----

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|   x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------------|-----------------------------------------------------------------------------------------|

|   o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------------|------------------------------------------------------------------------------------------|

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| CAYMAN ISLANDS                                                                       | N/A                                  |
|--------------------------------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization)                       | (I.R.S. employer identification no.) |
|  65 MARKET STREETSUITE 1207, CAMANA BAYP.O. BOX 31110GRAND CAYMANCAYMAN ISLANDS |     KY1-1205     |
| (Address of principal executive offices)                                             | (Zip code)                           |

| Class A Ordinary Shares, $0.10 par value                                                                                                    | 30,196,835                                                          |
|---------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Class B Ordinary Shares, $0.10 par value                                                                                                    | 6,254,949                                                                     |
| (Class)                       | (Outstanding as of July 30, 2010)                                                                                                                                                                                                                                                                                                                                |

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TABLE OF CONTENTS

|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Page                     |                                         |
|--------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|----------------------------------------------|
| PART I — FINANCIAL INFORMATION |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Item 1.                              | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                     |                                         |
|                                 | Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                     | 3                                            |   |
|                                 | Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                     | 4                                            |   |
|                                 | Condensed Consolidated Statements of Shareholders' Equity for the Six Months Ended June 30, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                     | 5                                            |   |
|                                 | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                     | 6                                            |   |
|                                 | Notes to the Condensed Consolidated Financial Statements (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                     | 7                                            |   |
| Item 2.                              | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                     | 19                                           |   |
| Item 3.                              | Quantitative and Qualitative Disclosures about Market Risk                                                                                                               |   |                     |        29 |   |
| Item 4.                              | Controls and Procedures                                                                                                                                                                 |   |                     | 30                                           |   |
| PART II — OTHER INFORMATION    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Item 1.                              | Legal Proceedings                                                                                                                                                                       |   |                     | 31                                           |   |
| Item 1A.                             | Risk Factors                                                                                                                                                        |   |                     | 31                                           |   |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                                                                                                                      |   |                     | 31                                           |   |
| Item 3.                              | Defaults Upon Senior Securities                                                                                                                                     |   |                     | 31                                           |   |
| Item 4.                              | Removed and Reserved                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                     | 31                                           |   |
| Item 5.                              | Other Information                                                                                                                                                   |   |                     | 31                                           |   |
| Item 6.                              | Exhibits                                                                                                                                                            |   |                     | 31                                           |   |
| SIGNATURES                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |      |                                         |

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Item 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                                    |    | June 30, 2010 (unaudited)  |   |   | December 31,2009 |   |                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------|--------|--------|------------------|--------|--------------------------------------------|
| Assets                                                                                                                                                                                                                                  |    |                                 |   |   |             |   |                                       |
| Investments                                                                                                                                                                                                                             |    |                                 |   |   |             |   |                                       |
| Debt instruments, trading, at fair value                                                                                                                                                                                                | $       |      55,294 |   |   |             | $      | 95,838                                     |   |   |
| Equity securities, trading, at fair value                                                                                                                                                                                               |    |   649,431                       |   |   |             |   | 593,201                                    |   |   |
| Other investments, at fair value                                                                                                                                                                                                        |    |   169,665                       |   |   |             |   | 141,561                                    |   |   |
| Total investments                                                                                                                                                                                                                       |    |   874,390                       |   |   |             |   | 830,600                                    |   |   |
| Cash and cash equivalents                                                                                                                                                                                                               |    |   16,033                        |   |   |             |   | 31,717                                     |   |   |
| Restricted cash and cash equivalents                                                                                                                                                                                                    |    |   523,986                       |   |   |             |   | 590,871                                    |   |   |
| Financial contracts receivable, at fair value                                                                                                                                                                                           |    |   17,504                        |   |   |             |   | 30,117                                     |   |   |
| Reinsurance balances receivable                                                                                                                                                                                                         |    |   137,920                       |   |   |             |   | 82,748                                     |   |   |
| Loss and loss adjustment expense recoverables                                                                                                                                                                                           |    |   8,950                         |   |   |             |   | 7,270                                      |   |   |
| Deferred acquisition costs, net                                                                                                                                                                                                         |    |   45,338                        |   |   |             |   | 34,401                                     |   |   |
| Unearned premiums ceded                                                                                                                                                                                                                 |    |   5,510                         |   |   |             |   | 6,478                                      |   |   |
| Notes receivable                                                                                                                                                                                                                        |    |   15,434                        |   |   |             |   | 15,424                                     |   |   |
| Other assets                                                                                                                                                                                                                            |    |   6,537                         |   |   |             |   | 4,754                                      |   |   |
| Total assets                                                                                                                                                                                                                            | $       |  1,651,602                      |   |   |             | $      | 1,634,380                                  |   |   |
| Liabilities and shareholders’ equity                                                                                                                                                                                              |    |                                 |   |   |             |   |                                       |   |   |
| Liabilities                                                                                                                                                                                                                             |    |                                 |   |   |             |   |                                       |   |   |
| Securities sold, not yet purchased, at fair value                                                                                                                                                                                       | $       | 488,366                              |   |   |             | $      | 570,875                                    |   |   |
| Financial contracts payable, at fair value                                                                                                                                                                                              |    |   15,624                        |   |   |             |   | 16,200                                     |   |   |
| Due to prime brokers                                                                                                                                                                                                                    |    | 21,013                               |   |   |             |   | —                                    |   |   |
| Loss and loss adjustment expense reserves                                                                                                                                                                                               |    |   164,747                       |   |   |             |   | 137,360                                    |   |   |
| Unearned premium reserves                                                                                                                                                                                                               |    |   164,469                       |   |   |             |   | 118,899                                    |   |   |
| Reinsurance balances payable                                                                                                                                                                                                            |    |   32,028                        |   |   |             |   | 34,301                                     |   |   |
| Funds withheld                                                                                                                                                                                                                          |    |   17,787                        |   |   |             |   | 14,711                                     |   |   |
| Other liabilities                                                                                                                                                                                                                       |    | 11,786                               |   |   |             |   | 12,796                                     |   |   |
| Performance compensation payable to related party                                                                                                                                                                                       |    |   518                           |   |   |             |   | —                                    |   |   |
| Total liabilities                                                                                                                                                                                                                       |    |   916,338                       |   |   |             |   | 905,142                                    |   |   |
| Shareholders’ equity                                                                                                                                                                                                              |    |                                 |   |   |             |   |                                       |   |   |
| Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)                                                                                                                                                          |    | —                         |   |   |             |   | —                                    |   |   |
| Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,196,835 (2009: 30,063,893); Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2009: 6,254,949) |    |   3,645                         |   |   |             |   | 3,632                                      |   |   |
| Additional paid-in capital                                                                                                                                                                                                              |    |   483,327                       |   |   |             |   |     481,449            |   |   |
| Non-controlling interest in joint venture                                                                                                                                                                                               |    |   29,471                        |   |   |             |   |       30,597 |   |   |
| Retained earnings                                                                                                                                                                                                                       |    |   218,821                       |   |   |             |   | 213,560                                    |   |   |
| Total shareholders’ equity                                                                                                                                                                                                        |    |   735,264                       |   |   |             |   | 729,238                                    |   |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                                        | $  | $1,651,602                           |   |   |             | $      | 1,634,380                                  |   |   |

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GREENLIGHT CAPITAL RE, LTD.

|                                                                    |   | Three months ended June 30, |    | Six months ended June 30, |
|-------------------------------------------------------------------------|--------|----------------------------------|---------|--------------------------------|
|                                                                    |   | 2010                             |    | 2009                           |   | 2010 |   | 2009 |
| Revenues                                                                |   |                             |    |                           |
| Gross premiums written                                                  | $      | 88,956                           | $       | 70,047                         | $ | 155,843 | $ | 141,918 |   |
| Gross premiums ceded                                                    |   | (4,011                           | )  | (6,611                         | )  | (4,589 | ) | (7,831 | )  |
| Net premiums written                                                    |   | 84,945                           |    | 63,436                         |   | 151,254 |   | 134,087 |   |
| Change in net unearned premium reserves                                 |   | (35,544                          | )  | (14,089                        | )  | (46,537 | ) | (38,547 | )  |
| Net premiums earned                                                     |   | 49,401                           |    |  49,347                   |   | 104,717 |   | 95,540 |   |
| Net investment  income                                        |   | 22,632                           |    |  88,323                   |   | 5,801 |   | 116,040 |   |
| Other income (expense), net                                             |   | (374                             | )  |  (70                      | ) | (528) |   | 2,054 |   |
| Total revenues                                                          |   | 71,659                           |    |  137,600                  |   | 109,990 |   | 213,634 |   |
| Expenses                                                                |   |                             |    |                           |   |   |   |   |   |
| Loss and loss adjustment expenses incurred, net                         |   | 35,544                           |    |  23,547                   |   | 64,679 |   | 53,743 |   |
| Acquisition costs, net                                                  |   | 14,465                           |    |  15,578                   |   | 31,376 |   | 28,823 |   |
| General and administrative expenses                                     |   | 3,094                            |    |  5,330                    |   | 8,241 |   | 9,708 |   |
| Total expenses                                                          |   | 53,103                           |    |  44,455                   |   | 104,296 |   | 92,274 |   |
| Net income before non-controlling interest and income tax expense  |   | 18,556                           |    | 93,145                         |   | 5,694 |   | 121,360 |   |
| Non-controlling interest in income of joint venture                     |   | (854                             | )  |  (1,006                   | )  | (375) |   | (1,337 | )  |
| Net income before income tax expense                               |   | 17,702                           |    |  92,139                   |   | 5,319 |   | 120,023 |   |
| Income tax benefit (expense)                                            |   | (50                              | )  |  57                       |   | (58 | ) | (18 | )  |
| Net income                                                              | $      | 17,652                           | $       |  92,196                   |     $ | 5,261 | $ | 120,005 |   |
| Earnings per share                                                      |   |                             |    |                           |   |   |   |   |   |
| Basic                                                                   | $      | 0.48                             | $       |  2.54                     |  $ | 0.14 | $ | 3.32 |   |
| Diluted                                                                 | $      | 0.47                             | $       |  2.51                     |  $ | 0.14 | $ | 3.29 |   |
| Weighted average number of ordinary shares used in the determination of |   |                             |    |                           |   |   |   |   |   |
| Basic                                                                   |   | 36,436,903                       |    | 36,252,925                |   | 36,386,697 |   | 36,160,160 |   |
| Diluted                                                                 |   | 37,218,783                       |    | 36,689,711                |   | 37,155,475 |   | 36,503,890 |   |

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GREENLIGHT CAPITAL RE, LTD.

|                                                        |   | Six months ended June 30, 2010 |    |   | Six months ended June 30, 2009 |   |
|-------------------------------------------------------------|--------|--------------------------------|---------|--------|--------------------------------|--------|
| Ordinary share capital                                      |   |                           |    |   |                           |   |
| Balance – beginning of period                         |   | $                              | 3,632   |   |                           | $      | 3,604 |   |
| Issue of Class A ordinary share capital, net of forfeitures |   |                           | 13      |   |                           |   | 24 |   |
| Balance – end of period                               |   | $                              | 3,645   |   |                           | $      | 3,628 |   |
| Additional paid-in capital                                  |   |                           |    |   |                           |   |   |   |
| Balance – beginning of period                         |   | $                              | 481,449 |   |                           | $      | 477,571 |   |
| Issue of Class A ordinary share capital                     |   |                           | 32      |   |                           |   | 221 |   |
| Share-based compensation expense, net of forfeitures        |   |                           | 1,846   |   |                           |   | 1,519 |   |
| Balance – end of period                               |   | $                              | 483,327 |   |                           | $      | 479,311 |   |
| Non-controlling interest                                    |   |                           |    |   |                           |   |   |   |
| Balance – beginning of period                         |   | $                              | 30,597  |   |                           | $      | 6,058 |   |
| Non-controlling interest withdrawal from joint venture      |   |                           | (1,501  | )      |                           |   |  — |   |
| Non-controlling interest in income of joint venture    |   |                           | 375     |   |                           |   | 1,337 |   |
| Balance – end of period                               |   | $                              | 29,471  |   |                           | $      | 7,395 |   |
| Retained earnings                                           |   |                           |    |   |                           |   |   |   |
| Balance – beginning of period                         |   | $                              | 213,560 |   |                           | $      | 4,207 |   |
| Net  income                                       |   |                           | 5,261   |   |                           |   | 120,005 |   |
| Balance – end of period                               |   | $                              | 218,821 |   |                           | $      | 124,212 |   |
| Total shareholders’ equity                            |   | $                              | 735,264 |   |                           | $      | 614,546 |   |

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GREENLIGHT CAPITAL RE, LTD.

|                                                                                                 |   | Six months ended June 30, |            |
|------------------------------------------------------------------------------------------------------|--------|---------------------------|-----------------|
|                                                                                                 |   | 2010                      |            |   | 2009 |   |
| Cash provided by (used in) Operating activities                                                 |   |                      |            |   |   |   |
| Net income                                                                                           |   | $                         |   5,261    |   |   | $ | 120,005 |   |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities |   |                      |            |   |   |   |   |   |
|  Net change in unrealized gains and losses on investments and financial contracts               |   |                      | 18,842          |   |   |   | (112,668 | )  |
|  Net realized gains on investments and financial contracts                                      |   |                      |   (13,049  | )  |   |   | (18,272 | )  |
|  Foreign exchange gain on restricted cash and cash equivalents                                  |   |                      |   (18,730  | )  |   |   | (258 | )   |
|  Non-controlling interest in income of joint venture                                            |   |                      |   375      |   |   |   | 1,337 |   |
|  Share-based compensation expense                                                          |   |                      |   1,859    |   |   |   | 1,543 |   |
|  Depreciation expense                                                                           |   |                      |   112      |   |   |   | 20 |   |
| Net change in                                                                                        |   |                      |            |   |   |   |   |   |
| Reinsurance balances receivable                                                                      |   |                      |   (55,172  | )  |   |   | (46,154 | )  |
| Loss and loss adjustment expense recoverables                                                        |   |                      |   (1,680   | )  |   |   | 4,782 |   |
| Deferred acquisition costs, net                                                                      |   |                      |   (10,937  | )  |   |   | (16,488 | )  |
| Unearned premiums ceded                                                                              |   |                      |   968      |   |   |   | (2,446 | )  |
| Other assets                                                                                         |   |                      |   (1,895   | )  |   |   | (1,671 | )  |
| Loss and loss adjustment expense reserves                                                            |   |                      |   27,387   |   |   |   | 34,109 |   |
| Unearned premium reserves                                                                            |   |                      |   45,570   |   |   |   | 40,994 |   |
| Reinsurance balances payable                                                                         |   |                      |   (2,273   | )  |   |   | 10,134 |   |
| Funds withheld                                                                                       |   |                      |   3,076    |   |   |   | (645 | )  |
| Other liabilities                                                                                    |   |                      |   (1,010   | )  |   |   | 3,497 |   |
| Performance compensation payable to related party                                                    |   |                      |   518      |   |   |   | 12,698 |   |
|  Net cash (used in) provided by operating activities                                       |   |  $                   | (778            | )  |   |  $ | 30,517 |   |
| Investing activities                                                                                 |   |                      |            |   |   |   |   |   |
| Purchases of investments and financial contracts                                                     |   |                      |   (719,281 | )  |   |   | (618,825 | )  |
| Sales of investments and financial contracts                                                         |   |                      |   599,226  |   |   |   | 781,182 |   |
|          Change in due to prime brokers                 |   |                      |   21,013   |   |   |   |   — |   |
| Change in restricted cash and cash equivalents, net                                                  |   |                      |   85,615   |   |   |   | (138,584 | )  |
| Change in notes receivable, net                                                                 |   |                      |   (10      | )  |   |   | (15,183 | )  |
| Non-controlling interest withdrawal from joint venture                                          |   |                      |   (1,501   | )  |   |   | — |   |
|  Net cash (used in) provided by investing activities                                            |   | $                         |   (14,938  | )  |   | $ | 8,590 |   |
| Financing activities                                                                                 |   |                      |            |   |   |   |   |   |
| Net proceeds from exercise of stock options                                                          |   |                      |   32       |   |   |   | 221 |   |
| Net cash provided by financing activities                                                            |   |  $                   |   32       |   |   | $ | 221 |   |
| Net (decrease) increase in cash and cash equivalents                                            |   |                      |   (15,684  | )  |   |   | 39,328 |   |
| Cash and cash equivalents at beginning of the period                                                 |   |                      | 31,717          |   |   |   | 94,144 |   |
| Cash and cash equivalents at end of the period                                                       |   | $                    |  16,033    |   |   | $ | 133,472 |   |
| Supplementary information                                                                            |   |                      |            |   |   |   |   |   |
| Interest paid in cash                                                                                |   | $                         |   5,504    |   |   | $ | 2,610 |   |
| Interest received in cash                                                                            |   |                      |   3,346    |   |   |   | 3,548 |   |
| Income tax paid in cash                                                                              |   |                      |   15       |   |   |   | — |   |

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GREENLIGHT CAPITAL RE, LTD.

| 1. | GENERAL |
|----|---------|

| 2. | SIGNIFICANT ACCOUNTING POLICIES  |
|----|---------------------------------------|

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|                                                                            |   | Three months endedJune 30, |   | Six months endedJune 30, |   |
|---------------------------------------------------------------------------------|--------|----------------------------|--------|--------------------------|--------|
|                                                                            |   | 2010                       |   | 2009                     |   | 2010 |   | 2009 |   |
| Weighted average shares outstanding                                             |   | 36,436,903                 |   | 36,252,925               |   | 36,386,697 |   | 36,160,160 |   |
| Effect of dilutive service provider share-based awards                          |   | 181,126                    |   | 135,474                  |   | 178,955 |   | 116,400 |   |
| Effect of dilutive employee and director share-based awards                     |   | 600,754                    |   | 301,312                  |   | 589,823 |   | 227,330 |   |
|                                                                            |   | 37,218,783                 |   | 36,689,711               |   | 37,155,475 |   | 36,503,890 |   |
| Anti-dilutive stock options outstanding                                         |   | 160,000                    |   | 130,000                  |   | 160,000 |   | 146,001 |   |
| Participating securities excluded from calculation of loss per share  |   | —                    |   |  —            |   | — |   |  — |   |

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| 3. | FINANCIAL INSTRUMENTS  |
|----|-----------------------------|

|                                             |   | Fair value measurements as of June 30, 2010     |            |
|--------------------------------------------------|--------|-------------------------------------------------|-----------------|
| Description                                      |   | Quoted prices in active markets  (Level 1) |            |   | Significant other  observable inputs(Level 2) |   |   | Significantunobservable inputs(Level 3) |   |   | Total  |   |
|                                             |   | ($ in thousands)                                |            |
| Assets:                                          |   |                                            |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt instruments                                 |   | $                                               | —         |   |   | $ |   54,204 |   |   | $ |   1,090 |   |   | $ |   55,294 |   |
| Listed equity securities                         |   |                                            |   649,298  |   |   |   |   133 |   |   |   | — |   |   |   |   649,431 |   |
| Commodities                                      |   |                                            |   116,097  |   |   |   | — |   |   |   | — |   |   |   |   116,097 |   |
| Private and unlisted equity securities           |   |                                            |  —   |   |   |   |   1,702 |   |   |   | 36,924 |   |   |   |   38,626 |   |
| Put options                                      |   |                                            |   —  |   |   |   |   8,473 |   |   |   | — |   |   |   |   8,473 |   |
| Call options                                     |   |                                            | —         |   |   |   |   6,469 |   |   |   | — |   |   |   |   6,469 |   |
| Financial contracts receivable                   |   |                                            | —         |   |   |   |   16,863 |   |   |   | 641 |   |   |   |   17,504 |   |
|                                             |   | $                                               |   765,395  |   |   | $ |   87,844 |   |   | $ |   38,655 |   |   | $ |   891,894 |   |
| Liabilities:                                     |   |                                            |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt instruments, sold not yet purchased         |   | $                                               | —         |   |   | $ | (1,620 | )  |   | $ | — |   |   |   | (1,620 | ) |
| Listed equity securities, sold not yet purchased |   |                                            |   (484,767 | )  |   |   | — |   |   |   | — |   |   | $ |   (484,767 | )  |
| Put options                                      |   |                                            | —         |   |   |   |  (173 | )  |   |   | — |   |   |   |  (173 | ) |
| Call options                                     |   |                                            | —         |   |   |   |  (1,806 | )  |   |   | — |   |   |   |  (1,806 | ) |
| Financial contracts payable                      |   |                                            | —         |   |   |   |   (15,624 | )  |   |   | — |   |   |   |   (15,624 | )  |
|                                             |   | $                                          |   (484,767 | )  |   | $ | (19,223 | )  |   |  $ | — |   |   | $  |   (503,990 | ) |

|                                             |   | Fair value measurements as of December 31, 2009 |     |
|--------------------------------------------------|--------|-------------------------------------------------|----------|
|   Description                          |   | Quoted prices inactive markets(Level 1)         |     |   | Significant otherobservableinputs(Level 2) |   |   | Significantunobservableinputs(Level 3) |   |   | Total |   |
|                                             |   | ($ in thousands)                                |     |
| Assets:                                          |   |                                            |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt instruments                                 |   | $                                               | —  |   |   | $ | 94,301 |   |   | $ | 1,537 |   |   | $ | 95,838 |   |
| Listed equity securities                         |   |                                            | 593,201  |   |   |   | — |   |   |   | — |   |   |   | 593,201 |   |
| Commodities                                      |   |                                            | 102,239  |   |   |   | — |   |   |   | — |   |   |   | 102,239 |   |
| Private and unlisted equity securities           |   |                                            | —  |   |   |   | — |   |   |   | 25,228 |   |   |   | 25,228 |   |
| Put options                                      |   |                                            | —  |   |   |   | 8,809 |   |   |   | — |   |   |   | 8,809 |   |
| Call options                                     |   |                                            | —  |   |   |   | 5,285 |   |   |   | — |   |   |   | 5,285 |   |
| Financial contracts receivable                   |   |                                            | —  |   |   |   | 30,117 |   |   |   | — |   |   |   | 30,117 |   |
|                                             |   | $                                               | 695,440  |   |   | $ | 138,512 |   |   | $  | 26,765 |   |   | $  | 860,717 |   |
| Liabilities:                                     |   |                                            |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Listed equity securities, sold not yet purchased |   | $                                               | (570,875 | ) |   | $ | — |   |   | $ | — |   |   | $ | (570,875 | ) |
| Financial contracts payable                      |   |                                            | —  |   |   |   | (16,200 | ) |   |   | — |   |   |   | (16,200 | ) |
|                                             |   | $                                               | (570,875 | ) |   | $ | (16,200 | ) |   | $ | — |   |   | $ | (587,075 | ) |

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|                                                                                               |   |   Fair value measurements using significant unobservable inputs  (Level 3)Three months ended June 30, 2010 |          |                                        |   Fair value measurements using significant unobservable inputs (Level 3)Six months ended June 30, 2010 |          |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|---------------|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------|---------------|
|                                                                                               |   | Debt instruments                                                                                                          |          | Private and unlisted  equitysecurities |                                                                                                                   |          | Financial contracts receivable |   | Total |   |   | Debtinstruments |   |   | Privateand unlisted equitysecurities |   |   | Financial contracts receivable |   | Total |   |
|                                                                                               |   |    ($ in thousands)                                                                                                  |
| Beginning balance                                                                                  |   | $                                                                                                                              |   1,201  |                                        |  $                                                                                                                |   42,488 |   |  $ |   — |   |  $ |   43,689 |   |  $ |   1,537 |   |  $ |  25,228 |   |  $ | — |  $ |  26,765 |   |
| Purchases, sales, issuances, and settlements, net                                                  |   |                                                                                                                           |   (6     | )                                      |                                                                                                                   |   (5,949 | )  |   | 855 |   |   |   (5,100 | )  |   |   (12 | )  |   |   10,115 |   |   | 855 |   | 10,958 |   |
| Total  realized and unrealized gains (losses) and amortization included in earnings, net |   |                                                                                                                           |   (105   | )                                      |                                                                                                                   |   385    |   |   | (214 | )  |   | 66 |   |   |   (435 | )  |   |   1,581 |   |   | (214 | ) | 932 |   |
| Transfers into (out of) Level 3, net                                                               |   |                                                                                                                           |  — |                                        |                                                                                                                   | —       |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   | — |   |
| Ending balance, June 30, 2010                                                                      |   | $                                                                                                                         |  1,090   |                                        |  $                                                                                                                |   36,924 |   |  $ |   641 |   |  $ | 38,655 |   |  $ |   1,090 |   |  $ |   36,924 |   |  $ |   641 |  $ |   38,655 |   |

|                                                                   |   | Fair value measurements using significant unobservable inputs (Level 3)Three months ended June 30, 2009 |   |    | Fair value measurements using significant unobservable inputs (Level 3)Six months ended June 30, 2009 |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------|--------|---------|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                   |   | Debt instruments                                                                                             |   |    | Privateand unlisted  equitysecurities                                                                      |   |   | Total |   |   | Debtinstruments |   |   | Privateand unlisted equitysecurities |   |   | Total |   |
|                                                                   |   | ($ in thousands)                                                                                                  |   |
| Beginning balance                                                      |   | $                                                                                                                 | 9,352  |    |                                                                                                            | $      | 9,807 |   |   | $ | 19,159 |   | $ | 4,115 |   | $ | 11,776 |   | $ | 15,891 |   |
| Purchases, sales, issuances, and settlements, net                      |   |                                                                                                              | 20     |    |                                                                                                            |   | 200 |   |   |   | 220 |   |   | 1,751 |   |   | 118 |   |   | 1,869 |   |
| Total realized and unrealized gains (losses) included in earnings, net |   |                                                                                                              | 638    |    |                                                                                                            |   | (477 | ) |   |   | 161 |   |   | (847 | ) |   | (2,364 | ) |   | (3,211 | )  |
| Transfers into (out of) Level 3, net                                   |   |                                                                                                              | (3,204 | )  |                                                                                                            |   | — |   |   |   | (3,204 | ) |   | 1,787 |   |   | — |   |   | 1,787 |   |
| Ending balance, June 30, 2009                                          |   | $                                                                                                                 | 6,806  |    |                                                                                                            | $      | 9,530 |   |   | $ | 16,336 |   | $ | 6,806 |   | $ | 9,530 |   | $ | 16,336 |   |

| 2010                            |   | Cost/amortized cost |         |   | Unrealized gains |    |          | Unrealized losses |   |    | Fair value |    |
|---------------------------------|--------|--------------------------|--------------|--------|-----------------------|---------|---------------|------------------------|--------|---------|-----------------|---------|
|                            |   | ($ in thousands)         |         |
| Corporate debt – U.S.     |   | $                        | 40,632       |   |                  | $  | 20,572        |                   |   | $  |   (5,916   | )  |   | $  |   55,288 |   |
| Corporate debt – Non U.S. |   |                     |   16    |   |                  |    | —       |                   |   |    |   (10      | )  |   |   |   6 |   |
| Total debt instruments          |   | $                        |  40,648 |   |                  | $  |   20,572 |                   |   | $  |   (5,926   | )  |   | $  |   55,294 |   |

| 2009                            |   | Cost/amortized cost |   |   | Unrealized gains |         |   | Unrealized losses |   |       | Fair value |   |
|---------------------------------|--------|--------------------------|--------|--------|-----------------------|--------------|--------|------------------------|--------|------------|-----------------|--------|
|                            |   | ($ in thousands)         |   |
| Corporate debt – U.S.     | $      | 60,121                   |   |   |  $               | 36,040       |   |                   | $      | (5,555)    |            |   | $ | 90,606 |   |   |
| Corporate debt – Non U.S. |   |   2,961             |   |   |                  |   2,274 |   |                   |   |   (3) |            |   |   | 5,232 |   |   |
| Total debt instruments          | $      | 63,082                   |   |   | $                     | 38,314       |   |                   | $      | (5,558)    |            |   | $ | 95,838 |   |   |

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|                   |   | Cost/amortizedcost     |          |   | Fair value |   |
|------------------------|--------|------------------------|---------------|--------|-----------------|--------|
|                   |   |  ($ in thousands) |          |
| Within one year        |   | $                      |   3,497  |   |            | $      |   4,573 |   |
| From one to five years |   |                   | 15,477        |   |            |   |   22,673 |   |
| From five to ten years |   |                   |   19,191 |   |            |   |   26,746 |   |
| More than ten years    |   |                   |   2,483  |   |            |   |   1,302 |   |
|                   |   | $                      |  40,648  |   |            | $      |   55,294 |   |

| 2010                    |   | Cost             |           |   | Unrealized gains |    |          | Unrealized losses |   |    | Fair value |    |
|-------------------------|--------|------------------|----------------|--------|-----------------------|---------|---------------|------------------------|--------|---------|-----------------|---------|
|                    |   | ($ in thousands) |           |
| Equities – listed |   | $                |   638,750 |   |                  | $  |   64,643 |                   |   | $  |   (72,231  | )  |   | $ |   631,162 |   |
| Exchange traded funds   |   |             |   7,002   |   |                  |    |   11,267 |                   |   |    |  —   |    |   |   |   18,269 |   |
|                    |   | $                |   645,752 |   |                  | $  |   75,910 |                   |   | $  |  (72,231   | )  |   | $  |   649,431 |   |

| 2009                    |   | Cost             |    |   | Unrealized gains |    |          | Unrealized losses |   |   | Fair value |   |
|-------------------------|--------|------------------|---------|--------|-----------------------|---------|---------------|------------------------|--------|--------|-----------------|--------|
|                    |   | ($ in thousands) |    |
| Equities – listed |   | $                | 510,229 |   |                  | $       |  104,768 |                   |   | $      | (40,040)        |   |   | $  | 574,957 |   |
| Exchange traded funds   |   |             | 7,879   |   |                  |    | 10,365        |                   |   |   | —         |   |   |   | 18,244 |   |
|                    |   | $                | 518,108 |   |                  | $  | 115,133       |                   |   | $      | (40,040)        |   |   | $  | 593,201 |   |

| 2010                                         |   | Cost             |          | Unrealizedgains |    | Unrealized losses |   | Fair value |           |
|---------------------------------------------------|--------|------------------|---------------|-----------------|---------|------------------------|--------|-----------------|----------------|
|                                              |   | ($ in thousands) |          |
| Commodities                                       |   | $           |   96,553 |            | $       |   19,544          |   | $               |  —  |   | $ |   116,097 |   |
| Private  and unlisted equity securities |   |             |   40,121 |            |    |   1,817           |   |            |   (3,312  | )  |   | 38,626 |   |
| Put options                                       |   |             |   15,034 |            |    | —                |   |            |   (6,561  | )  |   |   8,473 |   |
| Call options                                      |   |             |   4,252  |            |    |   2,217           |   |            |   — |   |   |   6,469 |   |
|                                              |   | $           |  155,960 |            | $  |   23,578          |   | $               |   (9,873  | )  | $ | 169,665 |   |

| 2009                                   |   |   | Cost             |   |   |   | Unrealizedgains |   |   |   | Unrealized losses |   |   |   | Fairvalue |   |
|----------------------------------------|--------|--------|------------------|--------|--------|--------|-----------------|--------|--------|--------|-------------------|--------|--------|--------|-----------|--------|
|                                   |   |   | ($ in thousands) |   |
| Commodities                            |   | $      | 96,552           |   |   | $      | 5,687           |   |   | $      | —           |   |   | $      | 102,239   |   |
| Private and unlisted equity securities |   |   | 27,636           |   |   |   | 1,430           |   |   |   | (3,838            | )      |   |   | 25,228    |   |
| Put options                            |   |   | 6,269            |   |   |   | 2,540           |   |   |   | —           |   |   |   | 8,809     |   |
| Call options                           |   |   | 6,406            |   |   |   | 51              |   |   |   | (1,172            | )      |   |   | 5,285     |   |
|                                   |   | $      | 136,863          |   |   | $      | 9,708           |   |   | $      | (5,010            | )      |   | $      | 141,561   |   |

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|                                   |    |  Proceeds   |    | Unrealized gains |          | Unrealized losses |    |           | Fairvalue |    |
|----------------------------------------|---------|------------------|---------|------------------|---------------|-------------------|---------|----------------|-----------|---------|
|                                   |    | ($ in thousands) |    |
| Equities – listed                | $  |   (498,652  | )  | $           |   93,961 |              | $  |   (41,109 | )    | $  |   (445,800 | )  |
| Warrants and rights on listed equities |    | —          |    |             | —       |              |    |   (531    | )    |    |   (531 | )  |
| Exchange traded funds                  |    |   (41,520   | )  |             |   3,084  |              |    | —        |      |    |   (38,436 | )  |
| Debt instruments                       |    | (1,573           | )  |             | —       |              |    | (47            | )    |    |  (1,620 | )  |
| Put options                            |    | (1,392           | )  |             |  1,219   |              |    | —        |      |    |  (173 | ) |
| Call options                           |    |   (826 | )  |             | —       |              |    |  (980     | )    |    |  (1,806 | )  |
|                                   | $  |   (543,963  | )  | $                |   98,264 |              | $  |   (42,667 | )    | $  | (488,366 | )  |

|                                   |   |  Proceeds   |   |   | Unrealized gains |    |   | Unrealized losses |   |    | Fairvalue |   |
|----------------------------------------|--------|------------------|--------|--------|------------------|---------|--------|-------------------|--------|---------|-----------|--------|
|                                   |   | ($ in thousands) |   |
| Equities - listed                 | $      | (536,895         | )      |   | $                | 62,278  |   |              | $      | (79,525 | )         | $      | (554,142 | ) |
| Warrants and rights on listed equities |   | —          |   |   |             | — |   |              |   | (733    | )         |   | (733 | ) |
| Exchange traded funds                  |   | (15,678          | )      |   |             | — |   |              |   | (322    | )         |   | (16,000 | ) |
|                                   | $      | (552,573         | )      |   | $                | 62,278  |   |              | $      | (80,580 | )         | $      | (570,875 | ) |

| Financial contracts                                    | Listing currency |   | Notional amount of underlying instruments |   | Fair value of net assets(obligations) on financial contracts |           |
|--------------------------------------------------------|-----------------------|--------|------------------------------------------------|--------|------------------------------------------------------------------------|----------------|
|                                                   |                  |   | ($ in thousands)                               |   |
|  Financial contracts receivable         |                  |   |                                           |   |                                                                   |           |   |
| Interest rate options                                  | USD                   |   | 1,723,954                                      |   | $                                                                      |   7,022   |   |
| Credit default swaps, purchased – sovereign debt | USD                   |   |   117,353                                 |   |                                                                   |   5,284   |   |
| Credit default swaps, purchased – corporate debt | USD                   |   |   141,261                                 |   |                                                                   |   1,482   |   |
| Total return swaps – equities                    | USD                   |   |   50,246                             |   |                                                                   |   3,075   |   |
| Weather derivative swap                                | USD                   |   | 10,000                                         |   |                                                                   | 641            |   |
| Total financial contracts receivable, at fair value    |                  |   |                                           |   | $                                                                      |   17,504  |   |
|                                                   |                  |   |                                           |   |                                                                   |           |   |
|  Financial contracts payable                      |                  |   |                                           |   |                                                                   |           |   |
| Credit default swaps, purchased – sovereign debt | USD                   |   |   189,898                                 |   | $                                                                      |   (2,365  | )  |
| Credit default swaps, purchased – corporate debt | USD                   |   |   121,118                                 |   |                                                                   |   (3,885  | ) |
| Credit default swaps, issued – corporate debt    | USD                   |   |   13,909                                  |   |                                                                   |   (8,322  | ) |
| Total return swaps – equities                    | USD                   |   |   20,898                                  |   |                                                                   |   (1,052  | ) |
| Total financial contracts payable, at fair value       |                  |   |                                           |   | $                                                                      |   (15,624 | )  |

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| Financial contracts | Listing currency |   | Notional amount of underlying instruments |   | Fair value of net assets(obligations) on financial contracts |   |
|---------------------|-----------------------|--------|------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                |                  |   | ($ in thousands)                               |   |

| Financial contracts receivable                         |   |   |   |      |   |   |    |   |
|--------------------------------------------------------|--------|--------|--------|-----------|--------|--------|---------|--------|
| Interest rate options                                  |   | USD    |   | 1,723,954 |   | $      | 20,325  |   |
| Credit default swaps, purchased – sovereign debt |   | USD    |   | 315,722   |   |   | 5,322   |   |
| Total return swaps – equities                    |   | USD    |   | 45,516    |   |   | 4,470   |   |
| Total financial contracts receivable, at fair value    |   |   |   |      |   | $      | 30,117  |   |
|                                                   |   |   |   |      |   |   |    |   |
| Financial contract payable                             |   |   |   |      |   |   |    |   |
| Credit default swaps, purchased – sovereign debt |   | USD    |   | 20,811    |   | $      | (128    | )      |
| Credit default swaps, purchased – corporate debt |   | USD    |   | 121,118   |   |   | (7,281  | )      |
| Credit default swaps, issued – corporate debt    |   | USD    |   | 13,909    |   |   | (8,739  | )      |
| Total return swaps – equities               |   | USD    |   | 2,286     |   |   | (52     | )      |
| Total financial contracts payable, at fair value       |   |   |   |      |   | $      | (16,200 | )      |

| Derivatives not designated as hedging instruments      |   | Location of gains and losses on derivatives recognized in income |   | Gain (loss) on derivatives recognized in income for the three months ended June 30, |          |    | Gain (loss) on derivatives recognized in income for the six months ended June 30, |   |
|--------------------------------------------------------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|---------------|---------|-----------------------------------------------------------------------------------|--------|
|                                                   |   |                                                             |   | 2010                                                                                |          |    | 2009                                                                              |   |   | 2010 |   |   | 2009 |   |
|                                                   |   |                                                             |   | ($ in thousands)                                                                    |          |    | ($ in thousands)                                                                  |   |
| Interest rate options                                  |   | Net investment income                                            |   | $                                                                                   |   (8,097 | )  |                                                                              | $      | 4,838 |   |   |   (13,303 | )  | $ |  5,808 |   |
| Credit default swaps, purchased – corporate debt |   | Net investment income                                            |   |                                                                                |   2,531  |    |                                                                              |   | (10,154 | )  |   |   2,528 |   |   | (6,237 | )  |
| Credit default swaps, purchased – sovereign debt |   | Net investment income                                            |   |                                                                                |   5,764  |    |                                                                              |   | (7,559 | )  |   |   7,922 |   |   | (9,596 | )  |
| Total return swaps – equities                    |   | Net investment income                                            |   |                                                                                |   818    |    |                                                                              |   | 12,488 |   |   |   1,615 |   |   | 1,902 |   |
| Credit default swaps, issued – corporate debt    |   | Net investment income                                            |   |                                                                                |   (618   | )  |                                                                              |   | 176 |   |   |   767 |   |   | (1,810 | )  |
| Options, futures, warrants, and rights                 |   | Net investment income                                            |   |                                                                                |   (1,205 | )  |                                                                              |   | (4,525 | )  |   |   (8,490 | )  |   | (6,913 | )  |
| Weather derivative swap                                |   | Other income (expense)                                           |   |                                                                                |  (214    | )  |                                                                              |   | — |   |   | (214 | ) |   | — |   |
| Total                                                  |   |                                                             |   | $                                                                                   |   (1,021 | )  |                                                                              | $      | (4,736 | )  | $ |   (9,175 | )  | $ | (16,846 | ) |

|                                              |   | Three months ended June 30, 2010 |           |   | Six months ended June 30, 2010 |
|---------------------------------------------------|--------|----------------------------------|----------------|--------|--------------------------------|
| Derivatives not designated as hedging instruments |   | Entered                          |           |   | Exited                         |   |   | Entered |   |   | Exited |
|                                              |   | ($ in thousands)                 |
| Credit default swaps                              |   | $                                |   318,125 |   |                           | $ |   75,502 |   | $ |   318,125 |   | $ |   206,146 |
| Total return swaps                                |   |                             |   19,862  |   |                           |   |   302 |   |   |   30,099 |   |   |   4,418 |
| Weather derivative swap                           |   |                             | 15,000         |   |                           |   | — |   |   | 15,000 |   |   | — |
| Futures                                           |   |                             |  —  |   |                           |   | — |   |   |  44,436 |   |   |  41,762 |
| Options – equity                            |   |                             |   134,141 |   |                           |   |   139,383 |   |   |   322,401 |   |   | 141,582 |
| Total                                             |   | $                                |   487,128 |   |                           | $ |   215,187 |   | $ |   730,061 |   | $ |   393,908 |

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|                                              |   | Three months ended June 30, 2009 |      |   | Six months ended June 30, 2009 |
|---------------------------------------------------|--------|----------------------------------|-----------|--------|--------------------------------|
| Derivatives not designated as hedging instruments |   | Entered                          |      |   | Exited                         |   |   | Entered |   |   | Exited |
|                                              |   | ($ in thousands)                 |
| Credit default swaps                              |   | $                                | 131,078   |   |                           | $ | — |   | $ | 164,421 |   | $ | 20,850 |
| Total return swaps                                |   |                             | —   |   |                           |   | 9,635 |   |   | — |   |   | 12,144 |
| Interest rate options                             |   |                             | 875,400   |   |                           |   | — |   |   | 903,170 |   |   | — |
| Options – equity                            |   |                             | 120,205   |   |                           |   | 14,426 |   |   | 127,800 |   |   | 22,028 |
| Rights – equity                             |   |                             | 3,743     |   |                           |   | 1,599 |   |   | 7,870 |   |   | 4,211 |
| Total                                             |   | $                                | 1,130,426 |   |                           | $ | 25,660 |   | $ | 1,203,261 |   | $ | 59,233 |

| 4. | REINSURANCE BALANCES RECEIVABLE |
|----|---------------------------------|

| 5. | RETROCESSION |
|----|--------------|

|                         |   | Number of non-vestedrestricted shares |     |    | Weighted averagegrant date fair value |   |
|------------------------------|--------|--------------------------------------------|----------|---------|--------------------------------------------|--------|
| Balance at December 31, 2009 |   |                                       | 474,782  |    |                                       | $      | 16.51 |   |
| Granted                      |   |                                       | 131,500  |    |                                       |   | 24.64 |   |
| Vested                       |   |                                       | (140,285 | )  |                                       |   | 16.02 |   |
| Forfeited                    |   |                                       | (898     | )  |                                       |   | 16.17 |   |
| Balance at June 30, 2010     |   |                                       | 465,099  |    |                                       | $      | 18.95 |   |

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|                         |   | Number of options |      |   | Weighted averageexercise price |   |    | Weighted average grant date fair value |   |
|------------------------------|--------|------------------------|-----------|--------|------------------------------------------|--------|---------|-------------------------------------------------------|--------|
| Balance at December 31, 2009 |   |                   | 1,281,340 |   |                                     |   | 14.24   |                                                  |   |   | 6.33 |   |
| Granted                      |   |                   | —   |   |                                     |   | — |                                                  |   |   | — |   |
| Exercised                    |   |                   | (2,340    | )      |                                     |   | 13.85   |                                                  |   |   | 7.13 |   |
| Forfeited                    |   |                   | —   |   |                                     |   | — |                                                  |   |   | — |   |
| Expired                      |   |                   | —   |   |                                     |   | — |                                                  |   |   | — |   |
| Balance at June 30, 2010     |   |                   | 1,279,000 |   |                                     | $      | 14.24   |                                                  |   | $ | 6.33 |   |

|                                         |   | Six months endedJune 30, 2010 |       |   | Six months endedJune 30, 2009 |   |
|----------------------------------------------|--------|-------------------------------|------------|--------|-------------------------------|--------|
|                                         |   | Class A                       |       |   | Class B                       |   |   | Class A |   |   | Class B |   |
| Balance – beginning of period          |   |                          | 30,063,893 |   |                          |   | 6,254,949 |   |   |   | 29,781,736 |   |   |   | 6,254,949 |   |
| Issue of ordinary shares, net of forfeitures |   |                          | 132,942    |   |                          |   | — |   |   |   | 239,657 |   |   |   | — |   |
| Balance – end of period                |   |                          | 30,196,835 |   |                          |   | 6,254,949 |   |   |   | 30,021,393 |   |   |   | 6,254,949 |   |

| 8. | COMMITMENTS AND CONTINGENCIES  |
|----|-------------------------------------|

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|                                                   |   | 2010             |          | 2011   |    | 2012    |   | 2013    |    | 2014   |    | Thereafter |   | Total   |    |
|--------------------------------------------------------|--------|------------------|---------------|--------|---------|---------|--------|---------|---------|--------|---------|------------|--------|---------|---------|
|                                                   |   | ($ in thousands) |          |
| Operating lease obligations                            |   | $                | 138           |   | $  | 276     |   | $  | 276     |   | $  | 276        |   | $  | 276     |   | $  | 967 |   | $  | 2,209 |   |
| Specialist service agreement                           |   |             | 250           |   |    | 400     |   |    | 150     |   |    | —    |   |    | — |   |   | — |   |   | 800 |   |
| Private equity and limited partnerships (1)  |   |             |   19,221 |   |    | — |   |    | — |   |    | —    |   |    | — |   |   | — |   |   |   19,221 |   |
|                                                   |   | $           |   19,609 |   | $  | 676     |   | $  | 426     |   | $  | 276        |   | $  | 276     |   | $  | 967 |   | $  |   22,230 |   |

| (1)   | Given the nature of these investments, the Company is unable to determine with any degree of accuracy when these commitments will be called. Therefore, for purposes of the above table, the Company has assumed that all commitments with no fixed payment schedules will be called during the year ending December 31, 2010. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                              |   |   |             |   |   |             |             |
|-----------------------------------|--------|--------|------------------|--------|--------|------------------|------------------|
|                              |   |   | Available        |   |   | Termination Date |             | Notice period required for termination |   |
|                              |   |   | ($ in thousands) |   |   |             |             |   |   |   |
| Citibank N.A                      |   | $      | 400,000          |   |   |             | October 11, 2010 |   | 60 days prior to termination date |   |
| Butterfield Bank (Cayman) Limited |   |   | 60,000           |   |   |             | June 30, 2011    |   | 90 days prior to termination date |   |
| Bank of America, N.A              |   |   | 50,000           |   |   |             | July 20, 2011    |   | 90 days prior to termination date |   |
|                              |   | $      | 510,000          |   |   |             |             |   |   |   |

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| 9. | SEGMENT REPORTING |
|----|-------------------|

|                        |     | Three months endedJune 30, 2010 |    |    | Three months endedJune 30, 2009 |   | Six months endedJune 30, 2010 |   |   Six months endedJune 30, 2009 |   |
|-----------------------------|----------|---------------------------------|---------|---------|---------------------------------|--------|-------------------------------|--------|--------------------------------------|--------|
|                        |     | ($ in thousands)                |    |    | ($ in thousands)                |   | ($ in thousands)              |   | ($ in thousands)                     |   |
| Property                    |     |                            |    |    |                            |   |                          |   |                                 |   |   |   |   |   |   |   |   |   |
| Commercial lines            |   $ | 2,250                           |    | 2.5     | %                               | $      | 2,250                         |   | 4.3                                  | %      | $ | 9,416 |   | 6.0 | % | $ | 8,563 |   | 6.0 | % |
| Personal lines              |     | 32,998                          |    | 37.1    |                            |   | 18,421                        |   | 25.2                                 |   |   | 45,611 |   | 29.3 |   |   | 31,532 |   | 22.2 |   |
| Total Property              |     | 35,248                          |    | 39.6    |                            |   | 20,671                        |   | 29.5                                 |   |   | 55,027 |   | 35.3 |   |   | 40,095 |   | 28.2 |   |
| Casualty                    |     |                            |    |    |                            |   |                          |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| General liability           |     | 11,988                          |    | 13.5    |                            |   | 10,928                        |   | 15.6                                 |   |   | 15,099 |   | 9.7 |   |   | 14,203 |   | 10.0 |   |
| Marine liability            |     | —                         |    | — |                            |   | —                       |   | —                              |   |   | 483 |   | 0.3 |   |   | — |   | — |   |
| Motor liability             |     | 18,556                          |    | 20.9    |                            |   | 24,429                        |   | 34.9                                 |   |   | 29,649 |   | 19.0 |   |   | 41,947 |   | 29.7 |   |
| Motor physical damage       |     | 216                             |    | 0.2     |                            |   | —                       |   | —                              |   |   | 1,327 |   | 0.9 |   |   | — |   | — |   |
| Professional liability      |     | 287                             |    | 0.3     |                            |   | —                       |   | —                              |   |   | 1,307 |   | 0.8 |   |   | 4,545 |   | 3.2 |   |
| Total Casualty              |     | 31,047                          |    | 34.9    |                            |   | 35,357                        |   | 50.5                                 |   |   | 47,865 |   | 30.7 |   |   | 60,695 |   | 42.9 |   |
| Specialty                   |     |                            |    |    |                            |   |                          |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Financial                   |     | 10,278                          |    | 11.6    |                            |   | —                       |   | —                              |   |   | 15,650 |   | 10.0 |   |   | — |   | — |   |
| Health                      |     | 11,451                          |    | 12.9    |                            |   | 8,948                         |   | 12.8                                 |   |   | 33,769 |   | 21.7 |   |   | 26,589 |   | 18.7 |   |
| Medical malpractice         |     | (237                            | )  | (0.3    | )                               |   | —                       |   | —                              |   |   | (1,929 | ) | (1.2 | )  |   | 1,033 |   | 0.7 |   |
| Workers’ compensation |     | 1,169                           |    | 1.3     |                            |   | 5,071                         |   | 7.2                                  |   |   | 5,461 |   | 3.5 |   |   | 13,506 |   | 9.5 |   |
| Total Specialty             |     | 22,661                          |    | 25.5    |                            |   | 14,019                        |   | 20.0                                 |   |   | 52,951 |   | 34.0 |   |   | 41,128 |   | 28.9 |   |
|                        | $        | 88,956                          |    | 100.0   | %                               | $      | 70,047                        |   | 100.0                                | %      |   $ | 155,843 |   | 100 | % | $ | 141,918 |   | 100.0 | % |

|          |   | Three months endedJune 30, 2010 | Three months endedJune 30, 2009 | Six months endedJune 30, 2010 | Six months endedJune 30, 2009 |   |
|---------------|--------|---------------------------------|---------------------------------|-------------------------------|-------------------------------|--------|
|          |   | ($ in thousands)                | ($ in thousands)                | ($ in thousands)              | ($ in thousands)              |   |
| USA           | $      | 79,205                          |                            | 89.0                          | %                             | $      | 70,047 |   | 100 | % | $ | 127,030 |   | 81.5 | % | $ | 121,560 |   | 85.7 | % |
| Worldwide (2) |   | 9,751                           |                            | 11.0                          |                          |   | — |   | — |   |   | 28,813 |   | 18.5 |   |   | 20,358 |   | 14.3 |   |
|          | $      | 88,956                          |                            | 100.0                         | %                             | $      | 70,047 |   | 100.0 | % | $ | 155,843 |   | 100.0 | % | $ | 141,918 |   | 100.0 | % |

| (1)   | During the second quarter of 2010, the Company refined its method of presenting the lines of business and geographic area of risks insured within its one operating segment. The historical comparative balances presented above have been reclassified to conform to the current period presentation. |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | "Worldwide" risk is comprised of individual policies that insure risks on a worldwide basis. |
|-----------------|---------------------------------------------------------------------------------------------------|

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Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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|                                                                                                 |   |                                                        |   |           |       |              |    |               |    |          |             |    |   |         |    |   |
|------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|----------------|------------|-------------------|---------|--------------------|---------|---------------|------------------|---------|--------|--------------|---------|--------|
|                                                                                                 |   | June 30, 2010                                               |   | March 31, 2010 |       | December 31, 2009 |    | September 30, 2009 |    | June 30, 2009 |             |
|                                                                                                 |   |   ($ in thousands, except per share and share amounts) |   |
| Basic adjusted and fully diluted adjusted book value per share numerator:                  |   |                                                        |   |           |       |              |    |               |    |          |             |
| Total shareholders' equity (GAAP)                                                                    | $      | 735,264                                                     |   | $              | 716,694    |              | $       | 729,238            |    | $             | 648,677          |    | $      | 614,546      |    |
|        Less: Non-controlling interest in joint venture            |   | (29,471                                                     | )      |           | (29,517    | )            |    | (30,597            | )  |          | (8,111           | )  |   |  (7,395 | )  |
| Basic adjusted book value per share numerator                                              | $      | 705,793                                                     |   | $              | 687,177    |              | $       | 698,641            |    | $             | 640,566          |    | $      | 607,151      |    |
|       Add: Proceeds from in-the-money options issued and outstanding        |   | 16,590                                                      |   |           | 16,590     |              |    |  16,623       |    |          | 16,031           |    |   | 16,642       |    |
| Fully diluted adjusted book value per share numerator                                                | $      | 722,383                                                     |   | $         | 703,767    |              | $  |  715,264      |    | $             |  656,597    |    | $      | 623,793      |    |
| Basic adjusted and fully diluted adjusted book value per share denominator:                     |   |                                                        |   |           |       |              |    |               |    |          |             |    |   |         |    |
| Ordinary shares issued and outstanding for basic adjusted book value per share denominator |   | 36,451,784                                                  |   |           | 36,415,902 |              |    |  36,318,842   |    |          |  36,308,842 |    |   | 36,276,342   |    |
|       Add: In-the-money stock options issued and outstanding      |   | 1,419,000                                                   |   |           | 1,419,000  |         |    | 1,421,340     |    |          | 1,406,340        |    |   | 1,460,840    |    |
| Fully diluted adjusted book value per share denominator                                              |   | 37,870,784                                                  |   |           | 37,834,902 |              |    |  37,740,182   |    |          |  37,715,182 |    |   | 37,737,182   |    |
|                                                                                                 |   |                                                        |   |           |       |              |    |               |    |          |             |    |   |         |    |
| Basic adjusted book value per share                                                                  | $      | 19.36                                                       |   | $         | 18.87      |              | $       | 19.24              |    | $             | 17.64            |    | $      | 16.74        |    |
| Fully diluted adjusted book value per share                                                          | $      | 19.07                                                       |   | $         | 18.60      |              | $  | 18.95              |    | $             | 17.41            |    | $      | 16.53        |    |

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|      |   | Three months endedJune 30, |   | Six months endedJune 30, |
|-----------|--------|----------------------------|--------|--------------------------|
|      |   | ($ in thousands)           |   | ($ in thousands)         |
|      |   | 2010                       |   | 2009                     |   | 2010 |   | 2009 |
| Frequency | $      | 86,720                     |   | 97.5                     | % |   | $ | 67,047 |   | 95.7 | % |   | $ | 139,061 |   | 89.2 | % |   |   | $ | 113,846 |   | 80.2 | % |
| Severity  |   | 2,236                      |   | 2.5                      |   |   |   | 3,000 |   | 4.3 |   |   |   | 16,782 |   | 10.8 |   |   |   |   | 28,072 |   | 19.8 |   |
| Total     | $      | 88,956                     |   | 100.0                    | % |   | $ | 70,047 |   | 100.0 | % |   | $ | 155,843 |   | 100.0 | % |   |   | $ | 141,918 |   | 100.0 | % |

|      |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|-----------|--------|----------------------------|--------|--------|--------------------------|--------|
|      |   | ($ in thousands)           |   |   | ($ in thousands)         |   |
|      |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Frequency | $      | 82,709                     |   | 97.4   | %                        | $      | 60,716 |   | 95.7 | % |   | $ | 134,472 |   |   |   | 88.9 | % |   | $ | 106,769 |   |   |   | 79.6 | % |
| Severity  |   | 2,236                      |   | 2.6    |                     |   | 2,720 |   | 4.3 |   |   |   | 16,782 |   |   |   | 11.1 |   |   |   | 27,318 |   |   |   | 20.4 |   |
| Total     | $      | 84,945                     |   | 100.0  | %                        | $      | 63,436 |   | 100.0 | % |   | $ | 151,254 |   |   |   | 100.0 | % |   | $ | 134,087 |   |   |   | 100.0 | % |

|      |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|-----------|--------|----------------------------|--------|--------|--------------------------|--------|
|      |   | ($ in thousands)           |   |   | ($ in thousands)         |   |
|      |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Frequency | $      | 42,751                     |   | 86.5   | %                        | $      | 38,154 |   | 77.3 | % |   | $ | 88,612 |   |   |   | 84.6 | % |   | $ | 70,032 |   |   |   | 73.3 | % |
| Severity  |   | 6,650                      |   | 13.5   |                     |   | 11,193 |   | 22.7 |   |   |   | 16,105 |   |   |   | 15.4 |   |   |   | 25,508 |   |   |   | 26.7 |   |
| Total     | $      | 49,401                     |   | 100.0  | %                        | $      | 49,347 |   | 100.0 | % |   | $ | 104,717 |   |   |   | 100.0 | % |   | $ | 95,540 |   |   |   | 100.0 | % |

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|      |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|-----------|--------|----------------------------|--------|--------|--------------------------|--------|
|      |   | ($ in thousands)           |   |   | ($ in thousands)         |   |
|      |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Frequency | $      | 32,397                     |   | 91.1   | %                        | $      | 23,800 |   | 101.0 | % |   | $ | 61,113 |   |   |   | 94.5 | % |   | $ | 40,777 |   |   |   | 75.9 | % |
| Severity  |   | 3,147                      |   | 8.9    |                     |   | (253 | ) | (1.0 | ) |   |   | 3,566 |   |   |   | 5.5 |   |   |   | 12,966 |   |   |   | 24.1 |   |
| Total     | $      | 35,544                     |   | 100.0  | %                        | $      | 23,547 |   | 100.0 | % |   | $ | 64,679 |   |   |   | 100.0 | % |   | $ | 53,743 |   |   |   | 100.0 | % |

|                    |   | Three months endedJune 30, 2010 |   |   | Three months endedJune 30, 2009 |   |
|-------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
|                    |   | Gross                           |   |   | Ceded                           |   |   | Net |   |   | Gross |   |   | Ceded |   |   | Net |   |
|                    |   | ($ in thousands)                |   |
| Losses paid (recovered) |   | $                               | 18,315 |   |                            |   | (528) |   |   |   | 17,787 |   |   | $ | 8,817 |   |   | $ | (1,156 | ) |   | $ | 7,661 |   |
| Change in reserves |   |                            | 18,509 |   |                            |   | (752) |   |   |   | 17,757 |   |   |   | 15,766 |   |   |   | 120 |   |   |   | 15,886 |   |
| Total                   |   | $                               | 36,824 |   |                            |   | (1,280) |   |   |   | 35,544 |   |   | $ | 24,583 |   |   | $ | (1,036 | ) |   | $ | 23,547 |   |

|                     |   | Six months endedJune 30, 2010 |   |   | Six months endedJune 30, 2009 |   |
|--------------------------|--------|-------------------------------|--------|--------|-------------------------------|--------|
|                     |   | Gross                         |   |   | Ceded                         |   |   | Net |   |   | Gross |   |   | Ceded |   |   | Net |   |
|                     |   | ($ in thousands)              |   |
| Losses paid (recovered)  |   | $                             | 39,881 |   |                          |   | (950) |   |   |   | 38,931 |   |   | $ | 17,189 |   |   | $ | (2,312 | ) |   | $ | 14,877 |   |
| Change  in reserves |   |                          | 27,429 |   |                          |   | (1,681) |   |   |   | 25,748 |   |   |   | 34,083 |   |   |   | 4,783 |   |   |   | 38,866 |   |
| Total                    |   | $                             | 67,310 |   |                          |   | (2,631) |   |   |   | 64,679 |   |   | $ | 51,272 |   |   | $ | 2,471 |   |   | $ | 53,743 |   |

| ·   | Adverse loss development of $5.1 million based on our quarterly reserve analysis, related to a motor liability contract currently in run-off; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Adverse loss development of $3.4 million based on data received from the client and our quarterly reserve analysis, related to California wildfires on a 2007 casualty clash contract, resulting in losses being reserved at the full contract  limit; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Elimination of $1.9 million of reserves held on a medical malpractice contract based on our quarterly reserve analysis; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | Aggregate favorable loss development of $1.6 million on two catastrophe contracts based on data received from the client and our quarterly reserve analysis. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|      |   | Three months endedJune 30, |   |   | Six months endedJune 30, |   |
|-----------|--------|----------------------------|--------|--------|--------------------------|--------|
|      |   | ($ in thousands)           |   |   | ($ in thousands)         |   |
|      |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Frequency | $      | 13,574                     |   | 93.8   | %                        | $      | 14,124 |   | 90.7 | % |   | $ | 29,571 |   |   |   | 94.2 | % |   | $ | 27,616 |   |   |   | 95.8 | % |
| Severity  |   | 891                        |   | 6.2    |                     |   | 1,454 |   | 9.3 |   |   |   | 1,805 |   |   |   | 5.8 |   |   |   | 1,207 |   |   |   | 4.2 |   |
| Total     | $      | 14,465                     |   | 100.0  | %                        | $      | 15,578 |   | 100.0 | % |   | $ | 31,376 |   |   |   | 100.0 | % |   | $ | 28,823 |   |   |   | 100.0 | % |

|                                                                        |   | Three months endedJune 30, |     | Six months endedJune 30, |    |
|-----------------------------------------------------------------------------|--------|----------------------------|----------|--------------------------|---------|
|                                                                        |   | ($ in thousands)           |     | ($ in thousands)         |    |
|                                                                        |   | 2010                       |     | 2009                     |    | 2010 |   | 2009 |   |
| Realized gains (losses) and movement in unrealized gains (losses), net | $      | 23,850                     |   $ | 97,757                   | $       | 13,150 |   $ | 131,198 |   |
| Interest, dividend and other investment income                         |   | 8,422                      |     | 6,683                    |    | 10,812 |   | 9,729 |   |
| Interest, dividend and other investment expenses                            |   | (5,943                     | )   | (3,902                   | )  | (11,203 | )  | (7,436 | )  |
| Investment advisor compensation                                             |   | (3,697                     | )   | (12,215                  | )  | (6,958 | )  | (17,451 | )  |
| Net investment income                                                       | $      | 22,632                     |   $ | 88,323                   | $       | 5,801 |   $ | 116,040 |   |

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|                   |   | Six months endedJune 30, 2010 |   |   | Six months endedJune 30, 2009 |   |
|------------------------|--------|-------------------------------|--------|--------|-------------------------------|--------|
|                   |   | Frequency                     |   |   | Severity                      |   |   | Total |   |   | Frequency |   |   | Severity |   |   | Total |   |
| Loss ratio             |   |                          | 69.0   | %      |                          |   | 22.1 | % |   |   | 61.7 | % |   |   | 58.2 | % |   |   | 50.8 | % |   |   | 56.3 | % |
| Acquisition cost ratio |   |                          | 33.4   | %      |                          |   | 11.2 | % |   |   | 30.0 | % |   |   | 39.4 | % |   |   | 4.7 | % |   |   | 30.2 | % |
| Composite ratio        |   |                          | 102.4  | %      |                          |   | 33.3 | % |   |   | 91.7 | % |   |   | 97.6 | % |   |   | 55.5 | % |   |   | 86.5 | % |
| Internal expense ratio |   |                          |   |   |                          |   |   |   |   |   | 7.9 | % |   |   |   |   |   |   |   |   |   |   | 10.2 | % |
| Combined ratio         |   |                          |   |   |                          |   |   |   |   |   | 99.6 | % |   |   |   |   |   |   |   |   |   |   | 96.7 | % |

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|      |   | June 30, 2010    |   |   | December 31, 2009 |    |
|-----------|--------|------------------|--------|--------|-------------------|---------|
|      |   | CaseReserves     |   |   | IBNR              |    |   | Total |   |   | CaseReserves |   |   | IBNR |   |   | Total |   |
|      |   | ($ in thousands) |   |
| Frequency |   | $                | 35,230 |   |              | $  | 79,181 |   |   | $  | 114,411 |   |   | $ | 19,704 |   |   | $ | 69,166 |   |   | $ | 88,870 |   |
| Severity  |   |             | 19,266 |   |              |    | 31,070 |   |   |   | 50,336 |   |   |   | 20,472 |   |   |   | 28,018 |   |   |   | 48,490 |   |
| Total     |   | $                | 54,496 |   |              | $  | 110,251 |   |   | $  | 164,747 |   |   | $ | 40,176 |   |   | $ | 97,184 |   |   | $ | 137,360 |   |

| Zone              |   | Single EventLoss |   |   | AggregateLoss |   |
|-------------------|--------|------------------|--------|--------|---------------|--------|
|              |   | ($ in thousands) |   |
| United States (1) |   | $                | 89,091 |   |          | $      | 110,053 |   |
| Europe            |   |             | 57,113 |   |          |   | 57,113 |   |
| Japan             |   |             | 69,613 |   |          |   | 69,613 |   |
| Rest of the world |   |             | 49,613 |   |          |   | 49,613 |   |
| Maximum Aggregate |   |             | 89,091 |   |          |   | 110,053 |   |

| (1)   | Includes the Caribbean |
|-----------------|------------------------|

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|                                          |   | Less than 1 year |          |   | 1-3 years |   |    | 3-5 years |   |   | More than 5 years |   |   | Total  |    |
|-----------------------------------------------|--------|-----------------------|---------------|--------|-----------|--------|---------|-----------|--------|--------|------------------------|--------|--------|--------|---------|
|                                          |   | ($ in thousands)      |          |
| Operating lease obligations (1)               |   | $                     | 276           |   |      |   | 552     |      |   |   | 552                    |   |   |   | 829     |   |   |   | 2,209 |   |
| Specialist service agreement                  |   |                  | 500           |   |      |   | 300     |      |   |   | —                |   |   |   | — |   |   |   | 800 |   |
| Private equity investments (2)                |   |                  |   19,221 |   |      |   | — |      |   |   | —                |   |   |   | — |   |   |   |   19,221 |   |
| Loss and loss adjustment expense reserves (3) |   |                  | 69,616        |   |      |   | 59,779  |      |   |   | 26,083                 |   |   |   | 9,269   |   |   |   | 164,747 |   |
|                                          |   | $                     |   89,613 |   |      |   | 60,631  |      |   |   | 26,635                 |   |   |   | 10,098  |   |   |   |   186,977 |   |

| (2) | As of June 30, 2010, we had made commitments to invest a total of $40.4 million in private investments. As of June 30, 2010, we had invested $21.2 million of this amount, and our remaining commitments to these investments were $19.2 million. Given the nature of these investments, we are unable to determine with any degree of accuracy when the remaining commitment will be called. Therefore, for purposes of the above table, we have assumed that all commitments with no fixed payment schedules will be made within one year. Under our investment guidelines, in effect as of the date hereof, no more than 10% of the assets in the investment portfolio may be held in private equity securities without specific approval from the Board of Directors. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Due to the nature of our reinsurance operations the amount and timing of the cash flows associated with our reinsurance contractual liabilities will fluctuate, perhaps materially, and, therefore, are highly uncertain. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

|             |   |    |   10% increase in U.S. dollar |    |   |                                              | 10% decrease in U.S. dollar |   |    |
|------------------|--------|---------|-----------------------------------------|---------|--------|---------------------------------------------------|-----------------------------|--------|---------|
| Foreign Currency |   |    | Change infair value                     |    |   | Change in fair value as % of investment portfolio |                        |   |    | Change infair value |   |   | Change in fair value as % of investment portfolio |   |   |
|             |   |    |  ($ in thousands)                  |    |   |
| British Pounds   |   | $  |   (1,046                           | )  |   |   (0.1                                       | )%                          |   | $  |   1,046 |   |   |   0.1 | %  |   |
| Euro             |   |    |   (2,762                           | )  |   |   (0.3                                       | )                           |   |    |   3,287 |   |   |   0.4 |   |   |
| Indian Rupee     |   |    |  1,082                             |    |   |   0.1                                        |                        |   |    |   (1,082 | ) |   |   (0.1 | )  |   |
| Japanese Yen     |   |    |   12,383                           |    |   |   1.4                                        |                        |   |    |   (5,278 | )  |   |   (0.6 | )  |   |
| Swiss Franc      |   |    |   (2,401                           | )  |   |   (0.3                                       | )                           |   |    |   2,401 |   |   |   0.3 |   |   |
| Other            |   |    |   (180                             | )  |   |   (0.0                                       | )                      |   |    |   180 |   |   |   0.0 |   |   |
| Total       |   | $  | 7,076                                   |    |   |   0.8                                        | %                           |   | $  | 554 |   |   |   0.1 | %  |   |

|                                     |   | 100 basis point increasein interest rates |   |                                                   |   | 100 basis point decreasein interest rates |   |                |
|------------------------------------------|--------|------------------------------------------------|--------|--------------------------------------------------------|--------|-------------------------------------------|--------|---------------------|
|                                     |   | Change infair value                            |   | Change in fair value as % of investment portfolio |   |                                      |   | Change infair value |   | Change in fair value as % of investment portfolio |   |   |
|                                     |   | ($ in thousands)                               |   |                                                   |
|  Debt instruments                   | $      |   (1,460                                  | )      |   (0.2                                            | )%     |                                      |   |  $             |   1,543 |   |   0.2 |  % |   |
|  Credit default swaps               |   |   (135                                    | )      |   (0.0                                            | )      |                                      |   |                |   135 |   |   0.0 |   |   |
|  Interest rate options              |   |   8,336                                   |   |   1.0                                             |   |                                      |   |                |   (4,042 | ) |   (0.5 | ) |   |
|  Net exposure to interest rate risk | $      |   6,741                                   |   |   0.8                                             | %      |                                      |   |  $             |   (2,364 | ) |   (0.3 | )% |   |

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Item 4. CONTROLS AND PROCEDURES

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PART II — OTHER INFORMATION

Item 1.     LEGAL PROCEEDINGS

Item 1A.  RISK FACTORS

Item 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Item 3.    DEFAULTS UPON SENIOR SECURITIES 

Item 4.    REMOVED AND RESERVED

Item 5.    OTHER INFORMATION

Item 6. EXHIBITS

| 10.1 | Letter of understanding dated June 10, 2010 between Greenlight Reinsurance, Ltd. and Citibank, N.A.                                                     |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2 | Amended letter of credit agreement executed June 14, 2010 between Greenlight Reinsurance, Ltd. and Bank of America, N.A.                                |
| 10.3 | Amended and restated letter of credit agreement executed June 17, 2010 between Greenlight Reinsurance, Ltd. and Butterfield Bank (Cayman) Limited       |
| 10.4 | Greenlight Capital Re, Ltd. Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 on Form 8-K filed on May 4, 2010) |
| 12.1 | Ratio of Earnings to Fixed Charges and Preferred Share Dividends                                                                                        |
| 31.1 | Certification of the Chief Executive Officer filed hereunder pursuant to Section 302 of the Sarbanes Oxley Act of 2002                                  |
| 31.2 | Certification of the Chief Financial Officer filed hereunder pursuant to Section 302 of the Sarbanes Oxley Act of 2002                                  |
| 32.1 | Certification of the Chief Executive Officer filed hereunder pursuant to Section 906 of the Sarbanes Oxley Act of 2002                                  |
| 32.2 | Certification of the Chief Financial Officer filed hereunder pursuant to Section 906 of the Sarbanes Oxley Act of 2002                                  |

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SIGNATURES

|   | GREENLIGHT CAPITAL RE, LTD.                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (Registrant)                                                                                                                                                                                  |
|   |  /s/ Leonard Goldberg                                                                          |
|   | Name:                                                                                                                                                                                         | Leonard Goldberg |
|   | Title:                                                                                                                                                                                        | Chief Executive Officer |
|   | Date:                                                                                                                                                                                         | August 2, 2010 |
|   |  /s/ Tim Courtis                             |
|   | Name:                                                                                                                                                                                         | Tim Courtis |
|   | Title:                                                                                                                                                                                        | Chief Financial Officer |
|   | Date:                                                                                                                                                                                         | August 2, 2010 |