of the Company determines such exchange may cause actual or potential adverse
tax consequences to the Company or any shareholder. The Exchangeable Non-Voting
Shares will at all times rank as to assets, dividends and in all other respects
on a parity with the common shares of LaSalle Re, except that they do not have
the right to vote on any matters except as required by Bermuda law and in
connection with certain actions by the Company.

In December 1996, the Company completed the Secondary Offering. In connection
with the Secondary Offering, certain Founding Shareholders of LaSalle Re
exchanged 2,119,110 of their Exchangeable Non-Voting Shares for Common Shares of
the Company. As a result of this exchange, the Company increased its ownership
of the outstanding capital stock of LaSalle Re from 63% to 73%. The Company has
continually owned 100% of the outstanding voting stock of LaSalle Re.

LaSalle Re Capital was incorporated in Bermuda to provide capital support to
selected Lloyd's of London syndicates. During the quarter ended December 31,
1996, LaSalle Re Capital was accepted as a corporate member of Lloyd's of
London. Effective January 1, 1997, it is participating in three syndicates which
individually write the following: marine insurance and reinsurance; professional
indemnity, directors and officers' insurance, bankers blanket bond business; and
direct and facultative business. LaSalle Re Capital provides support to the
syndicates through letters of credit.

In order to reduce its earnings volatility, protect its capital base and support
its dividend policy, the Company purchased a multi-year excess of loss
reinsurance program effective January 1, 1997. The program is event based,
providing up to $100 million of coverage in excess of the first $100 million of
losses for the first loss occurrence and $100 million of coverage in excess of
the first $150 million of losses for the second loss occurrence, with a $200
million aggregate coverage limit over a three-year period. The attachment point
is triggered by losses incurred directly by the Company. If and when the first
loss is triggered, the Company is required to accrue a reinstatement premium and
additional premiums will be payable in years 2 and 3 of the contract. The
Company has accounted for the first loss portion of the coverage as a deposit in
accordance with SFAS 113. If and when a second loss occurs, the Company will be
required to pay a one
===============================================================================

                                      10
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

time additional premium. If no losses occur, the contract can be canceled after
the first year with significant return premiums accruing to the Company. The
reinsurance is provided by a company which currently holds a rating of "A+"
(Superior) from A.M. Best Company, Inc. and a claims-paying rating of "AA"
(Excellent) from Standard & Poor's Rating Services.

In March 1997, the Company issued 3,000,000 Series A Preferred Shares in the
Preferred Offering. The Series A Preferred Shares, par value $1.00 per share,
carry a liquidation preference of $25.00 per share, plus accrued and unpaid
dividends, if any, to the date of liquidation. Dividends on the Series A
Preferred Shares are payable in an amount per share equal to 8.75% of the
liquidation preference per annum (equivalent to $2.1875 per share). Net proceeds
from the Preferred Offering after underwriting discounts and commissions were
$72.6 million.

On March 28, 1997 the Company commenced the $100 million Tender Offer whereby it
offered to purchase for cancellation up to 3,703,703 of its Common Shares at a
price no greater than $30.00 nor less than $27.00 per share. The Tender Offer
was made to all holders of Common Shares and Common Share equivalents, which
included options to purchase Common Shares, Exchangeable Non-Voting Shares and
options to purchase Exchangeable Non-Voting Shares. Pursuant to the Tender
Offer, 2,163,538 Exchangeable Non-Voting Shares were exchanged for Common Shares
of the Company and 95,679 options for Exchangeable Non-Voting Shares were
exercised and exchanged for Common Shares of the Company. As a result of these
exchanges, the Company has increased its ownership of the outstanding capital
stock of LaSalle Re from 73% to 79%. The Company has continually owned 100% of
the outstanding voting stock of LaSalle Re. The Tender Offer expired on April
25, 1997 with 5,508,314 Common Shares and Common Share equivalents tendered at a
tender price of $27.00. On May 6, 1997 the Company purchased 3,703,703 Common
Shares, for cancellation, at the tender price of $27.00. The Company has
deducted from share capital the par value of the shares canceled. The original
additional paid in capital has been eliminated from additional paid in capital
and the difference between the price received for the shares originally and the
price paid in the tender offer has been deducted from retained reserves.

With effect from April 11, 1997 the Company transferred the listing of its
Common Shares to the New York Stock Exchange from the Nasdaq National Market.
The Series A Preferred Shares are also listed on the New York Stock Exchange.

The Company primarily writes property catastrophe reinsurance on a worldwide
basis through its subsidiary, LaSalle Re. Property catastrophe reinsurance
contracts cover unpredictable events such as hurricanes, windstorms, hailstorms,
earthquakes, fires, industrial explosions, freezes, riots, floods and other man-
made or natural disasters. Therefore, there can be significant volatility in the
Company's results from fiscal quarter to quarter and fiscal year to year. In
addition, as a result of the Company's limited operating and claims history, the
financial data included herein are not necessarily indicative of the financial
condition or results of operations of the Company in the future.

Results of Operations - for the three months ended June 30, 1997 and 1996

Gross premiums written for the quarter ended June 30, 1997 were $29.5 million
compared to $26.7 million for the quarter ended June 30, 1996, an increase of
10.5%. This increase is primarily due to $4.4 million of gross premiums written
by LaSalle Re Capital in the quarter ended June 30, 1997. Since LaSalle Re
Capital was only accepted into Lloyd's with effect from January 1, 1997 there
is no comparative figure for LaSalle Re Capital for the quarter ended June 30,
1996.

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

                                      11
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

Following the trend seen in the quarter ended March 31, 1997 of a competitive
rate environment, property catastrophe premiums written by the Company in the
United States decreased 11.1% to $12.7 million for the three months ended June
30, 1997 compared to $14.3 million for the three months ended June 30, 1996.
International property catastrophe premiums written by the Company were stable
at $7.0 million for the three months ended June 30, 1997 compared to $7.2
million for the three months ended June 30, 1996.

In addition, the Company experienced favorable premium adjustments on excess of
loss and proportional contracts of $2.0 million in the quarter ended June 30,
1997 compared to $(0.3) million in the quarter ended June 30, 1996. This was
offset by a reduction in reinstatement premiums of $1.4 million due to more
favorable loss experience.

Premiums ceded for the quarter ended June 30, 1997 were $(1.7) million compared
to nil in the quarter ended June 30, 1996. This is attributable to the quarterly
recognition of a return premium provision on the reinsurance protection
purchased by LaSalle Re. Ceded premiums amortized were $0.5 million for the
quarter ended June 30, 1997 compared to nil in the quarter ended June 30, 1996.

As a result of the above, net premiums written for the quarter ended June 30,
1997 were $31.1 million compared to $26.7 million for the quarter ended June 30,
1996, an increase of $4.4 million or 16.5%.

Net premiums earned for the quarter ended June 30, 1997 were $45.9 million
compared to $55.3 million for the same quarter in 1996. The 17.0% decrease is
the result of a reduction in premiums written from calendar year 1996 to
calendar year 1997. Premiums on property catastrophe excess of loss contracts
are earned on a pro rata basis over the period coverage is provided, which is
generally 12 months. Under proportional property catastrophe contracts, the
risks underlying the contracts incept throughout the policy period and premiums
generally are earned over 18 months. Under contracts written by LaSalle Re
Capital, the risks underlying the contracts incept throughout the policy period
and premiums generally are earned over 18 to 24 months.

Net investment income increased 26.9% to $8.5 million for the quarter ended June
30, 1997 from $6.7 million for the quarter ended June 30, 1996. Annualized
investment income as a percentage of the average market value of invested assets
was 6.3% for the quarter ended June 30, 1997 compared to 5.6% for the quarter
ended June 30, 1996. The increase in net investment income was attributable to a
larger average investment base together with an increase in investment yields in
the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996.

Net realized losses on investments were $0.6 million during the quarter ended
June 30, 1997 compared to net realized gains of $0.05 million during the quarter
ended June 30, 1996. The losses for the quarter ended June 30, 1997 are
primarily attributable to shortening the duration of the portfolio at the start
of the quarter in response to an expected increase in market yields. Portfolio
duration was subsequently increased later in the quarter. In accordance with
generally accepted accounting principles, unrealized gains and losses on the
Company's investment portfolio are not recognized in the Company's consolidated
results of operations but are reflected as a separate component of shareholders'
equity.

Other income was $0.1 million during the quarter ended June 30, 1997. This
represents the income generated since January 1, 1997 from reinsurance related
services provided by the Company at an annual fee of $0.3 million under a
contract which became effective on January 1, 1997.

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

                                      12
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

The following table sets forth the Company's combined ratios for the quarters
ended June 30, 1997 and 1996:
<TABLE> 
<CAPTION> 
                                 June 30, 1997     June 30, 1996
                                 -------------------------------
<S>                              <C>               <C> 
Loss and loss expense ratio           9.7%             18.0%

Expense ratio                        24.1%             19.3%

Combined ratio                       33.8%             37.3%
</TABLE> 
Losses and loss expenses incurred represent losses paid and reserves established
in respect of specific losses and loss expenses reported by cedants and expected
loss development and additions to incurred-but-not-reported loss reserves.

Losses and loss expenses incurred during the quarter ended June 30, 1997 were
$4.5 million. The Company was not affected by any significant catastrophic
losses in the quarter. Losses and loss expenses incurred during the quarter
ended June 30, 1996 were $10.0 million and related to an assortment of United
States and international winter/spring storms and satellite losses from the in
orbit portion of coverages.

The expense ratio includes underwriting expenses and operational expenses.
Underwriting expenses include brokerage, commissions, excise taxes and other
costs related to underwriting reinsurance contracts.

Underwriting expenses were $8.0 million for the quarter ended June 30, 1997
compared to $7.7 million for the quarter ended June 30, 1996. As a percentage of
net earned premiums, underwriting expenses were 17.5% for the quarter ended June
30, 1997 compared to 14.0% for the quarter ended June 30, 1996. The increase is
primarily due to the settlement of a significant profit commission relating to a
program underwritten in fiscal year 1996, which had better than expected loss
ratios, and to the inclusion of a profit commission provision for contracts
underwritten in fiscal year 1997.

Operational expenses were $3.0 million during the quarter ended June 30, 1997
compared to $2.9 million for the quarter ended June 30, 1996. As a percentage of
net earned premiums, operational expenses were 6.6% during the quarter ended
June 30, 1997 compared with 5.3% for the quarter ended June 30, 1996. This
increase is due to lower earned premiums in the quarter ended June 30, 1997
compared to those earned in the quarter ended June 30, 1996.

Corporate expenses were $0.3 million during the quarter ended June 30, 1997.
These include costs associated with the completion of the Tender Offer and the
Company's move to the New York Stock Exchange. There were no corresponding
charges during the quarter ended June 30, 1996. All corporate expenses are
charged to income in the period they are incurred.

Interest expense was $0.5 million during the quarter ended June 30, 1997
compared with $0.06 million in the quarter ended June 30, 1996. The increase in
interest expense is due to financing charges associated with the deposit portion
of LaSalle Re's ceded reinsurance contract. Other interest expenses relate to
the ongoing commitment fees payable on the Company's credit facility. As at June
30, 1997, there were no borrowings under this facility.

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

                                       13
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

Foreign exchange gains in the quarter ended June 30, 1997 were $0.09 million
compared to foreign exchange losses of $0.6 million in the quarter ended June
30, 1996. The gain in the quarter ended June 30, 1997 resulted primarily from a
strengthening of Sterling and Yen against the United States Dollar, which was
offset by a decline in the value of the Deutsche Mark against the United States
Dollar. The losses in the quarter ended June 30, 1996 were due to the weak
performance of Yen and Deutsche Mark against the United States Dollar in
conjunction with a strengthening in Sterling in excess of the average forward
foreign exchange contract rates.

The Company's net income per share was $1.63 for the quarter ended June 30, 1997
and $1.70 for the quarter ended June 30, 1996. Following the Tender Offer, the
weighted average number of Common Shares and Common Share equivalents
outstanding fell from 23,967,950 for the quarter ended June 30, 1996 to 
22,169,529 for the quarter ended June 30, 1997.

Results of Operations - for the nine months ended June 30, 1997 and 1996

Gross premiums written for the nine months ended June 30, 1997 were $144.1
million compared to $171.9 million for the nine months ended June 30, 1996, a
decrease of 16.2%. The decrease in gross premiums written was due primarily to
reduced new and renewal premiums as a result of a worldwide competitive rating
environment in the last six months of the period combined with overall negative
premium adjustments recorded in the nine month period ended June 30, 1997.
Further, for the nine months ended June 30, 1997, compared to the nine months
ended June 30, 1996, the Company experienced a reduction in reinstatement
premiums of $4.7 million due to more favorable loss experience.

The decline in gross premiums written by the Company was partially offset by
$10.3 million of gross premiums written by LaSalle Re Capital in the nine months
ended June 30, 1997. Since LaSalle Re Capital was only accepted into Lloyd's
with effect from January 1, 1997 there is no comparative figure for the nine
months ended June 30, 1996.

Premiums ceded for the nine months ended June 30, 1997 were $8.5 million
compared to nil in the quarter ended June 30, 1996. This is attributable to
reinsurance protection purchased by LaSalle Re with effect from January 1, 1997
and to reinsurance purchased by LaSalle Re Capital. Ceded premiums amortized
were $0.8 million for the nine months ended June 30, 1997 compared to nil in the
nine months ended June 30, 1996.

Net premiums earned for the nine months ended June 30, 1997 were $130.4 million
compared to $158.4 million for the same period in 1996. The 17.7% decrease was
due to the overall decrease in premiums written in the previous fiscal year and
the nine months ended June 30, 1997.

Net investment income increased 28.5% to $24.8 million for the nine months ended
June 30, 1997 from $19.3 million for the nine months ended June 30, 1996. The
increase is principally attributable to a larger average investment base coupled
with an increase in yields in the nine months ended June 30, 1997 compared to
the nine months ended June 30, 1996. Annualized investment income as a
percentage of the average market value of invested assets was 6.2% for the nine
months ended June 30, 1997 compared to 5.5% for the nine months ended June 30,
1996.

Net realized losses on investments were $0.1 million during the nine months
ended June 30, 1997 compared to $0.06 net realized gains during the nine months
ended June 30, 1996.

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

                                      14
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

Other income is derived from reinsurance related services providing an annual
fee of $0.3 million. As the provision of these services began on January 1,
1997, there is no corresponding income in the nine months ended June 30, 1996.

The following table sets forth the Company's combined ratios for the nine month
periods ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
 
                                         June 30, 1997       June 30, 1996
                                         ---------------------------------
<S>                                      <C>                 <C>
Loss and loss expense ratio                  17.0%                27.9%

Expense ratio                                22.9%                18.7%

Combined ratio                               39.9%                46.6%
</TABLE> 
Losses and loss expenses incurred were $22.2 million during the nine months
ended June 30, 1997 compared with $44.2 million during the nine months ended
June 30, 1996. Losses and loss expenses incurred during the nine months ended
June 30, 1997 included development on Hurricane Fran, winter storm activity in
the United States, the United Kingdom and Europe and the triggering of aggregate
loss covers. Losses and loss expenses incurred during the nine months ended June
30, 1996 included a strengthening in reserves of $14.4 million for Hurricanes
Marilyn and Luis, $7.5 million for German hailstorms and $5.0 million for
Hurricane Opal.

Underwriting expenses were $20.9 million during the nine months ended June 30,
1997 compared to $21.5 million for the nine months ended June 30, 1996. As a
percentage of net premiums earned underwriting expenses were 16.0% for the nine
months ended June 30, 1997 compared to 13.5% for the nine months ended June 30,
1996. The increase is primarily due to the settlement of significant profit
commissions relating to one program underwritten in previous fiscal years, which
had better than expected loss ratios. The Company has recorded a provision for
profit commission on contracts underwritten in the current fiscal year. In
addition, the Company has experienced an increase in the level of profit
commissions accrued pursuant to the Underwriting Services Agreement. This
factor, combined with the reduction in net premiums earned, increased these fees
as a percentage of net premiums earned from 3.4% for the nine months ended June
30, 1996 to 4.2% for the nine months ended June 30, 1997.

Operational expenses were $9.0 million during the nine months ended June 30,
1997 compared to $8.1 million for the nine months ended June 30, 1996. As a
percentage of earned premiums, operational expenses were 6.9% during the nine
months ended June 30, 1997 compared with 5.1% for the nine months ended June 30,
1996. The increase is substantially due to increased fees pursuant to the
Administrative Services Agreement, additional executive compensation and
expenses relating to the operation of LaSalle Re Capital and a reduction in net
premiums earned in the nine months ended June 30, 1997 compared to the same
period in 1996.

Corporate expenses were $1.6 million during the nine months ended June 30, 1997
compared with $0.9 million in the nine months ended June 30, 1996. Corporate
expenses for the nine months ended June 30, 1997 included costs associated with
the Secondary Offering, the Preferred Offering, the Tender Offer, the formation
costs of LaSalle Re Capital and the Company's move to the New York Stock
Exchange. In 1996, corporate expenses included costs associated with the initial
public offering and all costs associated with the establishment of the Company's
credit facility. Corporate expenses do not include the underwriting discounts
associated with these offerings. These costs were borne by the selling
shareholders in the initial

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

                                      15
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

public offering and the Secondary Offering. In respect of the Preferred
Offering, the underwriting discount was charged to additional paid in capital.

Interest expense was $1.1 million during the nine months ended June 30, 1997
compared to $0.2 million in the nine months ended June 30, 1996. The increase in
interest expense is due to financing charges associated with the deposit portion
of LaSalle Re's ceded reinsurance contract. Other interest expenses relate to
the annual administration fee and the ongoing commitment fees payable on the
Company's credit facility. As at June 30, 1997, there were no borrowings under
this facility.

Foreign exchange losses in the nine months ended June 30, 1997 were $1.9 million
compared to losses of $1.4 million in the nine months ended June 30, 1996. The
losses in the nine months ended June 30, 1997 resulted from the unfavorable
closing of a Sterling forward contract, and an overall strengthening of the
United States Dollar since January 1, 1997 against the major foreign currencies
in which the Company writes premiums. The losses for the nine months ended June
30, 1996 were the result of several factors, including the decrease in the value
of Yen and Deutsche Marks relative to the United States dollar. Additionally,
the Company's Sterling foreign exchange contracts precluded participation in the
appreciation of Sterling in the third fiscal quarter above the Company's average
forward rate.

The Company's net income per share was $4.10 for the nine months ended June 30,
1997 and $4.25 for the nine months ended June 30, 1996. Following the Tender
Offer, the weighted average number of Common Shares and Common Share equivalents
outstanding fell from 23,897,590 for the nine months ended June 30, 1996 to
23,569,729 for the quarter ended June 30, 1997.

Liquidity and Capital Resources

As a holding Company, the Company's assets consist primarily of all of the
outstanding voting stock of LaSalle Re. The Company's cash flows depend
primarily on dividends and other permitted payments from LaSalle Re.

LaSalle Re's sources of funds consist of net premiums written, investment income
and proceeds from sales and redemptions of investments. Cash is used primarily
to pay losses and loss expenses, brokerage, commissions, excise taxes,
administrative expenses and dividends. Under the Insurance Act, 1978, amendments
thereto and related regulations of Bermuda (the Insurance Act), LaSalle Re is
prohibited from paying dividends of more than 25% of its opening statutory
capital and surplus unless it files an affidavit stating that it will continue
to meet the required solvency margin and minimum liquidity ratio requirements
and from declaring or paying any dividends without the approval of the Minister
of Finance if it failed to meet its required margins in the previous fiscal
year. The Insurance Act also requires LaSalle Re to maintain a minimum solvency
margin and minimum liquidity ratio and prohibits dividends which would result in
a breach of these requirements. In addition, LaSalle Re is prohibited under the
Insurance Act from reducing its total opening statutory capital by more than 15%
without the approval of the Minister of Finance. LaSalle Re currently meets its
requirements under the Insurance Act. In addition, the payment of dividends by
LaSalle Re is subject to the rights of holders of the Exchangeable Non-Voting
Shares to receive a pro rata share of any dividend and to its need to maintain
shareholders' equity adequate to support the level of LaSalle Re's reinsurance
operations.

Operating activities provided net cash of $71.0 million for the nine months
ended June 30, 1997 and $85.2 million for the nine months ended June 30, 1996.
Cash flows from operations in future

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

                                      16
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

years may differ substantially from net income. Cash flows are affected by loss
payments, which, due to the nature of the reinsurance coverage provided by
LaSalle Re, are generally expected to comprise large loss payments on a limited
number of claims and can therefore fluctuate significantly from year to year.
The irregular timing of these large loss payments can create significant
variations in operating cash flows between periods. LaSalle Re funds such
payments from cash flows from operations and sales of investments.

As a result of the potential for large loss payments, LaSalle Re maintains a
substantial portion of its assets in cash and marketable securities. As of June
30, 1997, 77.5% of its total assets were held in cash and marketable securities.
To further mitigate the uncertainty surrounding the amount and timing of
potential liabilities and to minimize interest rate risk, LaSalle Re maintains a
short average duration for its investment portfolio. The modified average
duration of the investment portfolio, including cash, was 2.59 years at June 30,
1997. At June 30, 1997, the fair value of the Company's total investment
portfolio, including cash, was $543.4 million.

The increase in cash and cash equivalents from $47.0 million as at September 30,
1996 to $67.4 million as at June 30, 1997 is attributable to managing the
portfolio duration to target benchmark, with funds realized on the sale of
securities only reinvested in new securities post June 30, 1997.

The Company has adopted the Statement of Financial Accounting Standard 115
("SFAS 115") to account for its marketable securities. In accordance with SFAS
115, all of the Company's investments are classified as "available for sale".
Under this classification, investments are recorded at fair market value and any
unrealized gains or losses are reported as a separate component of shareholders'
equity. The unrealized loss on the investment portfolio net of amounts
attributable to minority interest was $1.1 million at June 30, 1997 compared to
$1.9 million at September 30, 1996.

As of June 30, 1997, 77.4% of the securities held in the Company's investment
portfolio were fixed-income securities rated "AA" or better and 99.8% were
fixed-income securities rated "A" or better by S&P or Moody's Investors Services
Inc. ("Moody's"). No single investment comprised more than 5% of the overall
portfolio.

Reinsurance balances receivable were $103.8 million at June 30, 1997 compared to
$70.6 million at September 30, 1996. The increase is reflective of the
seasonality of premiums written with the Company traditionally writing its
highest level of premiums on January 1 of the fiscal year. In addition,
reinsurance balances receivable include $8.2 million relating to the business
underwritten by LaSalle Re Capital. These reasons also explain the increase in
the level of unearned premiums and deferred acquisition costs from $82.9 million
and $10.5 million, respectively, as at September 30, 1996 to $95.7 million and
$12.7 million, respectively, as at June 30, 1997.

Prepaid reinsurance premiums relate to the reinsurance coverage placed by the
Company at January 1, 1997. There was no corresponding coverage at September 30,
1996.

The increase in other assets from $1.6 million as at September 30, 1996 to $21.2
million as at June 30, 1997 is primarily due to the deposit portion of the ceded
reinsurance contract, accounted for in accordance with SFAS No 113.

In accordance with the terms of certain reinsurance contracts, the Company has
posted letters of credit in the amount of $9.8 million as of June 30, 1997 as
compared to $15.5 million as of September 30, 1996 to support outstanding loss
reserves. In connection with LaSalle Re Capital's

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

                                      17
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

support of three Lloyd's of London syndicates, the Company has posted letters of
credit in the amount of $16.3 million (equivalent to (Pounds)9.8 million) . All
letters of credit are secured by a lien on the Company's investment portfolio
equal to 115% of the amount of the outstanding letters of credit.

As at June 30, 1997, reserves for unpaid losses and loss expenses were $42.7
million. The reduction of $7.2 million in reserves for unpaid losses and loss
expenses from September 30, 1996 reflects the payment of losses outstanding as
at September 30, 1996 and the lack of significant catastrophic events in the
nine months ended June 30, 1997. The Company has no material commitments for
capital expenditures.

The increase in other liabilities from $11.1 million as at September 30, 1996 to
$38.9 million as at June 30, 1997 reflects the inclusion of $10.5 million
relating to reinsurance premiums payable and $12.9 million relating to the
settlement of an outstanding investment trade.

In February 1997, in connection with the Preferred Offering, the Board confirmed
the dividend policy pursuant to which the Company intends to distribute as
dividends to holders of Common Shares and Exchangeable Non-Voting Shares in each
fiscal year, 50% to 60% of the amount by which its net income (before minority
interest) from the prior fiscal year exceeds the amount of dividends payable on
Series A Preferred Shares in the current fiscal year.

On May 30, 1997, the Company paid a dividend of $0.3889 per share to holders of
record of Series A Preferred Shares on May 1, 1997. As of June 30, 1997,
dividends due but not yet declared on the Series A Preferred Shares amounted to
$0.5 million. On June 23, 1997 the Company declared a common share dividend of
$0.71 per share to shareholders of record on July 4, 1997 payable on July 18,
1997. The actual amount and timing of any future Common Share dividends is at
the discretion of the Board. The declaration and payment of any dividends is
dependent upon the profits and financial requirements of the Company and other
factors, including certain legal, regulatory and other restrictions. There can
be no assurance that the Company's dividend policy will not change or that the
Company will declare or pay any dividends in future periods.

The Company currently intends to repurchase up to $25 million of Common Shares
in open market or privately negotiated transactions from time to time depending
on market conditions and the Company's capital and liquidity requirements.

The Company has in place a $100 million committed line of credit from a
syndicate of banks. The proceeds from the credit facility may only be used to
buy preferred shares of LaSalle Re, which in turn may use the proceeds of such
purchase to meet current cash requirements. The facility matures December 1,
2000, and is secured by a pledge ("legal mortgage") of all the capital stock of
LaSalle Re held by the Company, including any preferred shares that may be
issued by LaSalle Re to the Company. The line of credit contains various
covenants, including: limitations on incurring additional indebtedness;
prohibitions of dividends and other restricted payments that would cause the
Company's tangible net worth (total shareholders' equity and minority interest)
to fall below $375 million for calendar years 1997 and 1998, and $400 million
thereafter; restriction of dividends per fiscal quarter to 12.5% of consolidated
net income of the Company for the immediately preceding fiscal year;
restrictions on the sale or lease of assets not in the ordinary course of
business; maintenance of a ratio of consolidated total debt to consolidated
tangible net worth of no more than 0.40 to 1.00; maintenance of tangible net
worth at the end of each fiscal year of the greater of $300 million or 70% of
net premiums written; maintenance of statutory capital of LaSalle Re at the end
of each fiscal year of at least $300 million; and maintenance of a

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

                                      18
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

ratio of net premiums written to statutory capital at the end of any fiscal
quarter for the four fiscal quarters then ended of no more than 1.00 to 1.00 in
each case.  In order for the Company to pay dividends in excess of 50% of net
income, the Company would have to renegotiate certain terms of its credit
facility. As of June 30, 1997, the credit facility had not been utilized.

The Company's financial condition and results of operations are influenced by
both internal and external forces.  Loss payments, investment returns and
premiums may be impacted by changing rates of inflation and other economic
conditions.  Cash flows from operations and the liquidity of its investment
portfolio are, in the Company's opinion, adequate to meet the Company's expected
cash requirements over the next 12 months.

In February 1997, the Financial Accounting Standards Board issued SFAS No. 128
"Earnings per Share." This statement is effective for financial statements
issued for periods ending after December 15, 1997, including interim periods.
Implementation of this new standard requires entities with simple capital
structures to disclose basic earnings per share on the face of the income
statement. All other entities are required to disclose basic and diluted
earnings per share. As a result, the Company will be required to disclose basic
and diluted earnings per share on the face of the income statement. The Company
believes that the calculation of basic earnings per share will result in
marginally increased earnings per share over the present calculation of primary
earnings per share and the calculation of the diluted earnings per share will
not materially differ from the present calculation of primary earnings per
share. The accounting standard will be adopted by the Company for the quarter
ending December 31, 1997.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130
"Reporting Comprehensive Income" and SFAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information." The statements are effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components within a set of financial
statements, accordingly, the Company will be required to provide additional
disclosure. SFAS 131 requires the Company to report financial and descriptive
information about its reportable operating segments. The Company is currently
reviewing the impact of this standard on its financial reporting.

Cautionary Statement Regarding Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of
Section 27A of the United States Securities Act of 1933, as amended, and Section
21E of the United States Securities Exchange Act of 1934, as amended. Forward-
looking statements are statements other than historical information or
statements of current condition. Some forward-looking statements may be
identified by use of terms such as "believes", "anticipates", "intends", or
"expects". These statements relate to the plans of the Company for future
operations, including the dividend policy pursuant to which the Company intends
to distribute as dividends to holders of Common Shares and Exchangeable Non-
Voting Shares in each fiscal year 50% to 60% of the amount by which its net
income (before minority interest) from the prior fiscal year exceeds the amount
of dividends payable on Series A Preferred Shares in the current fiscal year. In
light of the risks and uncertainties inherent in all future projections, these
statements should not be regarded as a representation that the objectives will
be achieved. Many factors could cause actual results to differ materially from
those in the forward-looking statements, including, but not limited, to the
following: catastrophic events of unanticipated frequency or severity; changes
in the demand for or supply of property catastrophe reinsurance; actions of
competitors; changes in the Company's financial ratings; changes in insurance or
tax laws or regulations or governmental interpretations
===============================================================================

                                      19
<PAGE>
 
                          LaSalle Re Holdings Limited

              Management's Discussion and Analysis of Operations
                            and Financial Condition
===============================================================================

thereof; changes in foreign economic conditions including currency rate
fluctuations; a major decrease in the cession of business from CNA Financial
Corporation ("CNA"); or the termination of any of the service agreements with
affiliates of Aon Corporation ("Aon") or CNA. The Company undertakes no
obligation to release publicly the results of any future revisions it may make
to forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

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

                                      20
<PAGE>
 
===============================================================================

                          LaSalle Re Holdings Limited
                          PART II - OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS.
 
          None.
 
ITEM 2.   CHANGES IN SECURITIES.
 
          None
 
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.
 
          None.
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
          None.
 
ITEM 5.   OTHER INFORMATION.
 
          Effective July 1, 1997 the Company entered into a $100 million multi-
          year Catastrophe Equity Put ("CatEPut") option program. The CatEPut
          option will enable the Company to put up to $100 million of equity,
          through the issue of convertible preferred shares at pre-negotiated
          terms, in the event of a major catastrophe or series of large
          catastrophes that cause substantial losses to the Company or its
          subsidiaries. The lead CatEPut option writer was European Reinsurance
          Company of Zurich, a subsidiary of Swiss Reinsurance Company. Allianz
          AG was the other major option writer, and affiliates of two of the
          Company's founding shareholders, Aon and CNA, wrote equal minor shares
          of the option.
 
          The Company and Aon have agreed in principle, subject to negotiation
          of a definitive agreement and approval of the Company's Board of
          Directors, to terminate the Administrative Services Agreement under
          which an affiliate of Aon has provided claims administration,
          actuarial and financial reporting, accounting, office space and other
          administrative services to the Company. No date has yet been
          established for the termination of the Administrative Services
          Agreement. The Company anticipates, however, that upon such
          termination all of the personnel currently assigned to the Company by
          the Aon affiliate will become employees of the Company. However, there
          can be no assurance that the Company will be able to retain all
          employees.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.
 
     (a)  Exhibits - The following exhibits are filed as part of this report on
          Form 10-Q:
 
          3.1  Memorandum of Association (Incorporated by reference to Exhibit
               3.1 to Registration Statement on Form S-1(File No. 33-97304)).

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

                                      21
<PAGE>
 
===============================================================================

          3.2  Bye-Laws (Incorporated by reference to Exhibit 3.1 to Form 10-Q
               for the quarterly period ended December 31, 1995 (File No. 
               0-27216)).

          10.1 Second Amendment and Waiver, dated as of March 13, 1997, to the
               Credit Agreement, dated as of December 1, 1995, among the
               Company, several banks and The Chase Manhattan Bank (formerly
               known as Chemical Bank), as administrative agent.

          11.1 Statement Regarding Computation of Net Income Per Common Share.

          27   Financial Data Schedule.
 
     (b)  Reports on Form 8-K - The following report on Form 8K was filed during
          the quarter ended June 30, 1997:
 
          Item Reported                                Date of Report
 
          Sale of equity securities pursuant to        January 6, 1997
          Regulation S

===============================================================================
 
                                      22
<PAGE>
 
===============================================================================

                          LaSalle Re Holdings Limited
                                  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.


                            LASALLE RE HOLDINGS LIMITED
 


Date: August 4, 1997        /s/ Victor H. Blake
                            -------------------
                            Name: Victor H. Blake
                            Title: Chairman, President & Chief Executive Officer



Date: August 4, 1997        /s/ Andrew Cook
                            ---------------
                            Name: Andrew Cook
                            Title: Chief Financial Officer & Treasurer

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