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SECURITIES AND EXCHANGE COMMISSION




FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended: September 30, 2003

Commission file number: 1-31310

(HUB INTL. LOGO)

HUB INTERNATIONAL LIMITED

(Exact name of registrant as specified in its
Charter)

|                                                                                             |  |                                                   
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Ontario, Canada(State or other jurisdiction of
    incorporation or organization)            |  | 36-4412416(I.R.S. Employer Identification
    No.)
|55 East Jackson Boulevard, Chicago,
    Illinois(Address of principal executive
    offices) |  | 60604(Zip Code)                                   

(877) 402-6601

Registrants telephone number, including
area code

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.

Yes þ          No o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act.)

Yes þ          No o

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

|                   |  |                                          
|------------------ |  | -----------------------------------------
|ClassCommon Shares |  | Outstanding at November 5, 200330,314,305



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##### 



HUB INTERNATIONAL LIMITED

INDEX

|                                                                                                                         |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                                         |  | Page
|                                                                                                                         |  |     
|PART I. FINANCIAL INFORMATION                                                                                            |  |      |    | 
|                                                                                                                        
|Item 1. Financial Statements
    (Unaudited)                                                                             |  |      | 3  | 
|                                                                                                                        
|Consolidated Balance Sheets as of
    September 30, 2003 and December 31, 2002                                           |  |      | 3  | 
|                                                                                                                        
|Consolidated Statements of Earnings for the three
    months and nine months ended September 30, 2003 and 2002           |  |      | 4  | 
|                                                                                                                        
|Consolidated Statements of Retained Earnings for
    the nine months ended September 30, 2003 and 2002                   |  |      | 5  | 
|                                                                                                                        
|Consolidated Statements of Cash Flows for the
    three months and the nine months ended September 30, 2003
    and 2002 |  |      | 6  | 
|                                                                                                                        
|Notes to Interim Consolidated Financial Statements                                                                       |  |      | 7  | 
|                                                                                                                        
|Item 2. Managements Discussion
    and Analysis of Financial Condition and
    Results of Operations                    |  |      | 21 | 
|                                                                                                                        
|Item 3. Quantitative and Qualitative
    Disclosures about Market Risk                                                   |  |      | 33 | 
|                                                                                                                        
|Item 4. Controls and Procedures                                                                                          |  |      | 33 | 
|                                                                                                                        
|PART II. OTHER INFORMATION                                                                                               |  |      |    | 
|                                                                                                                        
|Item 1. Legal Proceedings                                                                                                |  |      | 33 | 
|                                                                                                                        
|Item 2. Changes in Securities and
    Use of Proceeds                                                                    |  |      | 33 | 
|                                                                                                                        
|Item 5. Other Information                                                                                                |  |      | 33 | 
|                                                                                                                        
|Item 6. Exhibits and Reports on
    Form 8-K                                                                             |  |      | 34 | 
|                                                                                                                        
|SIGNATURES                                                                                                               |  |      | 35 | 





|                              |                                 
|----------------------------- | --------------------------------
|2   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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##### 



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements
(Unaudited)


Hub International Limited

Consolidated Balance Sheets


As of September 30, 2003 and
December 31, 2002

(in thousands of U.S. dollars)


|                                                  |  |             |         |      |  |   |         | 
|------------------------------------------------- |  | ----------- | ------- | ---- |  | - | ------- | 
|                                                  |  | 2003        |         | 2002
|                                                  |  |             |         |     
|                                                  |  | (Unaudited) |         |     
|ASSETS                                            |  |             |         |      |  |   |         | 
|Current assets:                                   |  |             |         |      |  |   |         | 
|Cash and cash equivalents                         |  | $           | 79,061  |      |  | $ | 40,642  | 
|Trust cash                                        |  |             | 43,975  |      |  |   | 53,648  | 
|Accounts and other receivables                    |  |             | 106,334 |      |  |   | 136,573 | 
|Income taxes receivable                           |  |             | 458     |      |  |   | 2,153   | 
|Future income taxes                               |  |             | 4,786   |      |  |   | 3,324   | 
|Prepaid expenses                                  |  |             | 1,889   |      |  |   | 1,587   | 
|                                                  |  |             |         |      |  |   |         | 
|Total current assets                              |  |             | 236,503 |      |  |   | 237,927 | 
|Goodwill                                          |  |             | 298,550 |      |  |   | 281,712 | 
|Other intangible assets                           |  |             | 42,673  |      |  |   | 44,164  | 
|Property and equipment                            |  |             | 23,894  |      |  |   | 21,298  | 
|Future income taxes                               |  |             | 5,600   |      |  |   | 3,715   | 
|Other assets                                      |  |             | 6,986   |      |  |   | 8,060   | 
|                                                  |  |             |         |      |  |   |         | 
|Total assets                                      |  | $           | 614,206 |      |  | $ | 596,876 | 
|                                                  |  |             |         |      |  |   |         | 
|LIABILITIES AND SHAREHOLDERS
    EQUITY          |  |             |         |      |  |   |         | 
|Current liabilities:                              |  |             |         |      |  |   |         | 
|Accounts payable and accrued liabilities          |  | $           | 156,175 |      |  | $ | 187,034 | 
|Contingent consideration payable                  |  |             | 450     |      |  |   | 8,423   | 
|Income taxes payable                              |  |             | 959     |      |  |   | 1,198   | 
|Future income taxes                               |  |             | 762     |      |  |   | 1,164   | 
|Current portion long-term debt and capital leases |  |             | 3,582   |      |  |   | 3,029   | 
|                                                  |  |             |         |      |  |   |         | 
|Total current liabilities                         |  |             | 161,928 |      |  |   | 200,848 | 
|Long-term debt and capital leases                 |  |             | 84,152  |      |  |   | 69,009  | 
|Subordinated convertible debentures               |  |             | 35,000  |      |  |   | 35,000  | 
|Future income taxes                               |  |             | 9,658   |      |  |   | 7,745   | 
|                                                  |  |             |         |      |  |   |         | 
|Total liabilities                                 |  |             | 290,738 |      |  |   | 312,602 | 
|                                                  |  |             |         |      |  |   |         | 
|Commitments and Contingencies                     |  |             |         |      |  |   |         | 
|Shareholders equity                              |  |             |         |      |  |   |         | 
|Share capital                                     |  |             | 247,110 |      |  |   | 235,197 | 
|Issuable shares                                   |  |             | 50      |      |  |   | 13,743  | 
|Contributed surplus                               |  |             | 3,979   |      |  |   | 1,234   | 
|Cumulative translation account                    |  |             | 19,133  |      |  |   | 2,185   | 
|Retained earnings                                 |  |             | 53,196  |      |  |   | 31,915  | 
|                                                  |  |             |         |      |  |   |         | 
|Total shareholders equity                        |  |             | 323,468 |      |  |   | 284,274 | 
|                                                  |  |             |         |      |  |   |         | 
|Total liabilities and shareholders
    equity    |  | $           | 614,206 |      |  | $ | 596,876 | 
|                                                  |  |             |         |      |  |   |         | 

(the accompanying notes form an integral part
of the interim financial statements)





|                                 |                               
|-------------------------------- | ------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    3



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##### 



Hub International Limited

Consolidated Statements of Earnings


For the three months and the nine months ended
September 30, 2003 and 2002

(in thousands of U.S. dollars, except per
share amounts)


(Unaudited)


|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |         |  
|---------------------------------------------- | -------------------------------------------------------------- | ------------- | ------ | ----------------- | - | ---- | ------ | ------ | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                               |                                                                |               |        |                  
|                                               |                                                                | Third quarter |        | First nine months
|                                               |                                                                |               |        |                  
|                                               |                                                                | 2003          |        | 2002              |   | 2003 |        | 2002  
|                                               |                                                                |               |        |                   |   |      |        |       
|Revenue                                        |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               | Commission income                                              |               | $      | 60,772            |   |      | $      | 46,872 |   |   | $       | 184,755 |   |   | $       | 140,498 |  
|                                               | Contingent commissions and volume overrides                    |               |        | 1,884             |   |      |        | 767    |   |   |         | 17,150  |   |   |         | 10,198  |  
|                                               | Other                                                          |               |        | 2,015             |   |      |        | 1,913  |   |   |         | 5,798   |   |   |         | 5,636   |  
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               |                                                                |               | 64,671 |                   |   |      | 49,552 |        |   |   | 207,703 |         |   |   | 156,332 |        
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|Expenses                                       |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               | Compensation                                                   |               |        | 36,855            |   |      |        | 26,612 |   |   |         | 113,744 |   |   |         | 84,126  |  
|                                               | Selling, occupancy and administration                          |               |        | 13,974            |   |      |        | 11,103 |   |   |         | 40,888  |   |   |         | 33,357  |  
|                                               | Depreciation                                                   |               |        | 1,551             |   |      |        | 1,444  |   |   |         | 4,462   |   |   |         | 4,078   |  
|                                               | Interest expense                                               |               |        | 1,269             |   |      |        | 1,110  |   |   |         | 4,152   |   |   |         | 6,208   |  
|                                               | Intangible asset amortization                                  |               |        | 840               |   |      |        | 389    |   |   |         | 2,397   |   |   |         | 1,147   |  
|                                               | (Gain) on disposal of property, equipment and
    other assets |               |        | (290              | ) |      |        | (6     | ) |   |         | (281    | ) |   |         | (2,578  | )
|                                               | Loss/(gain) on put option liability                            |               |        | 73                |   |      |        | (270   | ) |   |         | (167    | ) |   |         | (948    | )
|                                               | Non-cash stock based compensation                              |               |        | 1,355             |   |      |        | 583    |   |   |         | 3,575   |   |   |         | 583     |  
|                                               | Proceeds from life insurance                                   |               |        | (1,000            | ) |      |        |       |   |   |         | (1,000  | ) |   |         |        |  
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               |                                                                |               | 54,627 |                   |   |      | 40,965 |        |   |   | 167,770 |         |   |   | 125,973 |        
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|Net earnings before income taxes               |                                                                |               | 10,044 |                   |   |      | 8,587  |        |   |   | 39,933  |         |   |   | 30,359  |        
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|Provision for income tax expense
    (benefit) |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               | Current                                                        |               |        | 6,074             |   |      |        | 4,831  |   |   |         | 15,339  |   |   |         | 10,845  |  
|                                               | Future                                                         |               |        | (2,850            | ) |      |        | (1,666 | ) |   |         | (1,239  | ) |   |         | (1,559  | )
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               |                                                                |               | 3,224  |                   |   |      | 3,165  |        |   |   | 14,100  |         |   |   | 9,286   |        
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|Net earnings                                   |                                                                | $             | 6,820  |                   |   | $    | 5,422  |        |   | $ | 25,833  |         |   | $ | 21,073  |        
|                                               |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|Earnings per share                             |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               | Basic                                                          |               | $      | 0.23              |   |      | $      | 0.21   |   |   | $       | 0.88    |   |   | $       | 0.96    |  
|                                               | Diluted                                                        |               | $      | 0.22              |   |      | $      | 0.19   |   |   | $       | 0.81    |   |   | $       | 0.79    |  
|Weighted average shares outstanding            |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               |  Basic (000s)                                                |               |        | 29,327            |   |      |        | 26,416 |   |   |         | 29,326  |   |   |         | 22,060  |  
|Weighted average shares outstanding            |                                                                |               |        |                   |   |      |        |        |   |   |         |         |   |   |         |        
|                                               |  Diluted (000s)                                              |               |        | 33,830            |   |      |        | 31,696 |   |   |         | 33,927  |   |   |         | 29,139  |  

(the accompanying notes form an integral part
of the interim financial statements)





|                              |                                 
|----------------------------- | --------------------------------
|4   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



Hub International Limited

Consolidated Statements of Retained
Earnings


For the nine months ended September 30,
2003 and 2002

(in thousands of U.S. dollars)


(Unaudited)


|                                            |  |      |        |      |  |   |        |  
|------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                            |  | 2003 |        | 2002
|                                            |  |      |        |     
|Retained earnings  Beginning of
    period |  | $    | 31,915 |      |  | $ | 6,995  |  
|Net earnings                                |  |      | 25,833 |      |  |   | 21,073 |  
|Dividends                                   |  |      | (4,552 | )    |  |   | (3,213 | )
|                                            |  |      |        |      |  |   |        |  
|Retained earnings  End of
    period       |  | $    | 53,196 |      |  | $ | 24,855 |  
|                                            |  |      |        |      |  |   |        |  

(the accompanying notes form an integral part
of the interim financial statements)





|                                 |                               
|-------------------------------- | ------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    5



---



##### 



Hub International Limited

Consolidated Statements of Cash
Flows


For the three months and nine months ended
September 30, 2003 and 2002

(in thousands of U.S. dollars)


(Unaudited)


|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |         |  
|---------------------------------------------------------------- | -------------------------------------------------------------- | ------------- | ------ | ----------------- | - | ---- | ------ | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                 |                                                                |               |        |                  
|                                                                 |                                                                | Third quarter |        | First nine months
|                                                                 |                                                                |               |        |                  
|                                                                 |                                                                |               |        |                  
|                                                                 |                                                                |               |        |                  
|                                                                 |                                                                | 2003          |        | 2002              |   | 2003 |        | 2002   
|                                                                 |                                                                |               |        |                   |   |      |        |        
|OPERATING ACTIVITIES                                             |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Net earnings                                                     |                                                                | $             | 6,820  |                   |   | $    | 5,422  |         |   | $ | 25,833  |         |   | $ | 21,073  |        
|Items not affecting working capital                              |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|                                                                 | Amortization and depreciation                                  |               |        | 2,391             |   |      |        | 1,833   |   |   |         | 6,859   |   |   |         | 5,225   |  
|                                                                 | (Gain) on disposal of property, equipment and
    other assets |               |        | (290              | ) |      |        | (6      | ) |   |         | (281    | ) |   |         | (2,578  | )
|                                                                 | Loss/(gain) on put option liability                            |               |        | 73                |   |      |        | (270    | ) |   |         | (167    | ) |   |         | (948    | )
|                                                                 | Non-cash stock based compensation                              |               |        | 1,355             |   |      |        | 583     |   |   |         | 3,575   |   |   |         | 583     |  
|                                                                 | Future income taxes                                            |               |        | (2,850            | ) |      |        | (1,666  | ) |   |         | (1,239  | ) |   |         | (1,559  | )
|Non-cash working capital items                                   |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|                                                                 | Trust cash                                                     |               |        | 106               |   |      |        | (639    | ) |   |         | 9,673   |   |   |         | 5,025   |  
|                                                                 | Accounts and other receivables                                 |               |        | 50,028            |   |      |        | 37,773  |   |   |         | 38,626  |   |   |         | 17,482  |  
|                                                                 | Prepaid expenses                                               |               |        | 283               |   |      |        | (650    | ) |   |         | (185    | ) |   |         | (348    | )
|                                                                 | Accounts payable and accrued liabilities                       |               |        | (44,340           | ) |      |        | (36,760 | ) |   |         | (38,463 | ) |   |         | (39,171 | )
|                                                                 | Other assets                                                   |               |        | 129               |   |      |        |        |   |   |         | (2,191  | ) |   |         |        |  
|                                                                 | Income taxes                                                   |               |        | 4,165             |   |      |        | 2,986   |   |   |         | 1,318   |   |   |         | 2,231   |  
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Net cash flows from operating activities                         |                                                                |               | 17,870 |                   |   |      | 8,606  |         |   |   | 43,358  |         |   |   | 7,015   |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|INVESTING ACTIVITIES                                             |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Property and equipment  purchases                               |                                                                |               | (1,547 | )                 |   |      | (1,155 | )       |   |   | (4,589  | )       |   |   | (2,798  | )      
|Property and equipment  proceeds on
    sale                    |                                                                |               | 17     |                   |   |      |       |         |   |   | 44      |         |   |   |        |        
|Proceeds from investment held for sale                           |                                                                |               |       |                   |   |      |       |         |   |   |        |         |   |   | 43,521  |        
|Purchase of subsidiaries, net of cash received                   |                                                                |               | 452    |                   |   |      | (3,245 | )       |   |   | (11,935 | )       |   |   | (4,553  | )      
|Sale of subsidiaries                                             |                                                                |               | 613    |                   |   |      | 18     |         |   |   | 1,064   |         |   |   | 2,029   |        
|Other assets                                                     |                                                                |               | 176    |                   |   |      | 103    |         |   |   | (539    | )       |   |   | 117     |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Net cash flows from (used for) investing
    activities          |                                                                |               | (289   | )                 |   |      | (4,279 | )       |   |   | (15,955 | )       |   |   | 38,316  |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|FINANCING ACTIVITIES                                             |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Bank debt                                                        |                                                                |               |       |                   |   |      |       |         |   |   |        |         |   |   | (55,000 | )      
|Long-term debt  advances                                        |                                                                |               | 250    |                   |   |      | 14,101 |         |   |   | 65,250  |         |   |   | 14,101  |        
|Long-term debt and capital leases 
    repayments               |                                                                |               | (688   | )                 |   |      | (4,503 | )       |   |   | (52,184 | )       |   |   | (46,609 | )      
|Subordinated convertible debenture 
    repayment               |                                                                |               |       |                   |   |      |       |         |   |   |        |         |   |   | (26,800 | )      
|Share capital  issued for cash, net of
    issue costs          |                                                                |               | (28    | )                 |   |      | 7      |         |   |   | (59     | )       |   |   | 88,098  |        
|Proceeds from sale of executive purchase plan
    shares         |                                                                |               | 222    |                   |   |      |       |         |   |   | 222     |         |   |   |        |        
|Dividends paid                                                   |                                                                |               | (1,514 | )                 |   |      | (1,263 | )       |   |   | (4,552  | )       |   |   | (3,213  | )      
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Net cash flows from (used for) financing
    activities          |                                                                |               | (1,758 | )                 |   |      | 8,342  |         |   |   | 8,677   |         |   |   | (29,423 | )      
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Effect of exchange rate changes on cash and
    cash equivalents |                                                                |               | 160    |                   |   |      |       |         |   |   | 2,339   |         |   |   |        |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Change in cash and cash equivalents                              |                                                                |               | 15,983 |                   |   |      | 12,669 |         |   |   | 38,419  |         |   |   | 15,908  |        
|Cash and cash equivalents 
    Beginning of period              |                                                                |               | 63,078 |                   |   |      | 30,218 |         |   |   | 40,642  |         |   |   | 26,979  |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        
|Cash and cash equivalents  End of
    period                    |                                                                | $             | 79,061 |                   |   | $    | 42,887 |         |   | $ | 79,061  |         |   | $ | 42,887  |        
|                                                                 |                                                                |               |        |                   |   |      |        |         |   |   |         |         |   |   |         |        

(the accompanying notes form an integral part
of the interim financial statements)





|                              |                                 
|----------------------------- | --------------------------------
|6   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



Hub International Limited

Notes to Interim Consolidated Financial
Statements


For the three months and nine months ended
September 30, 2003 and 2002 (unaudited)

(in thousands of U.S. dollars, except per
share amounts or as otherwise indicated)




1.  Nature of operations


Hub International Limited (the
Company) is an international insurance brokerage
that provides a variety of property and casualty, life and
health, employee benefits, investment and risk management
products and services. The Companys shares are listed on
both the Toronto Stock Exchange (TSX: HBG) and the New York
Stock Exchange (NYSE: HBG).


2.  Summary of significant
accounting policies

The interim consolidated financial statements do
not include all disclosures required by Canadian generally
accepted accounting principles (Canadian GAAP) for annual
financial statements and accordingly, should be read in
conjunction with the Companys consolidated financial
statements for the year ended December 31, 2002 as set out
on pages 39 to 68 of the Companys 2002 Annual Report on
Form 10-K. In the opinion of management, all adjustments
(consisting of items of a normal recurring nature) considered
necessary for a fair presentation of the accompanying financial
statements have been reflected therein. These interim
consolidated financial statements of the Company are expressed
in United States (U.S.) dollars and have been prepared in
accordance with Canadian GAAP using the same accounting
principles as were used for the Companys consolidated
financial statements for the year ended December 31, 2002,
except for a change in the presentation of executive share
purchase plan loans as described in note 7. The results of the
operations are not necessarily indicative of the operating
results for the fiscal year or any future period. These
principles differ in certain respects from United States
generally accepted accounting principles (U.S. GAAP) and, to the
extent that they affect the Company, the differences are
described in note 14 Reconciliation to U.S. GAAP.


3.  Recent acquisitions

During the third quarter of 2003, the Company
acquired one insurance brokerage for approximately $785. This
acquisition was accounted for under the purchase method. The
allocation of purchase price to the fair value of the assets
acquired was as follows: goodwill  $292, customer
relationships  $59, non-competition
covenants  $180, working capital  $254.


4.  Intangible assets

The changes in the carrying amount of goodwill
for the three months and nine months ended September 30,
2003 are as follows:


|                                                           |  |            |        |            |  |       |         |  |  |   |         | 
|---------------------------------------------------------- |  | ---------- | ------ | ---------- |  | ----- | ------- |  |  | - | ------- | 
|                                                           |  | Operations |        | Operations |  |      
|                                                           |  | in Canada  |        | in U.S.    |  | Total
|                                                           |  |            |        |            |  |      
|Balance as of December 31, 2002                            |  | $          | 75,401 |            |  | $     | 206,326 |  |  | $ | 281,727 | 
|Goodwill acquired, net of disposals, during the
    period |  |            | 38     |            |  |       | 2,783   |  |  |   | 2,821   | 
|Cumulative translation adjustment                          |  |            | 5,542  |            |  |       |        |  |  |   | 5,542   | 
|                                                           |  |            |        |            |  |       |         |  |  |   |         | 
|Balance as of March 31, 2003                               |  | $          | 80,981 |            |  | $     | 209,109 |  |  | $ | 290,090 | 
|Goodwill acquired, net of disposals, during the
    period |  |            | 440    |            |  |       | 792     |  |  |   | 1,232   | 
|Cumulative translation adjustment                          |  |            | 6,808  |            |  |       |        |  |  |   | 6,808   | 
|                                                           |  |            |        |            |  |       |         |  |  |   |         | 
|Balance as of June 30, 2003                                |  | $          | 88,229 |            |  | $     | 209,901 |  |  | $ | 298,130 | 
|Goodwill acquired, net of disposals, during the
    period |  |            | 20     |            |  |       | 81      |  |  |   | 101     | 
|Cumulative translation adjustment                          |  |            | 319    |            |  |       |        |  |  |   | 319     | 
|                                                           |  |            |        |            |  |       |         |  |  |   |         | 
|Balance as of September 30, 2003                           |  | $          | 88,568 |            |  | $     | 209,982 |  |  | $ | 298,550 | 
|                                                           |  |            |        |            |  |       |         |  |  |   |         | 





|                                 |                               
|-------------------------------- | ------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    7



---



##### 



As of September 30, 2003 and
December 31, 2002 the gross carrying amount and accumulated
amortization of intangible assets other than goodwill were as
follows:

|                                   |                           |                          |         |                         |  |       |        |          |  |              |         |         |  |  |         |         |  |   |       |       |  |  |         |         | 
|---------------------------------- | ------------------------- | ------------------------ | ------- | ----------------------- |  | ----- | ------ | -------- |  | ------------ | ------- | ------- |  |  | ------- | ------- |  | - | ----- | ----- |  |  | ------- | ------- | 
|                                   |                           |                          |         |                        
|                                   |                           | As of September 30, 2003 |         | As of December 31, 2002
|                                   |                           |                          |         |                        
|                                   |                           | Gross                    |         |                         |  | Gross |        |         
|                                   |                           | carrying                 |         | Accumulated             |  |       |        | carrying |  | Accumulated  |         |        
|                                   |                           | amount                   |         | amortization            |  | Total |        | amount   |  | amortization |         | Total  
|                                   |                           |                          |         |                         |  |       |        |          |  |              |         |        
|Definite life intangible assets:   |                           |                          |         |                         |  |       |        |          |  |              |         |         |  |  |         |         |  |   |       |       |  |  |         |        
|                                   | Customer relationships    |                          |         | $42,431                 |  |       |        | $4,645   |  |              |         | $37,786 |  |  |         | $41,762 |  |   | $     | 2,383 |  |  |         | $39,379 | 
|Indefinite life intangible assets: |                           |                          |         |                         |  |       |        |          |  |              |         |         |  |  |         |         |  |   |       |       |  |  |         |        
|                                   | Non-competition covenants |                          |         | 2,548                   |  |       |        | 248      |  |              |         | 2,300   |  |  |         | 2,298   |  |   |       | 100   |  |  |         | 2,198   | 
|                                   | Trademarks                |                          |         | 2,587                   |  |       |        |         |  |              |         | 2,587   |  |  |         | 2,587   |  |   |       |      |  |  |         | 2,587   | 
|                                   |                           |                          |         |                         |  |       |        |          |  |              |         |         |  |  |         |         |  |   |       |       |  |  |         |        
|Total                              |                           |                          | $47,566 |                         |  |       | $4,893 |          |  |              | $42,673 |         |  |  | $46,647 |         |  | $ | 2,483 |       |  |  | $44,164 |        
|                                   |                           |                          |         |                         |  |       |        |          |  |              |         |         |  |  |         |         |  |   |       |       |  |  |         |        

Additions for the nine months ended 2003 were as
follows:

|                                   |                           |      |     |     | 
|---------------------------------- | ------------------------- | ---- | --- | --- | 
|                                   |                           | 2003
|                                   |                           |     
|Definite life intangible assets:   |                           |      |     |    
|                                   | Customer relationships    |      | $   | 648 | 
|Indefinite life intangible assets: |                           |      |     |    
|                                   | Non-competition covenants |      |     | 247 | 
|                                   |                           |      |     |    
|Total                              |                           | $    | 895 |    
|                                   |                           |      |     |    

The Company is unable to estimate the useful life
of non-competition covenants and trademarks. These indefinite
life intangible assets will be reviewed at least annually for
impairment. Once a non-competition covenant is triggered,
following the employee leaving the Company, the Companys
policy is to amortize the related intangible asset over the
period of the remaining contractual obligation.

For the three months and nine months ended
September 30, 2003 and 2002, amortization was comprised of
the following:

|                          |  |               |     |               |  |      |     |      |  |   |       |  |  |   |       | 
|------------------------- |  | ------------- | --- | ------------- |  | ---- | --- | ---- |  | - | ----- |  |  | - | ----- | 
|                          |  |               |     |              
|                          |  | For the three |     | For the nine 
|                          |  | months ended  |     | months ended 
|                          |  | September 30, |     | September 30,
|                          |  |               |     |              
|                          |  | 2003          |     | 2002          |  | 2003 |     | 2002
|                          |  |               |     |               |  |      |     |     
|Customer relationships    |  | $             | 748 |               |  | $    | 377 |      |  | $ | 2,250 |  |  | $ | 1,114 | 
|Non-competition covenants |  |               | 92  |               |  |      | 12  |      |  |   | 147   |  |  |   | 33    | 
|                          |  |               |     |               |  |      |     |      |  |   |       |  |  |   |       | 
|Total                     |  | $             | 840 |               |  | $    | 389 |      |  | $ | 2,397 |  |  | $ | 1,147 | 
|                          |  |               |     |               |  |      |     |      |  |   |       |  |  |   |       | 

We estimate that our amortization charges for
2003 through 2007 for all acquisitions consummated to date will
be:

|                          |  |      |       |      |  |      |       |      |  |      |       |  |  |   |       |  |  |   |       | 
|------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- |  |  | - | ----- | 
|                          |  | 2003 |       | 2004 |  | 2005 |       | 2006 |  | 2007
|                          |  |      |       |      |  |      |       |      |  |     
|Year ended December 31,   |  |      |       |      |  |      |       |      |  |      |       |  |  |   |       |  |  |   |       | 
|Customer relationships    |  | $    | 2,994 |      |  | $    | 2,987 |      |  | $    | 2,987 |  |  | $ | 2,987 |  |  | $ | 2,987 | 
|Non-competition covenants |  |      | 158   |      |  |      | 26    |      |  |      | 7     |  |  |   | 3     |  |  |   | 2     | 
|                          |  |      |       |      |  |      |       |      |  |      |       |  |  |   |       |  |  |   |       | 
|Total                     |  | $    | 3,152 |      |  | $    | 3,013 |      |  | $    | 2,994 |  |  | $ | 2,990 |  |  | $ | 2,989 | 
|                          |  |      |       |      |  |      |       |      |  |      |       |  |  |   |       |  |  |   |       | 





|                              |                                 
|----------------------------- | --------------------------------
|8   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



5.   Debt

Long-term debt and capital leases


|                                                                                                           |  |               |        |   |              |   |        |  
|---------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | - | ------------ | - | ------ | -
|                                                                                                           |  | September 30, |        |   | December 31, |  
|                                                                                                           |  | 2003          |        |   | 2002         |  
|                                                                                                           |  |               |        |  
|Series A Senior Notes, with interest at
    5.71%(1)                                                       |  | $             | 10,000 |   |              | $ |       |  
|Series B Senior Notes, with interest at
    6.16%(1)                                                       |  |               | 55,000 |   |              |   |       |  
|Revolving U.S. Dollar LIBOR loan(2)                                                                        |  |               |       |   |              |   | 50,000 |  
|Put options(3)                                                                                             |  |               | 6,767  |   |              |   | 5,940  |  
|Term loan, interest only at 10%, due February
    2007(4)                                                  |  |               | 7,500  |   |              |   | 7,500  |  
|Term loan with interest at prime plus  3/4%,
    repayable at $26 monthly, due August 2005(5)              |  |               | 448    |   |              |   | 587    |  
|Term loan with interest at 9%, repayable at
    $46 monthly, due October 2005(5)                           |  |               | 833    |   |              |   | 1,133  |  
|Note payable with interest at 5.92%, repayable at
    $272 annually, due November 2005                     |  |               | 768    |   |              |   | 735    |  
|Term loan with interest at 8%, repayable at
    $18 monthly, due July 2010                                 |  |               | 1,147  |   |              |   | 1,238  |  
|Term loan, repayable $250 due November 2003, and
    $43 monthly beginning December 2003 due November 2006 |  |               | 1,800  |   |              |   |       |  
|Various other unsecured notes payable and debt                                                             |  |               | 2,767  |   |              |   | 3,912  |  
|Capital leases(5)                                                                                          |  |               | 704    |   |              |   | 993    |  
|                                                                                                           |  |               |        |   |              |   |        |  
|Long-term debt and capital leases                                                                          |  |               | 87,734 |   |              |   | 72,038 |  
|Less current portion                                                                                       |  |               | (3,582 | ) |              |   | (3,029 | )
|                                                                                                           |  |               |        |   |              |   |        |  
|                                                                                                           |  | $             | 84,152 |   |              | $ | 69,009 |  
|                                                                                                           |  |               |        |   |              |   |        |  

Future repayments of long-term debt and capital
leases are as follows:

|                                               |  |   |        | 
|---------------------------------------------- |  | - | ------ | 
|For the twelve months ending
    September 30, |  |   |        | 
|2004                                           |  | $ | 3,582  | 
|2005                                           |  |   | 2,312  | 
|2006                                           |  |   | 4,849  | 
|2007                                           |  |   | 8,623  | 
|2008                                           |  |   | 3,514  | 
|2009 and thereafter                            |  |   | 64,854 | 
|                                               |  |   |        | 
|                                               |  | $ | 87,734 | 
|                                               |  |   |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Senior Notes  In June 2003, the
    Company, completed a private placement of $65 million in
    principal amount of unsecured senior notes. The senior notes
    were issued in two series: Series A represents
    $10 million of 5.71% senior notes with interest due
    semi-annually, and principal due of $3,333 annually,
    June 15, 2008 through June 15, 2010 and Series B
    represents $55 million of 6.16% senior notes with interest due
    semi-annually, and principal due of $11,000 annually
    June 15, 2009 through June 15, 2013. The senior notes
    were sold on a private basis in the United States to
    institutional accredited investors. Net proceeds of the sale of
    the senior notes were used to pay down $50 million of the
    Companys revolving U.S. Dollar Libor Loan with the balance
    for general corporate purposes, which may include future
    acquisitions. The Company incurred approximately
    $0.7 million in fees and expenses related to the offering
    of these notes, which were capitalized and are being amortized
    to expense over the term of the notes. At September 30,
    2003, $65 million was outstanding under these senior notes.
    The Company is in compliance with all financial covenants
    governing these notes.

On July 16, 2003, the Company entered into
an interest rate swap agreement. The effect of the swap is to
convert the fixed rate interest payments of 5.71% and 6.16% on
$10 million and $55 million, respectively, of the
Senior Notes in order to ensure that the Company pays a market
related interest rate on a portion of its





|                                 |                               
|-------------------------------- | ------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    9



---



##### 



borrowings. The Company accounts for the swap
transaction using the synthetic instruments method under which
the net interest expense on the swap and associated debt is
reported in earnings as if it were a single, synthetic,
financial instrument. As at September 30, 2003, the Company
estimated the fair value of the swap to be $1.2 million,
which is not recognized in these financial statements.
Accordingly, $1.2 million is the estimated amount that the
Company would need to pay to terminate the swap as of
September 30, 2003.




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Revolving U.S. dollar LIBOR loan  This
    facility which expired on June 20, 2003, and was extended
    for thirty days, was renegotiated in July 2003. Under the new
    terms, the unsecured facility totals $15 million and is
    accessed at a floating rate of prime plus 1% or 112.5 basis
    points above LIBOR which was 1.12% and 1.42% at
    September 30, 2003 and December 31, 2002,
    respectively. The facility expires on July 16, 2004;
    however if the revolving period is not extended, the Company may
    convert the outstanding balance under the facility to a three
    year non-revolving term loan repayable at the end of three years
    with an interest rate of 137.5 basis points above LIBOR.
    Borrowings under this facility totaled $NIL and
    $50.0 million at September 30, 2003 and
    December 31, 2002, respectively.
|   
|(3) | Put Options  Long-term debt at
    September 30, 2003 and December 31, 2002, includes the
    estimated value of the financial liability of $6,767 and $5,940,
    respectively, relating to put options on 730,000 common shares,
    exercisable at a price of C$17.00 per share, issued to former
    owners of J.P. Flanagan Corporation who are officers and
    employees of the Company. The put options are exercisable as
    follows:                                                                                                                                                                                                                                                                                                                                                                                                                            

|              |  |         |     | 
|------------- |  | ------- | --- | 
|              |  | Shares 
|Exercise date |  | (000s)
|              |  |        
|May 31, 2006  |  |         | 365 | 
|May 31, 2007  |  |         | 73  | 
|May 31, 2011  |  |         | 292 | 
|              |  |         |     | 
|              |  |         | 730 | 
|              |  |         |     | 



| |                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company will not be required to settle the
    liabilities in cash if the common share price exceeds C$17.00 on
    each of the above mentioned exercise dates. Any put options not
    exercised on the exercise date immediately expire.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | This term loan is from an insurance carrier. The
    terms of the loan provide for an incentive arrangement whereby a
    credit can be earned that will reduce annual interest payments
    under the loan (based on target premiums placed with the
    carrier) and reduce the principal repayment due in February 2007
    (based on both target premiums placed with the carrier as well
    as the loss ratio on premiums placed with the carrier). Under
    this incentive arrangement both the annual interest payments as
    well as the principal payment can be reduced to zero. Credits
    were earned for 2002 which reduced interest payments to zero
    from $229. It is not yet determinable if a credit has been
    earned for 2003.
|   
|(5) | Certain property and equipment have been pledged
    as collateral in amounts not less than the outstanding balance
    of the loan at September 30, 2003 and December 31,
    2002, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        




Demand U.S. dollar base rate
loan

Borrowings under this $8.9 million facility
totaled $NIL at September 30, 2003 and December 31,
2002 and are accessed at the banks U.S. base rate plus 50
basis points which was 5.00% and 5.25% at September 30,
2003 and December 31, 2002, respectively. Payment is due on
demand.

Subordinated convertible debentures

In connection with the acquisition of Kaye Group
Inc. (Kaye) on June 28, 2001, the Company issued
$35 million aggregate principal amount, 8.5% convertible
subordinated debentures (the Fairfax notes) due June 28,
2007 to certain subsidiaries of Fairfax Financial Holdings
Limited (Fairfax). The Fairfax notes are convertible by the
holders at any time into the Companys common shares at
C$17.00 per share. Beginning June 28, 2006, the Company may
require conversion of the Fairfax notes into common shares at
C$17.00 per share if, at any time, the weighted





|                               |                                 
|------------------------------ | --------------------------------
|10   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



average closing price of the Companys
common shares on the TSX for twenty consecutive trading days
equals or exceeds C$19.00 per share. If converted, Fairfax would
have owned approximately 33% of the Companys outstanding
common shares as of September 30, 2003.


6.  Commitments and
contingencies

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In connection with the Companys executive
    share purchase plan, under certain circumstances the Company may
    be obligated to purchase loans for officers and employees from a
    Canadian chartered bank totaling $5,861 and $5,077 as of
    September 30, 2003 and December 31, 2002,
    respectively, to assist in purchasing common shares of the
    Company. As collateral, the employees have pledged 594,000 and
    602,000 common shares as of September 30, 2003 and
    December 31, 2002, respectively, which have a market value
    of $9,781 and $7,677 as of September 30, 2003 and
    December 31, 2002, respectively. Interest on the loans in
    the amount of $74 and $222 for the three months and nine months
    ended September 30, 2003 and $69 and $196 for the
    respective periods in 2002, was paid by the Company and is
    included in compensation expense.                                          
|   
|(b) | The Company anticipates that stock options will
    be granted in February 2004 in partial consideration of
    executive management profitability bonuses for 2003. Management
    has estimated the amount of these bonuses for 2003, and the fair
    value of stock options likely to be granted. In accordance with
    the Canadian Institute of Chartered Accountants (CICA)
    Accounting Standards Board Handbook Section 3870,
    Stock-Based Compensation and Other Stock-Based
    Payments, the fair value of these options is being
    recognized as an expense evenly over the period they are earned.
    The expense for these options for the three months and nine
    months ended September 30, 2003 was $264 and $994,
    respectively, and $NIL for the respective periods in 2002, and
    is included in non-cash stock based compensation with an
    offsetting credit to accounts payable and accrued liabilities.
|   
|(c) | Contingent consideration may be issued in
    connection with the 2001 acquisition of Flanagan as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|     |  |               |            |               |  |  |               | 
|---- |  | ------------- | ---------- | ------------- |  |  | ------------- | 
|     |  |               |            | Contingent   
|     |  | Contingent    |            | consideration
|     |  | consideration |            | target       
|Year |  | (000s)       |            | criteria     
|     |  |               |            |              
|2003 |  |               | 126 shares |               |  |  | Revenue       | 
|2003 |  |               | 75 shares  |               |  |  | Profitability | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The 2003 shares include 37,500 shares in each
    category that have been carried over from 2002. The former
    owners of Flanagan will be entitled to receive the 2002 shares
    if the 2003 contingent consideration targets are met or exceeded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | In connection with the acquisition of Hooper
    Hayes and Associates, Inc., in 2002 we issued 196,000 shares
    (the Retractable Shares) that are being held in
    escrow subject to release over a period of three years upon the
    satisfaction of certain performance targets. As of
    September 30, 2003 no shares have been released from escrow.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | In connection with other various acquisitions
    completed through September 30, 2003, the Company may be
    obligated to pay contingent consideration up to a maximum sum of
    approximately $2.0 million cash and $0.2 million in
    common shares based upon the acquired brokerages achieving
    certain targets. The contingent payments are payable on various
    dates through September 2006 according to the terms and
    conditions of each purchase agreement. Any additional
    consideration will be recorded as an adjustment to goodwill once
    the contingency is resolved. In connection with contingent
    consideration earned as at September 30, 2003, the
    financial statements reflect a liability to pay cash of $450 and
    to issue shares valued at approximately $50 as of
    September 30, 2003.



|    |                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | In the ordinary course of business, the Company
    and its subsidiaries are subject to various claims and lawsuits
    consisting primarily of alleged errors and omissions in
    connection with the placement of insurance. In the





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    11



---



##### 



| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | opinion of management, the ultimate resolution of
    all asserted and potential claims and lawsuits will not have a
    material adverse effect on the consolidated financial position
    or results of operations of the Company.

7.  Shareholders
equity

Share capital


At September 30, 2003 and December 31,
2002, there were an unlimited number of non-voting, preferred
shares authorized, issuable in series on such terms and
conditions as set by the Board of Directors, of which no shares
were issued. At September 30, 2003 and December 31,
2002, there were an unlimited number of common shares
authorized, of which 30,262,000 and 29,025,000 were issued and
outstanding as at September 30, 2003 and December 31,
2002, respectively.

|                                                            |  |               |        |   |        |   |         |  
|----------------------------------------------------------- |  | ------------- | ------ | - | ------ | - | ------- | -
|                                                            |  |              
|                                                            |  | Common shares
|                                                            |  |              
|                                                            |  | Outstanding   |        |   |       
|                                                            |  | (000s)       |        |   | Amount |  
|                                                            |  |               |        |  
|Balance, December 31, 2002                                  |  |               | 29,025 |   |        | $ | 235,197 |  
|Repurchases of executive share purchase plan
    shares     |  |               | (6     | ) |        |   | (53     | )
|Share issue costs, net of future tax asset                  |  |               |       |   |        |   | (58     | )
|Shares issued for contingent consideration                  |  |               | 1,242  |   |        |   | 13,992  |  
|Cancellation of shares                                      |  |               | (7     | ) |        |   | (91     | )
|Restricted share units released                             |  |               | 7      |   |        |   | 112     |  
|Stock options exercised                                     |  |               | 1      |   |        |   | 14      |  
|Reclassification of executive share purchase plan
    loans |  |               |       |   |        |   | (2,003  | )
|                                                            |  |               |        |   |        |   |         |  
|Balance, September 30, 2003                                 |  |               | 30,262 |   |        | $ | 247,110 |  
|                                                            |  |               |        |   |        |   |         |  

During the second quarter 2003, the Company
reclassified certain executive share purchase plan loans
previously included as accounts receivable as a deduction from
shareholders equity in accordance with the requirements of
Emerging Issues Committee Abstract 132 Share Purchase
Financing.

Cumulative translation account

|                                                                        |  |   |        |  
|----------------------------------------------------------------------- |  | - | ------ | -
|Balance, December 31, 2002                                              |  | $ | 2,185  |  
|Translation of self-sustaining foreign operations                       |  |   | 18,226 |  
|Translation of debt financing of self-sustaining
    foreign operations |  |   | (1,278 | )
|                                                                        |  |   |        |  
|Balance, September 30, 2003                                             |  | $ | 19,133 |  
|                                                                        |  |   |        |  

Contributed surplus

Contributed surplus at September 30, 2003
and December 31, 2002 of $3,979 and $1,234, respectively,
is primarily related to non-cash stock based compensation.

8.  Equity Incentive Plan

On February 28, 2003, the Company granted
options exercisable for 267,000 common shares at an exercise
price of $13.79 per share, the U.S. dollar equivalent of the
closing sales price of the Companys common shares on the
TSX on that date. The maximum option term is seven years, and
the options vest as to one-third per year over three years of
continuous employment.






|                               |                                 
|------------------------------ | --------------------------------
|12   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



A summary of the stock option activity and
related information for the nine months ended September 30,
2003 consists of the following:

|                            |  |         |       |                |                  |   |       | 
|--------------------------- |  | ------- | ----- | -------------- | ---------------- | - | ----- | 
|                            |  | Number  |       |                | Weighted-average
|                            |  | (000s) |       | exercise price
|                            |  |         |       |               
|Balance, December 31, 2002  |  |         | 1,270 |                |                  | $ | 15.67 | 
|Granted                     |  |         | 267   |                |                  | $ | 13.79 | 
|Forfeited                   |  |         | (37   | )              |                  | $ | 15.67 | 
|                            |  |         |       |                |                  |   |       | 
|Balance, September 30, 2003 |  |         | 1,500 |                |                  | $ | 15.34 | 
|                            |  |         |       |                |                  |   |       | 

The following table summarizes information about
the stock options outstanding at September 30, 2003:

|               |  |                     |       |                  |  |             |            |  |  |  |     | 
|-------------- |  | ------------------- | ----- | ---------------- |  | ----------- | ---------- |  |  |  | --- | 
|               |  |                     |       |                 
|               |  | Options outstanding |       |                 
|               |  |                     |       | Number of       
|               |  | Number              |       | Weighted-average |  | options    
|               |  | outstanding         |       | remaining        |  | exercisable
|               |  | (000s)             |       | contractual life |  | (000s)    
|Exercise price |  |                     |       |                  |  |            
|$15.67         |  |                     | 1,233 |                  |  |             | 5.69 years |  |  |  | 418 | 
|$13.79         |  |                     | 267   |                  |  |             | 6.41 years |  |  |  | 6   | 
|               |  |                     |       |                  |  |             |            |  |  |  |     | 
|               |  |                     | 1,500 |                  |  |             | 5.82 years |  |  |  | 424 | 
|               |  |                     |       |                  |  |             |            |  |  |  |     | 

The aggregate fair value of options granted on
February 28, 2003 of $1,230 was estimated on the date of
grant using the Black-Scholes option pricing model with the
following assumptions: (i) dividend yield of 2.0%,
(ii) expected volatility range of 40.1%,
(iii) risk-free interest rate of 2.9% and
(iv) expected life of five years. The fair value of the
options granted is being recognized as an expense over the
vesting period. For the three months and nine months ended
September 30, 2003, non-cash stock based compensation
related to stock options of $852 and $2,865, respectively, and
$NIL for the respective periods in 2002, was expensed with
offsetting credits to contributed surplus.

Shares derived from the options are held in
escrow and subject to transfer restrictions for the period of
five years from the date the options are granted, subject to
early release in certain circumstances.

On June 30, 2003, the Company awarded
605,000 restricted share units to employees of the Company. The
restricted share units are exercisable for common shares without
payment of cash consideration and vest over periods ranging from
68 months to 95 months. The Companys accounting
policy is to recognize the fair value of non-cash stock based
compensation as an expense over the period in which entitlement
to the compensation vests. For the three months and nine months
ended September 30, 2003, non-cash stock based compensation
related to restricted share units of $498 and $711,
respectively, was expensed with an offsetting credit to
contributed surplus.

Non-cash stock based compensation for the three
months and nine months ended September 30, 2003 and 2002 is
comprised of the following:

|                                   |                                                             |               |       |               |  |      |     |      |  |   |       |       |  |   |     |     | 
|---------------------------------- | ----------------------------------------------------------- | ------------- | ----- | ------------- |  | ---- | --- | ---- |  | - | ----- | ----- |  | - | --- | --- | 
|                                   |                                                             |               |       |              
|                                   |                                                             | For the three |       | For the nine 
|                                   |                                                             | months ended  |       | months ended 
|                                   |                                                             | September 30, |       | September 30,
|                                   |                                                             |               |       |              
|                                   |                                                             | 2003          |       | 2002          |  | 2003 |     | 2002
|                                   |                                                             |               |       |               |  |      |     |     
|Non-cash stock based compensation: |                                                             |               |       |               |  |      |     |      |  |   |       |       |  |   |     |    
|                                   | Stock options granted June 2002                             |               | $     | 483           |  |      | $   | 583  |  |   | $     | 1,546 |  |   | $   | 583 | 
|                                   | Stock options granted February 2003                         |               |       | 110           |  |      |     |     |  |   |       | 324   |  |   |     |    | 
|                                   | Stock based compensation to be granted for 2003
    bonuses |               |       | 264           |  |      |     |     |  |   |       | 994   |  |   |     |    | 
|                                   | Restricted share units                                      |               |       | 498           |  |      |     |     |  |   |       | 711   |  |   |     |    | 
|                                   |                                                             |               |       |               |  |      |     |      |  |   |       |       |  |   |     |    
|                                   |                                                             | $             | 1,355 |               |  | $    | 583 |      |  | $ | 3,575 |       |  | $ | 583 |    
|                                   |                                                             |               |       |               |  |      |     |      |  |   |       |       |  |   |     |    





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    13



---



##### 



9.  Earnings per share

Basic earnings per share, excluding the dilutive
effect of common share equivalents, is calculated by dividing
net earnings by the weighted average number of common shares
outstanding for the period. Diluted earnings per share is
calculated using the treasury stock method and includes the
effects of all potentially dilutive securities. Certain stock
options under the equity incentive plan in which the average
market price exceeds the exercise price of the Companys
common shares for the period that the options were outstanding
were dilutive for the three months and nine months ended
September 30, 2003 and were included in the calculation of
diluted earnings per share. Earnings per common share have been
calculated as follows:


|                                                                |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |       | 
|--------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------- | ------ | ------------- |  | ---- | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- | 
|                                                                |                                                                              |               |        |              
|                                                                |                                                                              | For the three |        | For the nine 
|                                                                |                                                                              | months ended  |        | months ended 
|                                                                |                                                                              | September 30, |        | September 30,
|                                                                |                                                                              |               |        |              
|                                                                |                                                                              | 2003          |        | 2002          |  | 2003 |        | 2002 
|                                                                |                                                                              |               |        |               |  |      |        |      
|Net earnings (numerator)                                        |                                                                              | $             | 6,820  |               |  | $    | 5,422  |       |  | $ | 25,833 |       |  | $ | 21,073 |      
|Effect of dilutive securities:                                  |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|                                                                | Interest on 8.5% subordinated convertible
    debentures (net of income tax) |               |        | 471           |  |      |        | 460   |  |   |        | 1,414 |  |   |        | 2,063 | 
|Cash in lieu of dividends on restricted share
    units         |                                                                              |               | 36     |               |  |      |       |       |  |   | 76     |       |  |   |       |      
|                                                                |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|Net earnings plus assumed conversions (numerator)               |                                                                              | $             | 7,327  |               |  | $    | 5,882  |       |  | $ | 27,323 |       |  | $ | 23,136 |      
|                                                                |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|Weighted average shares outstanding 
    basic (denominator)   |                                                                              |               | 29,327 |               |  |      | 26,416 |       |  |   | 29,326 |       |  |   | 22,060 |      
|Effect of dilutive securities:                                  |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|                                                                | Put options                                                                  |               |        | 730           |  |      |        | 2,153 |  |   |        | 730   |  |   |        | 2,153 | 
|                                                                | Restricted share units                                                       |               |        | 603           |  |      |        |      |  |   |        | 402   |  |   |        |      | 
|                                                                | Stock options                                                                |               |        | 188           |  |      |        |      |  |   |        | 63    |  |   |        |      | 
|                                                                | Retractable shares                                                           |               |        | 196           |  |      |        |      |  |   |        | 196   |  |   |        |      | 
|                                                                | Issuable shares                                                              |               |        | 3             |  |      |        |      |  |   |        |      |  |   |        |      | 
|                                                                | 8.5% subordinated convertible debentures                                     |               |        | 2,783         |  |      |        | 3,127 |  |   |        | 3,210 |  |   |        | 4,926 | 
|                                                                |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|Weighted average shares outstanding 
    Diluted (denominator) |                                                                              |               | 33,830 |               |  |      | 31,696 |       |  |   | 33,927 |       |  |   | 29,139 |      
|                                                                |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|Earnings per common share:                                      |                                                                              |               |        |               |  |      |        |       |  |   |        |       |  |   |        |      
|                                                                | Basic                                                                        |               | $      | 0.23          |  |      | $      | 0.21  |  |   | $      | 0.88  |  |   | $      | 0.96  | 
|                                                                | Diluted                                                                      |               | $      | 0.22          |  |      | $      | 0.19  |  |   | $      | 0.81  |  |   | $      | 0.79  | 

10. Income taxes

Income taxes in the third quarter of 2003 and
2002 amounted to $3.2 million, respectively, resulting in
an effective tax rate of 32% and 37% in 2003 and 2002,
respectively. The decrease in our effective tax rate was
primarily the result of non-taxable proceeds from life insurance
on a former executive of a U.S. subsidiary.


11. Interest and income taxes
paid

Interest and income taxes paid for the three
months and nine months ending September 30, 2003 and 2002
were:


|                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |       | 
|----------------- |  | ------------- | ----- | ------------- |  | ---- | ----- | ---- |  | - | ------ |  |  | - | ----- | 
|                  |  |               |       |              
|                  |  | For the three |       | For the nine 
|                  |  | months ended  |       | months ended 
|                  |  | September 30, |       | September 30,
|                  |  |               |       |              
|                  |  | 2003          |       | 2002          |  | 2003 |       | 2002
|                  |  |               |       |               |  |      |       |     
|Interest paid     |  | $             | 206   |               |  | $    | 527   |      |  | $ | 1,261  |  |  | $ | 5,902 | 
|Income taxes paid |  | $             | 2,257 |               |  | $    | 1,825 |      |  | $ | 14,029 |  |  | $ | 8,729 | 





|                               |                                 
|------------------------------ | --------------------------------
|14   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



12. Segmented information

The Company is an international insurance
brokerage, which provides a variety of property, casualty, life
and health, employee benefits, investment and risk management
products and services. In addition to its Corporate Operations,
the Company has identified two operating segments within its
insurance brokerage business: Canadian Operations and U.S.
Operations. Corporate Operations consist primarily of investment
income, unallocated administrative costs, interest expense and
the income tax expense or benefit which is not allocated to the
Companys operating segments. The elimination of
intra-segment revenue relates to intra-company interest charges,
management fees and dividends.


Geographic revenue is determined based upon the
functional currency of the various subsidiaries. Financial
information by operating and geographic segment is as follows:

|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|------------------------------------ |  | ---------------------------------------- | ------ | ---- | ---- | - | ------ | ------------ |  | - | ------ | - |  | ---- | ------ | - | ------------ | - | ------ | - |  | - | ------ | -
|                                     |  |                                         
|                                     |  | For the three months ended September 30,
|                                     |  |                                         
|                                     |  |                                          |        |     
|                                     |  | 2003                                     |        | 2002
|                                     |  |                                          |        |     
|                                     |  | Canada                                   |        |      | U.S. |   |        | Consolidated |  |   | Canada |   |  | U.S. |        |   | Consolidated |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |  
|Revenue                              |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Brokerage                            |  | $                                        | 26,731 |      |      | $ | 38,098 |              |  | $ | 64,829 |   |  | $    | 21,264 |   |              | $ | 28,330 |   |  | $ | 49,594 |  
|Corporate                            |  |                                          | 4,868  |      |      |   | 368    |              |  |   | 5,236  |   |  |      | 4,336  |   |              |   | 372    |   |  |   | 4,708  |  
|Elimination of intra-segment revenue |  |                                          | (4,908 | )    |      |   | (486   | )            |  |   | (5,394 | ) |  |      | (4,345 | ) |              |   | (405   | ) |  |   | (4,750 | )
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|                                     |  | $                                        | 26,691 |      |      | $ | 37,980 |              |  | $ | 64,671 |   |  | $    | 21,255 |   |              | $ | 28,297 |   |  | $ | 49,552 |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Net earnings before income taxes     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Brokerage                            |  | $                                        | 4,493  |      |      | $ | 7,781  |              |  | $ | 12,274 |   |  | $    | 2,875  |   |              | $ | 5,032  |   |  | $ | 7,907  |  
|Corporate                            |  |                                          | 1,338  |      |      |   | (3,568 | )            |  |   | (2,230 | ) |  |      | 3,034  |   |              |   | (2,354 | ) |  |   | 680    |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|                                     |  | $                                        | 5,831  |      |      | $ | 4,213  |              |  | $ | 10,044 |   |  | $    | 5,909  |   |              | $ | 2,678  |   |  | $ | 8,587  |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Income taxes  current               |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Brokerage                            |  | $                                        | 1,638  |      |      | $ | 5,491  |              |  | $ | 7,129  |   |  | $    | 1,203  |   |              | $ | 3,453  |   |  | $ | 4,656  |  
|Corporate                            |  |                                          | 177    |      |      |   | (1,232 | )            |  | $ | (1,055 | ) |  |      | 372    |   |              |   | (197   | ) |  |   | 175    |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|                                     |  | $                                        | 1,815  |      |      | $ | 4,259  |              |  | $ | 6,074  |   |  | $    | 1,575  |   |              | $ | 3,256  |   |  | $ | 4,831  |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Income taxes  future                |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Brokerage                            |  | $                                        | (6     | )    |      | $ | (2,693 | )            |  | $ | (2,699 | ) |  | $    | (212   | ) |              | $ | (1,741 | ) |  | $ | (1,953 | )
|Corporate                            |  |                                          | (150   | )    |      |   | (1     | )            |  |   | (151   | ) |  |      | 437    |   |              |   | (150   | ) |  |   | 287    |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|                                     |  | $                                        | (156   | )    |      | $ | (2,694 | )            |  | $ | (2,850 | ) |  | $    | 225    |   |              | $ | (1,891 | ) |  | $ | (1,666 | )
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Net earnings                         |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Brokerage                            |  | $                                        | 2,861  |      |      | $ | 4,983  |              |  | $ | 7,844  |   |  | $    | 1,884  |   |              | $ | 3,320  |   |  | $ | 5,204  |  
|Corporate                            |  |                                          | 1,311  |      |      |   | (2,335 | )            |  |   | (1,024 | ) |  |      | 2,225  |   |              |   | (2,007 | ) |  |   | 218    |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|                                     |  | $                                        | 4,172  |      |      | $ | 2,648  |              |  | $ | 6,820  |   |  | $    | 4,109  |   |              | $ | 1,313  |   |  | $ | 5,422  |  
|                                     |  |                                          |        |      |      |   |        |              |  |   |        |   |  |      |        |   |              |   |        |   |  |   |        |  
|Amortization of intangible assets    |  | $                                        | 21     |      |      | $ | 819    |              |  | $ | 840    |   |  | $    | 12     |   |              | $ | 377    |   |  | $ | 389    |  
|Additions to property and equipment  |  | $                                        | 655    |      |      | $ | 2,701  |              |  | $ | 3,356  |   |  | $    | 366    |   |              | $ | 764    |   |  | $ | 1,130  |  
|Depreciation                         |  | $                                        | 578    |      |      | $ | 973    |              |  | $ | 1,551  |   |  | $    | 478    |   |              | $ | 966    |   |  | $ | 1,444  |  
|Interest income                      |  | $                                        | 268    |      |      | $ | 156    |              |  | $ | 424    |   |  | $    | 210    |   |              | $ | 283    |   |  | $ | 493    |  
|Interest expense                     |  | $                                        | 976    |      |      | $ | 293    |              |  | $ | 1,269  |   |  | $    | 886    |   |              | $ | 224    |   |  | $ | 1,110  |  





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    15



---



##### 



|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|------------------------------------ |  | --------------------------------------- | ------- | ---- | ---- | - | ------- | ------------ |  | - | ------- | - |  | ---- | ------- | - | ------------ | - | ------- | - |  | - | ------- | -
|                                     |  |                                        
|                                     |  | For the nine months ended September 30,
|                                     |  |                                        
|                                     |  |                                         |         |     
|                                     |  | 2003                                    |         | 2002
|                                     |  |                                         |         |     
|                                     |  | Canada                                  |         |      | U.S. |   |         | Consolidated |  |   | Canada  |   |  | U.S. |         |   | Consolidated |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |  
|Revenue                              |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Brokerage                            |  | $                                       | 79,836  |      |      | $ | 128,118 |              |  | $ | 207,954 |   |  | $    | 64,291  |   |              | $ | 92,038  |   |  | $ | 156,329 |  
|Corporate                            |  |                                         | 15,409  |      |      |   | 1,380   |              |  |   | 16,789  |   |  |      | 14,345  |   |              |   | 49,665  |   |  |   | 64,010  |  
|Elimination of intra-segment revenue |  |                                         | (15,473 | )    |      |   | (1,567  | )            |  |   | (17,040 | ) |  |      | (14,300 | ) |              |   | (49,707 | ) |  |   | (64,007 | )
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|                                     |  | $                                       | 79,772  |      |      | $ | 127,931 |              |  | $ | 207,703 |   |  | $    | 64,336  |   |              | $ | 91,996  |   |  | $ | 156,332 |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Net earnings before income taxes     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Brokerage                            |  | $                                       | 12,098  |      |      | $ | 31,976  |              |  | $ | 44,074  |   |  | $    | 8,776   |   |              | $ | 24,098  |   |  | $ | 32,874  |  
|Corporate                            |  |                                         | 5,662   |      |      |   | (9,803  | )            |  |   | (4,141  | ) |  |      | 7,355   |   |              |   | (9,870  | ) |  |   | (2,515  | )
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|                                     |  | $                                       | 17,760  |      |      | $ | 22,173  |              |  | $ | 39,933  |   |  | $    | 16,131  |   |              | $ | 14,228  |   |  | $ | 30,359  |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Income taxes  current               |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Brokerage                            |  | $                                       | 4,690   |      |      | $ | 13,609  |              |  | $ | 18,299  |   |  | $    | 3,665   |   |              | $ | 9,651   |   |  | $ | 13,316  |  
|Corporate                            |  |                                         | 559     |      |      |   | (3,519  | )            |  |   | (2,960  | ) |  |      | 625     |   |              |   | (3,096  | ) |  |   | (2,471  | )
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|                                     |  | $                                       | 5,249   |      |      | $ | 10,090  |              |  | $ | 15,339  |   |  | $    | 4,290   |   |              | $ | 6,555   |   |  | $ | 10,845  |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Income taxes  future                |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Brokerage                            |  | $                                       | (209    | )    |      | $ | (1,217  | )            |  | $ | (1,426  | ) |  | $    | (309    | ) |              | $ | (1,098  | ) |  | $ | (1,407  | )
|Corporate                            |  |                                         | 61      |      |      |   | 126     |              |  |   | 187     |   |  |      | (2      | ) |              |   | (150    | ) |  |   | (152    | )
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|                                     |  | $                                       | (148    | )    |      | $ | (1,091  | )            |  | $ | (1,239  | ) |  | $    | (311    | ) |              | $ | (1,248  | ) |  | $ | (1,559  | )
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Net earnings                         |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Brokerage                            |  | $                                       | 7,617   |      |      | $ | 19,584  |              |  | $ | 27,201  |   |  | $    | 5,420   |   |              | $ | 15,545  |   |  | $ | 20,965  |  
|Corporate                            |  |                                         | 5,042   |      |      |   | (6,410  | )            |  |   | (1,368  | ) |  |      | 6,732   |   |              |   | (6,624  | ) |  |   | 108     |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|                                     |  | $                                       | 12,659  |      |      | $ | 13,174  |              |  | $ | 25,833  |   |  | $    | 12,152  |   |              | $ | 8,921   |   |  | $ | 21,073  |  
|                                     |  |                                         |         |      |      |   |         |              |  |   |         |   |  |      |         |   |              |   |         |   |  |   |         |  
|Amortization of intangible assets    |  | $                                       | 49      |      |      | $ | 2,348   |              |  | $ | 2,397   |   |  | $    | 22      |   |              | $ | 1,125   |   |  | $ | 1,147   |  
|Additions to property and equipment  |  | $                                       | 2,265   |      |      | $ | 3,907   |              |  | $ | 6,172   |   |  | $    | 1,522   |   |              | $ | 1,302   |   |  | $ | 2,824   |  
|Depreciation                         |  | $                                       | 1,607   |      |      | $ | 2,855   |              |  | $ | 4,462   |   |  | $    | 1,344   |   |              | $ | 2,734   |   |  | $ | 4,078   |  
|Interest income                      |  | $                                       | 632     |      |      | $ | 571     |              |  | $ | 1,203   |   |  | $    | 503     |   |              | $ | 806     |   |  | $ | 1,309   |  
|Interest expense                     |  | $                                       | 3,250   |      |      | $ | 902     |              |  | $ | 4,152   |   |  | $    | 5,423   |   |              | $ | 785     |   |  | $ | 6,208   |  

|                    |  |                                                |         |      |      |   |         |              |  |   |         |  |  |      |         |  |              |   |         |  |  |   |         | 
|------------------- |  | ---------------------------------------------- | ------- | ---- | ---- | - | ------- | ------------ |  | - | ------- |  |  | ---- | ------- |  | ------------ | - | ------- |  |  | - | ------- | 
|                    |  |                                               
|                    |  | As of September 30, 2003 and December 31, 2002
|                    |  |                                               
|                    |  |                                                |         |     
|                    |  | 2003                                           |         | 2002
|                    |  |                                                |         |     
|                    |  | Canada                                         |         |      | U.S. |   |         | Consolidated |  |   | Canada  |  |  | U.S. |         |  | Consolidated |  
|                    |  |                                                |         |      |      |   |         |              |  |   |         | 
|Identifiable assets |  |                                                |         |      |      |   |         |              |  |   |         |  |  |      |         |  |              |   |         |  |  |   |         | 
|Brokerage           |  | $                                              | 156,364 |      |      | $ | 385,436 |              |  | $ | 541,800 |  |  | $    | 132,142 |  |              | $ | 412,379 |  |  | $ | 544,521 | 
|Corporate           |  |                                                | 60,135  |      |      |   | 12,271  |              |  |   | 72,406  |  |  |      | 28,920  |  |              |   | 23,435  |  |  |   | 52,355  | 
|                    |  |                                                |         |      |      |   |         |              |  |   |         |  |  |      |         |  |              |   |         |  |  |   |         | 
|                    |  | $                                              | 216,499 |      |      | $ | 397,707 |              |  | $ | 614,206 |  |  | $    | 161,062 |  |              | $ | 435,814 |  |  | $ | 596,876 | 
|                    |  |                                                |         |      |      |   |         |              |  |   |         |  |  |      |         |  |              |   |         |  |  |   |         | 





|                               |                                 
|------------------------------ | --------------------------------
|16   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



13. Related party transactions

In the three months and nine months ended
September 30, 2003 and 2002, respectively, the Company had
transactions with and recorded revenue from the following
related parties:


|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 
|--------------------------------- |  | ------------- | ----- | ------------- |  | ---- | ----- | ---- |  | - | ------ |  |  | - | ------ | 
|                                  |  |               |       |              
|                                  |  | For the three |       | For the nine 
|                                  |  | months ended  |       | months ended 
|                                  |  | September 30, |       | September 30,
|                                  |  |               |       |              
|                                  |  | 2003          |       | 2002          |  | 2003 |       | 2002
|                                  |  |               |       |               |  |      |       |     
|Northbridge Financial Corporation |  | $             | 5,469 |               |  | $    | 3,404 |      |  | $ | 12,091 |  |  | $ | 8,600  | 
|Crum & Forster Holdings, Inc.     |  |               | 221   |               |  |      | 425   |      |  |   | 1,052  |  |  |   | 706    | 
|Fairfax Inc.                      |  |               | 1,665 |               |  |      | 1,595 |      |  |   | 5,928  |  |  |   | 3,989  | 
|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 
|                                  |  | $             | 7,355 |               |  | $    | 5,424 |      |  | $ | 19,071 |  |  | $ | 13,295 | 
|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 

The Company had accounts receivable and accounts
payable balances with the above related parties in the amounts
of $3,030 and $9,564, at September 30, 2003, respectively,
and $2,104 and $12,180, at December 31, 2002, respectively.
All revenue and related accounts receivable and accounts payable
are the result of transactions in the normal course of business.
The companies above are related through common ownership by
Fairfax, which owns approximately 26% of the Companys
common shares as of September 30, 2003.

As of September 30, 2003 and
December 31, 2002, long-term debt related to put options of
$6,767 and $5,940, respectively, and subordinated convertible
debentures of $35,000 at September 30, 2003 and
December 31, 2002, are due to related parties.

During the three months and nine months ended
September 30, 2003 and 2002, the Company incurred expenses
related to rental of premises from related parties in the amount
of $560, and $1,556, for 2003 and $473 and $1,273 for the
respective periods in 2002. At September 30, 2003 and
December 31, 2002 the Company also had receivables due from
related parties in the amount of $3,768 and $3,802,
respectively, of which the majority were loans to employees to
enable them to purchase the Companys common shares.

14. Reconciliation to U.S. GAAP

The consolidated financial statements have been
prepared in accordance with Canadian GAAP, which differs in
certain respects from U.S. GAAP.






|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    17



---



##### 



Net earnings and comprehensive
income

The table below presents the differences between
Canadian and U.S. GAAP affecting net earnings and comprehensive
income for the three months and nine months ended
September 30, 2003 and 2002:

|                                                                         |                                                                                                                 |               |       |               |   |      |       |        |   |   |        |        |   |   |        |      |  
|------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------- | ------------- | ----- | ------------- | - | ---- | ----- | ------ | - | - | ------ | ------ | - | - | ------ | ---- | -
|                                                                         |                                                                                                                 |               |       |              
|                                                                         |                                                                                                                 | For the three |       | For the nine 
|                                                                         |                                                                                                                 | months ended  |       | months ended 
|                                                                         |                                                                                                                 | September 30, |       | September 30,
|                                                                         |                                                                                                                 |               |       |              
|                                                                         |                                                                                                                 | 2003          |       | 2002          |   | 2003 |       | 2002  
|                                                                         |                                                                                                                 |               |       |               |   |      |       |       
|Net earnings for the period based on Canadian GAAP                       |                                                                                                                 | $             | 6,820 |               |   | $    | 5,422 |        |   | $ | 25,833 |        |   | $ | 21,073 |     
|Adjustment to investment held for sale (1)                               |                                                                                                                 |               |      |               |   |      |      |        |   |   |       |        |   |   | (2,236 | )   
|Cumulative effect of change in accounting policy
    for put options (3) |                                                                                                                 |               | 335   |               |   |      |      |        |   |   | 335    |        |   |   |       |     
|Adjustment to put option liability (3)                                   |                                                                                                                 |               | (65   | )             |   |      | (344  | )      |   |   | (340   | )      |   |   | (1,105 | )   
|                                                                         |                                                                                                                 |               |       |               |   |      |       |        |   |   |        |        |   |   |        |     
|Net earnings for the period based on U.S.
    GAAP (4)                   |                                                                                                                 |               | 7,090 |               |   |      | 5,078 |        |   |   | 25,828 |        |   |   | 17,732 |     
|Other comprehensive income: (5)                                          |                                                                                                                 |               |       |               |   |      |       |        |   |   |        |        |   |   |        |     
|                                                                         | Unrealized (loss) gain, net of tax of
    $NIL  Q3/03, $40  Q3/02, $22 
    Q3/03 YTD, $31  Q3/02 YTD       |               |       | (1            | ) |      |       | (64    | ) |   |        | (36    | ) |   |        | (50  | )
|                                                                         | Reclassification adjustment, net of tax of
    $NIL  Q3/03, $NIL  Q3/02, $49 
    Q3/03 YTD, $(85) Q3/02 YTD |               |       |              |   |      |       |       |   |   |        | (78    | ) |   |        | 138  |  
|                                                                         | Foreign currency translation adjustment                                                                         |               |       | 415           |   |      |       | (5,880 | ) |   |        | 16,948 |   |   |        | (584 | )
|                                                                         |                                                                                                                 |               |       |               |   |      |       |        |   |   |        |        |   |   |        |     
|Comprehensive income based on U.S. GAAP (6)                              |                                                                                                                 | $             | 7,504 |               |   | $    | (866  | )      |   | $ | 42,662 |        |   | $ | 17,236 |     
|                                                                         |                                                                                                                 |               |       |               |   |      |       |        |   |   |        |        |   |   |        |     
|Basic earnings per share based on U.S. GAAP                              |                                                                                                                 | $             | 0.24  |               |   | $    | 0.19  |        |   | $ | 0.88   |        |   | $ | 0.80   |     
|Diluted earnings per share based on U.S. GAAP                            |                                                                                                                 | $             | 0.22  |               |   | $    | 0.17  |        |   | $ | 0.81   |        |   | $ | 0.68   |     

Shareholders equity

The table below sets out the differences between
Canadian GAAP and U.S. GAAP that affect shareholders
equity at September 30, 2003 and December 31, 2002:

|                                                                         |                                                              |               |         |       |              |   |         |     |  
|------------------------------------------------------------------------ | ------------------------------------------------------------ | ------------- | ------- | ----- | ------------ | - | ------- | --- | -
|                                                                         |                                                              | September 30, |         |       | December 31, |  
|                                                                         |                                                              | 2003          |         | 2002 
|                                                                         |                                                              |               |         |      
|Shareholders equity based on Canadian GAAP                              |                                                              | $             | 323,468 |       |              | $ | 284,274 |    
|Adjustment to investment held for sale (1)                               |                                                              |               | (1,716  | )     |              |   | (1,716  | )  
|Accumulated other comprehensive income:                                  |                                                              |               |         |       |              |   |         |    
|                                                                         | Unrealized (loss), net of tax of $196 
    2003, $51  2002 |               |         | (197  | )            |   |         | (83 | )
|                                                                         | Cumulative translation account (2)                           |               |         | 2,570 |              |   |         | 496 |  
|Cumulative effect of change in accounting policy
    for put options (3) |                                                              |               | 4,442   |       |              |   |        |    
|Adjustment to put option liability (3)                                   |                                                              |               |        |       |              |   | (1,702  | )  
|Executive share purchase plan loans                                      |                                                              |               |        |       |              |   | (1,912  | )  
|                                                                         |                                                              |               |         |       |              |   |         |    
|Shareholders equity based on U.S.
    GAAP (4)                          |                                                              | $             | 328,567 |       |              | $ | 279,357 |    
|                                                                         |                                                              |               |         |       |              |   |         |    




Notes:



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Under Canadian GAAP, Old Lyme Insurance Company
    of Rhode Island Inc. and Old Lyme Insurance Company, Ltd.
    (collectively, Old Lyme) was recorded as an investment held for
    sale at its cost, which was equivalent to its fair value, of
    $40,938 on June 28, 2001. No further adjustments were made
    to the carrying value of the investment until Old Lyme was sold
    on May 30, 2002, when the Company recorded a gain of
    $2,613, equal to the difference between the sale proceeds (which
    were agreed to be its net asset value under U.S. GAAP as of
    December 31, 2001 plus interest at 4% per annum from
    December 31, 2001 until closing) and its carrying value.
    Interest on debt financing the purchase of Old Lyme was charged
    to income as it accrued.





|                               |                                 
|------------------------------ | --------------------------------
|18   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under U.S. GAAP, Old Lyme was recorded as an
    investment held for sale at its fair value of $40,938. Between
    acquisition and completion of the sale the carrying value of the
    investment was adjusted for increases in fair value due to
    changes in its U.S. GAAP net asset value and interest accretion.
    Such adjustments were reflected as changes in goodwill arising
    on the Kaye acquisition. Interest on debt financing the purchase
    of Old Lyme was debited to the carrying value of the investment
    and did not impact earnings. The difference between the carrying
    value of the investment as of the date of completion of the sale
    and the sale proceeds was reflected as an adjustment to goodwill
    arising on the Kaye acquisition and accordingly no gain or loss
    was recorded in income.
|
| | The impact of the above noted Canadian and U.S.
    GAAP differences on earnings were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                                                                                             |  |               |   |               |  |      |   |      |  |   |   |  |  |   |        |  
|-------------------------------------------------------------------------------------------- |  | ------------- | - | ------------- |  | ---- | - | ---- |  | - | - |  |  | - | ------ | -
|                                                                                             |  |               |   |              
|                                                                                             |  | For the three |   | For the nine 
|                                                                                             |  | months ended  |   | months ended 
|                                                                                             |  | September 30, |   | September 30,
|                                                                                             |  |               |   |              
|                                                                                             |  | 2003          |   | 2002          |  | 2003 |   | 2002
|                                                                                             |  |               |   |               |  |      |   |     
|Gain recognized under Canadian GAAP not recorded
    under U.S. GAAP                         |  | $             |  |               |  | $    |  |      |  | $ |  |  |  | $ | (2,613 | )
|Interest charged to earnings under Canadian GAAP
    not charged to earnings under U.S. GAAP |  |               |  |               |  |      |  |      |  |   |  |  |  |   | 377    |  
|                                                                                             |  |               |   |               |  |      |   |      |  |   |   |  |  |   |        |  
|                                                                                             |  | $             |  |               |  | $    |  |      |  | $ |  |  |  | $ | (2,236 | )
|                                                                                             |  |               |   |               |  |      |   |      |  |   |   |  |  |   |        |  



|    |                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Under U.S. GAAP, historical financial statements
    are translated using a different exchange rate, which: for
    assets and liabilities is the exchange rate at the balance sheet
    date; for the income statement is the average exchange rate for
    the period; and for the share capital accounts is the historical
    exchange rate.



| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The aggregate impact of these differences has
    been presented in the reconciliation of shareholders
    equity for Canadian to U.S. GAAP under the caption
    cumulative translation account.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Under Canadian GAAP, the fair value of the put
    options (determined using the Black-Scholes model) issued in
    connection with the Flanagan acquisition on May 31, 2001
    was allocated to equity instruments on the balance sheet. The
    balance of the purchase price was allocated to debt. Changes in
    the value of the put options in periods subsequent to the
    acquisition date are included in earnings. Under U.S. GAAP prior
    to July 1, 2003, the fair value of the share consideration and
    the attached put options was initially recorded in equity and
    the redemption value of the shares to which the put options are
    attached was reclassified as mezzanine equity outside of
    shareholders equity as a result of the put options granted
    on those shares to certain of the selling shareholders. Only
    July 1, 2003, we adopted Statement of Financial Accounting
    Standards (SFAS) No. 150, Accounting for Certain Financial
    Instruments with Characteristics of both Liabilities and Equity.
    This Statement requires that an issuer classify financial
    instruments meeting certain criteria as liabilities (or assets
    in some circumstances) rather than equity. As a result of the
    adoption of this new standard the Company changed its accounting
    policy with respect to the financial instruments issued in
    connection with the Flanagan acquisition. Effective July 1,
    2003, the Company remeasured the fair value of the put options
    (using the Black-Scholes model) and classified this amount as
    liability. Amounts previously classified as mezzanine equity
    were reclassified as shareholders equity. The difference
    between the estimated fair value of the put options as at
    July 1, 2003 and May 31, 2001 was reported as a
    cumulative adjustment to net earnings under U.S. GAAP.
    Comparative financial statements were not restated. Under U.S.
    GAAP, changes in the estimated fair value of the put options are
    included in earnings.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Also under U.S. GAAP, the fair value of the
    put options at the date of issuance was also recorded as a debit
    and credit to shareholders equity, representing an
    unearned compensation expense, as the put options require the
    selling shareholders to remain employed by the Company in order
    to be able to exercise the put options. Compensation expense is
    being recognized using the straight-line method over the period
    from the issue date to the exercise date.





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    19



---



##### 





|    |                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The condensed consolidated statements of earnings
    and cash flows for the three months and nine months ended
    September 30, 2003 and 2002 and the condensed consolidated
    balance sheets as at September 30, 2003 and
    December 31, 2002 under U.S. GAAP are as follows:

|                                                                 |  |               |        |               |  |      |        |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------------- |  | ------------- | ------ | ------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                 |  |               |        |              
|                                                                 |  | For the three |        | For the nine 
|                                                                 |  | months ended  |        | months ended 
|                                                                 |  | September 30, |        | September 30,
|                                                                 |  |               |        |              
|                                                                 |  | 2003          |        | 2002          |  | 2003 |        | 2002
|                                                                 |  |               |        |               |  |      |        |     
|Condensed consolidated statements of earnings:                   |  |               |        |               |  |      |        |      |  |   |         |   |  |   |         |  
|Revenue                                                          |  | $             | 64,671 |               |  | $    | 49,552 |      |  | $ | 207,703 |   |  | $ | 156,332 |  
|Net earnings before income taxes                                 |  | $             | 10,501 |               |  | $    | 8,139  |      |  | $ | 40,026  |   |  | $ | 26,898  |  
|Net earnings                                                     |  | $             | 7,089  |               |  | $    | 5,078  |      |  | $ | 25,828  |   |  | $ | 17,732  |  
|Condensed consolidated statements of cash flows:                 |  |               |        |               |  |      |        |      |  |   |         |   |  |   |         |  
|Cash provided by operating activities                            |  | $             | 17,870 |               |  | $    | 8,445  |      |  | $ | 43,358  |   |  | $ | 7,452   |  
|Cash provided by (used in) investing activities                  |  | $             | (289   | )             |  | $    | (4,954 | )    |  | $ | (15,955 | ) |  | $ | 37,693  |  
|Cash provided by (used in) financing activities                  |  | $             | (1,758 | )             |  | $    | 9,178  |      |  | $ | 8,677   |   |  | $ | (29,237 | )
|Effect of exchange rate changes on cash and cash
    equivalents |  | $             | 160    |               |  | $    |       |      |  | $ | 2,339   |   |  | $ |        |  

|                                       |  |               |         |      |              |   |         | 
|-------------------------------------- |  | ------------- | ------- | ---- | ------------ | - | ------- | 
|                                       |  | September 30, |         |      | December 31, |  
|                                       |  | 2003          |         | 2002
|                                       |  |               |         |     
|Condensed consolidated balance sheets: |  |               |         |      |              |   |         | 
|Total current assets                   |  | $             | 236,503 |      |              | $ | 235,416 | 
|Total assets                           |  | $             | 612,998 |      |              | $ | 593,337 | 
|Total current liabilities              |  | $             | 161,928 |      |              | $ | 200,848 | 
|Total liabilities                      |  | $             | 284,431 |      |              | $ | 306,268 | 
|Mezzanine equity                       |  | $             |        |      |              | $ | 7,712   | 
|Total shareholders equity             |  | $             | 328,567 |      |              | $ | 279,357 | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Under U.S. GAAP, comprehensive income is
    measured in accordance with SFAS No. 130, Reporting
    Comprehensive Income. This standard defines comprehensive
    income as all changes in equity other than those resulting from
    investments by owners and distributions to owners and includes
    the change in unrealized gains (losses) on debt and equity
    securities and foreign currency translation adjustments. Under
    Canadian GAAP unrealized gains and losses (arising from a
    temporary decline in value) equity securities are not recorded
    and foreign currency translation adjustments are presented as
    movements in the cumulative translation account. Certain
    disclosures required by SFAS 115, Accounting for Certain
    Investments in Debt and Equity Securities, have not been
    included as such disclosures related to the Companys
    investments in debt and equity securities are immaterial to the
    overall financial statement presentation.                                   
|   
|(6) | Under Canadian GAAP, the Company accounts for the
    interest rate swap transaction which converted fixed rate
    interest payments of 5.71% and 6.16% on the Senior Notes of
    $10 million and $55 million, respectively, using the
    synthetic instruments method. Under this method, the Company
    reports in earnings the net interest expense on the swap and
    associated debt as if it were a single, synthetic, financial
    instrument. Under US GAAP, the Company has designated the
    swap transaction of a hedge of changes in the fair value of its
    fixed rate debt caused by changes in interest rates. Under
    SFAS 133, Accounting for Derivative Instruments and
    Hedging Activities, the Company records the swap at its fair
    value. Changes in fair value of the swap are reported in
    earnings. Changes in the fair value of the debt being hedged
    which are attributable to changes in interest rates are
    recognized in earnings by adjustment of the carrying amount of
    the debt.





|                               |                                 
|------------------------------ | --------------------------------
|20   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of
    Financial Condition and Results of Operations

The following discussion and analysis should be
read in conjunction with our consolidated financial statements
and accompanying notes included elsewhere in this report.
Certain information contained in Managements
Discussion and Analysis of Financial Condition and Results of
Operations are forward-looking statements that involve
risks and uncertainties. Our actual results may differ
materially from the results discussed in the forward-looking
statements because of various factors, including those discussed
below and elsewhere in this Form 10-Q.

References to Hub, we,
us, our and the registrant
refer to Hub International Limited and its subsidiaries, unless
otherwise expressly stated. Unless otherwise indicated, all
dollar amounts are expressed in, and the term
dollars and the symbol $ refer to, U.S.
dollars. The term Canadian dollars and the symbol
C$ refer to Canadian dollars. Our financial
statements are prepared in accordance with Canadian generally
accepted accounting principles (Canadian GAAP). These principles
differ in certain respects from United States generally accepted
accounting principles (U.S. GAAP) and to the extent that they
effect us are described in note 14 to our interim consolidated
financial statements.

Overview

Hub is a leading North American insurance
brokerage providing a wide variety of property and casualty,
life and health, employee benefits, investment and risk
management products and services from in excess of
150 locations across North America. We were formed in
November 1998 through the merger of 11 independent,
privately held insurance brokerages.

We have acquired 91 brokerages in Canada and the
United States, with substantially all of our large acquisitions
focused in the United States over the past four years.
Accordingly, our revenue base has shifted increasingly to the
United States.

The chart below shows that acquisitions and
organic growth increased the portion of revenue generated in the
United States to 62% for the nine months ended
September 30, 2003 from 59% for the same period in 2002. We
expect that future acquisitions in the United States will
further increase the percentage of revenue and earnings we
derive from our U.S. Operations.

|                                                   |                     |                           |         |         |  |  |        |       |  |   |         |        |  |  |        |       | 
|-------------------------------------------------- | ------------------- | ------------------------- | ------- | ------- |  |  | ------ | ----- |  | - | ------- | ------ |  |  | ------ | ----- | 
|                                                   |                     |                          
|                                                   |                     | For the nine months ended
|                                                   |                     | September 30,            
|                                                   |                     |                          
|                                                   |                     |                           |         |        
|                                                   |                     | 2003                      |         | 2002   
|(in thousands of U.S. dollars, except percentages) |                     |                           |         |        
|                                                   |                     |                           |         |         |  |  |        |      
|Revenue                                            |                     |                           |         |         |  |  |        |       |  |   |         |        |  |  |        |      
|                                                   | U.S. Operations     |                           | $       | 127,931 |  |  |        | 61.6% |  |   | $       | 91,996 |  |  |        | 58.8% | 
|                                                   | Canadian Operations |                           | $       | 79,772  |  |  |        | 38.4% |  |   | $       | 64,336 |  |  |        | 41.2% | 
|                                                   |                     |                           |         |         |  |  |        |       |  |   |         |        |  |  |        |      
|Total                                              |                     | $                         | 207,703 |         |  |  | 100.0% |       |  | $ | 156,332 |        |  |  | 100.0% |      
|                                                   |                     |                           |         |         |  |  |        |       |  |   |         |        |  |  |        |      

We derive the majority of our revenue from
commissions which are calculated and paid as a percentage of
insurance premiums and therefore vary directly with changes in
premium charged by insurance companies. A combination of a
stagnant economy, stock market declines and losses related to
the terrorist events of September 11, 2001, have resulted
in historic underwriting losses, which forced insurance
companies to dramatically accelerate the rate of premium
increases and limit coverage availability. An environment of
higher premium rates is commonly referred to as a hard
market and generally results in increased commission
income. Thus, a hard market will generally contribute positively
to our operating results. Todays hard market, which began
in 2001, follows more than a decade of low premium rates in the
insurance industry. An environment of lower premium rates is
commonly referred to as a soft market and generally
results in flat or reduced commission income. The soft market,
which characterized much of the 1990s, fueled by excess
capacity and heavy competition for market share among insurance
companies, was at least partly offset by a strong economy and
robust capital markets in the second half of that decade.

During the third quarter of 2003, the hard market
continued and although premium rates are still increasing, the
rate of increase has declined. Premium rates for property
insurance have generally shown very small increases, while





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    21



---



##### 



premium rates for casualty insurance continue to
increase. The economy in the third quarter remained weak.
Although the insurance industry is typically less sensitive to
economic cycles than other industries, primarily because
insurance is considered a necessity for most businesses,
reductions in a clients sales, inventories and employee
head counts during a slow economy can lead to a reduction in
total premiums for certain types of insurance. In addition,
clients often respond to higher premium rates by adjusting
coverage, increasing deductibles or making other changes to
reduce their insurance costs. As a result, our commission income
did not keep pace with premium rate increases. Even though we
believe that the hard market will continue during 2003, the
longevity of the hard market and its future impact on other
operations is difficult to predict.


Our total revenue increased $15.1 million,
or 31%, to $64.7 million for the quarter. Of this increase,
$9.8 million was attributable to acquisitions and
$5.3 million was attributable to organic growth. Of our
total organic growth of 11%, 6 percentage points resulted
from the strengthening of the Canadian dollar in the third
quarter of 2003 as compared with the third quarter of last year.
We define organic growth as an increase in revenue for one
period as compared with a prior period, including net new
business and net increases in commissions from existing
business. Revenue from a brokerage we acquire is excluded from
the calculation of organic growth for the first 12 months
after the acquisition. During the third quarter of 2003, we
acquired one insurance brokerage. Total annual revenue acquired
through this acquisition was approximately $300.

As mentioned above, our revenue increased 31% for
the quarter, while net earnings before income taxes increased
17%, net earnings increased 26% and diluted earnings per share
increased 16% to $0.22. These increases reflect a
$1.0 million non-taxable gain on life insurance proceeds,
for the third quarter of 2003. Adjusted for this item, the
change from the prior year quarter on net earnings before income
taxes, net earnings and diluted earnings per share would have
been an increase of 5%, 7% and 0%, respectively. The increase in
adjusted net earnings did not result in an increase to adjusted
earnings per share because of the increase in the weighted
average number of shares outstanding.





|                               |                                 
|------------------------------ | --------------------------------
|22   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



Results of Operations

Three months ended September 30, 2003
compared with three months ended September 30,
2002

The table below shows a breakdown of our revenue
by segment and type for the three months ended
September 30, 2003 and 2002, including organic growth for
2003 (in thousands of U.S. dollars, except percentages):

|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|------------------------------------------- |  | ------- | ------ | ------ |  | ------ | ------ | -------------- |  | ------------- | ------ | ------- |  | --- | ---- |  |  | - | ------ | - |  | - | ----- | - |  |  | ----- | 
|                                            |  |         |        |        |  |        |        |                |  | Net           |        |         |  |    
|                                            |  |         |        |        |  |        |        | adjustment     |  |               |        |        
|                                            |  | Revenue |        | Total  |  | Total  |        | for            |  | Organic       |        | Organic
|                                            |  |         |        | change |  | growth |        | (acquisitions) |  | growth        |        | growth 
|                                            |  | 2003    |        | 2002   |  | ($)    |        | (%)            |  | and disposals |        | ($)     |  | (%)
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |    
|Total                                       |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Commission Income                           |  | $       | 60,772 |        |  | $      | 46,872 |                |  | $             | 13,900 |         |  |     | 30%  |  |  | $ | (9,663 | ) |  | $ | 4,237 |   |  |  | 9%    | 
|Contingent Commissions and Volume Overrides |  |         | 1,884  |        |  |        | 767    |                |  |               | 1,117  |         |  |     | 145% |  |  |   | 8      |   |  |   | 1,125 |   |  |  | 146%  | 
|Other Income                                |  |         | 2,015  |        |  |        | 1,913  |                |  |               | 102    |         |  |     | 5%   |  |  |   | (98    | ) |  |   | 4     |   |  |  | 0%    | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Total                                       |  | $       | 64,671 |        |  | $      | 49,552 |                |  | $             | 15,119 |         |  |     | 31%  |  |  | $ | (9,753 | ) |  | $ | 5,366 |   |  |  | 11%   | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|USA                                         |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Commission Income                           |  | $       | 35,031 |        |  | $      | 26,188 |                |  | $             | 8,843  |         |  |     | 34%  |  |  | $ | (9,330 | ) |  | $ | (487  | ) |  |  | (2)%  | 
|Contingent Commissions and Volume Overrides |  |         | 1,580  |        |  |        | 700    |                |  |               | 880    |         |  |     | 126% |  |  |   | 9      |   |  |   | 889   |   |  |  | 127%  | 
|Other Income                                |  |         | 1,369  |        |  |        | 1,409  |                |  |               | (40    | )       |  |     | (3)% |  |  |   | (98    | ) |  |   | (138  | ) |  |  | (10)% | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Total                                       |  | $       | 37,980 |        |  | $      | 28,297 |                |  | $             | 9,683  |         |  |     | 34%  |  |  | $ | (9,419 | ) |  | $ | 264   |   |  |  | 1%    | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Canada                                      |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Commission Income                           |  | $       | 25,741 |        |  | $      | 20,684 |                |  | $             | 5,057  |         |  |     | 24%  |  |  | $ | (333   | ) |  | $ | 4,724 |   |  |  | 23%   | 
|Contingent Commissions and Volume Overrides |  |         | 304    |        |  |        | 67     |                |  |               | 237    |         |  |     | 348% |  |  |   | (1     | ) |  |   | 236   |   |  |  | 347%  | 
|Other Income                                |  |         | 646    |        |  |        | 504    |                |  |               | 142    |         |  |     | 28%  |  |  |   |       |   |  |   | 142   |   |  |  | 28%   | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 
|Total                                       |  | $       | 26,691 |        |  | $      | 21,255 |                |  | $             | 5,436  |         |  |     | 26%  |  |  | $ | (334   | ) |  | $ | 5,102 |   |  |  | 24%   | 
|                                            |  |         |        |        |  |        |        |                |  |               |        |         |  |     |      |  |  |   |        |   |  |   |       |   |  |  |       | 

Revenue.We
increased total revenue by $15.1 million, or 31%, to
$64.7 million in the third quarter of 2003 from
$49.6 million in the third quarter of 2002. Of this
increase, $9.8 million or 65% was attributable to
acquisitions, and $5.3 million or 35% was attributable to
organic growth. Of our total organic growth of 11% for the
quarter, 6 percentage points resulted from the
strengthening of the Canadian dollar in the third quarter of
2003 as compared with the third quarter of last year. Commission
income increased by $13.9 million, or 30%, to
$60.8 million in 2003, from $46.9 million in the third
quarter of 2002. Excluding the effect of acquisitions,
commission income increased by $4.2 million, or 9%, due to
organic growth. In the third quarter of 2003, revenue from
contingent commissions and volume overrides, increased by
$1.1 million, or 145%, to $1.9 million from
$0.8 million in the third quarter of 2002 as described
below. In 2003, other income, which includes fees and interest
income, increased $0.1 million, or 5% to $2.0 million
from $1.9 million in 2002. Excluding the effects of acquisitions
of $0.1 million, organic growth of other income remained
constant.

U.S.
Operations

Total revenue from U.S. Operations increased by
$9.7 million, or 34%, to $38.0 million in the third
quarter of 2003 from $28.3 million in the third quarter of
2002. Excluding the effect of acquisitions, total revenue
increased $0.3 million, or 1%. Commission income increased
by $8.8 million, or 34%, to $35.0 million in the third
quarter of 2003 from $26.2 million in the third quarter of
2002. Excluding the effect of acquisitions, commission income
decreased $0.5 million, or 2% due to lower premium rate
increases in the third quarter of 2003 compared to 2002, a weak
economy, lower than anticipated new business generated and a
sharp decline in revenue from our financial





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    23



---



##### 



institutions practice. Revenue from contingent
commissions and volume overrides increased by $0.9 million,
or 126%, to $1.6 million in the third quarter of 2003 from
$0.7 million in the third quarter of 2003. This increase
was mainly due to a $0.7 million non-recurring wholesale
contingent commission in 2003. Other income remained constant at
$1.4 million in the third quarter of 2003 compared to the
third quarter 2002.


Canadian
Operations

Total revenue from Canadian Operations increased
by $5.4 million, or 26%, to $26.7 million in the third
quarter of 2003 from $21.3 million in the third quarter of
2002. Excluding the effect of acquisitions of $0.4 million,
total revenue increased by $5.0 million or 24%. This
increase was primarily due to increases in commission income. Of
our total organic growth for the quarter of 24%,
14 percentage points resulted from the strengthening of the
Canadian dollar in the quarter as compared with the third
quarter of last year. Commission income increased by
$5.1 million, or 24%, to $25.8 million in the third
quarter of 2003 from $20.7 million in the third quarter of
2002. Excluding the effect of acquisitions of $0.4 million,
commission income increased by $4.7 million, or 23%, the
result of organic growth. Contingent commissions and volume
overrides increased by $0.2 million, or 348%, to
$0.3 million in the third quarter of 2003 from
$0.1 million in the third quarter of 2002. Other income,
which includes fees and interest income, increased by
$0.1 million, or 28%, to $0.6 million in the third
quarter of 2003 from $0.5 million in the third quarter of
2002, primarily due to organic growth.

Compensation.Compensation costs in the third
quarter of 2003 increased by $10.3 million, or 38%, to
$36.9 million from $26.6 million in the third quarter
of 2002. Compensation costs as a percentage of total revenue
increased 3% to 57% from 54% in the third quarter of 2002. This
increase is primarily related to the effect of the lower than
expected revenue growth in the U.S. while other fixed costs
remained constant.

Selling, occupancy and administration.Selling, occupancy and administration
expenses increased by $2.9 million, or 26%, to
$14.0 million in the third quarter of 2003 from
$11.1 million in the third quarter of 2002. As a percentage
of total revenue, selling, occupancy and administration expenses
remained unchanged at 22%.

Depreciation.Depreciation expenses increased by
$0.2 million, or 7%, to $1.6 million in the third quarter
of 2003 from $1.4 million in the third quarter of 2002.
Depreciation expenses as a percentage of total revenue decreased
1% to 2% from 3% in the third quarter of 2002.

Interest expense.Interest expense increased by
$0.2 million, or 14%, to $1.3 million in 2003 from
$1.1 million in the third quarter of 2002. This increase is
primarily due to higher debt levels during the third quarter of
2003 as compared to 2002. During the third quarter of 2003, we
entered into an interest rate swap agreement that effectively
converted the $65 million fixed interest rate senior notes
into floating rate instruments. The effect of the swap is to
convert our fixed rate payments to a floating rate to ensure
that we pay a market related interest rate on a portion of our
borrowings. The swap reduced interest expense on the senior
notes by $0.7 million in the third quarter of 2003.

Intangible asset amortization.Intangible asset amortization
increased by $0.4 million, or 116%, to $0.8 million in
the third quarter of 2003 from $0.4 million in the third
quarter of 2002. This increase was primarily due to acquisitions.

(Gain) on disposal of property, equipment and
other assets.The third quarter of
2003 included gains on the sale of certain insurance accounts
and other assets of $0.3 million.

Loss/(gain) on put option liability.The third quarter of 2003 includes a
loss on put option liability of $0.7 million whereas a gain
of $0.3 million was recorded in 2002. The gain or loss
reflects changes in the fair value of the put options granted by
us. The related liability is classified as long-term debt until
such time as the options are exercised or expire. Factors
affecting the fair market value of the put option are the stock
price, stock volatility and interest rates.

Non-cash stock based compensation.Non-cash stock based compensation
increased by $0.8 million or 132%, to $1.4 million in
the third quarter of 2003 from $0.6 million in the third
quarter of 2002. Our policy is to expense the fair value of
stock based compensation over the period in which entitlement to
the compensation vests. Non-cash stock based compensation was 2%
and 1% of total revenue for the third quarter of 2003 and 2002,
respectively.





|                               |                                 
|------------------------------ | --------------------------------
|24   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



---



##### 



Non-cash stock based compensation of
$1.4 million in the third quarter of 2003 reflects the
impact of approximately 1.6 million stock options granted
as well as the impact of expensing the estimated value of stock
options that we anticipate granting next year for 2003 executive
management profitability bonuses. The expense for 2003 also
includes the impact of awarding restricted share units to
employees. Non-cash stock based compensation of
$0.6 million in the third quarter of 2002 reflects the
impact of approximately $1.3 million stock options granted.


Proceeds from life insurance.In July the Company recorded income of
$1.0 million for proceeds on life insurance on a former
executive of one of its U.S. subsidiaries. This income is not
subject to income tax.

Provision for income tax expense.Income taxes in the third quarter of
2003 and 2002 amounted to $3.2 million, respectively,
resulting in an effective tax rate of 32% and 37% in 2003 and
2002, respectively. The decrease in our effective tax rate was
primarily the result of non-taxable life insurance proceeds
received in the third quarter of 2003.

Net earnings.Net
earnings in the third quarter of 2003 increased by
$1.4 million, or 26%, to $6.8 million in the third
quarter of 2003 compared with $5.4 million in the third
quarter of 2002. Basic earnings per share increased 10% to $0.23
in the third quarter of 2003 compared with $0.21 per share in
2002. Diluted earnings per share increased 16% to $0.22 in the
third quarter of 2003 from $0.19 in the third quarter of 2002.
These results reflect $1.0 million of non-taxable life
insurance proceeds in the third quarter 2003. Adjusted for this
item, net earnings, basic earnings per share and diluted
earnings per share for the third quarter of 2003 would have been
$5.8 million, $0.20, and $0.19, respectively, which would
have resulted in an increase (decrease) of 7%, (5)%, and
0%, respectively, as compared to 2002. The increase in adjusted
net earnings did not result in increases to adjusted basic
earnings per share and adjusted diluted earnings per share
because of the increase in the weighted average number of shares
outstanding.





|                                 |                                
|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    25



---



##### 



Results of Operations

Nine months ended September 30, 2003
compared with nine months ended September 30,
2002

The table below shows a breakdown of our revenue
by segment and type for the nine months ended September 30,
2003 and 2002 including organic growth for 2003 (in thousands of
U.S. dollars, except percentages):

|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|------------------------------------------- |  | ------- | ------- | ------ |  | ------ | ------- | -------------- |  | ------------- | ------ | ------- |  | --- | ---- |  |  | - | ------- | - |  | - | ------ | - |  |  | ----- | 
|                                            |  |         |         |        |  |        |         |                |  | Net           |        |         |  |    
|                                            |  |         |         |        |  |        |         | adjustment     |  |               |        |        
|                                            |  | Revenue |         | Total  |  | Total  |         | for            |  | Organic       |        | Organic
|                                            |  |         |         | change |  | growth |         | (acquisitions) |  | growth        |        | growth 
|                                            |  | 2003    |         | 2002   |  | ($)    |         | (%)            |  | and disposals |        | ($)     |  | (%)
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |    
|Total                                       |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Commission Income                           |  | $       | 184,755 |        |  | $      | 140,498 |                |  | $             | 44,257 |         |  |     | 32%  |  |  | $ | (27,944 | ) |  | $ | 16,313 |   |  |  | 12%   | 
|Contingent Commissions and Volume Overrides |  |         | 17,150  |        |  |        | 10,198  |                |  |               | 6,952  |         |  |     | 68%  |  |  |   | (2,849  | ) |  |   | 4,103  |   |  |  | 40%   | 
|Other Income                                |  |         | 5,798   |        |  |        | 5,636   |                |  |               | 162    |         |  |     | 3%   |  |  |   | (314    | ) |  |   | (152   | ) |  |  | (3)%  | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Total                                       |  | $       | 207,703 |        |  | $      | 156,332 |                |  | $             | 51,371 |         |  |     | 33%  |  |  | $ | (31,107 | ) |  | $ | 20,264 |   |  |  | 13%   | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|USA                                         |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Commission Income                           |  | $       | 111,324 |        |  | $      | 81,198  |                |  | $             | 30,126 |         |  |     | 37%  |  |  | $ | (26,999 | ) |  | $ | 3,127  |   |  |  | 4%    | 
|Contingent Commissions and Volume Overrides |  |         | 12,575  |        |  |        | 6,588   |                |  |               | 5,987  |         |  |     | 91%  |  |  |   | (2,769  | ) |  |   | 3,218  |   |  |  | 49%   | 
|Other Income                                |  |         | 4,032   |        |  |        | 4,211   |                |  |               | (179   | )       |  |     | (4)% |  |  |   | (319    | ) |  |   | (498   | ) |  |  | (12)% | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Total                                       |  | $       | 127,931 |        |  | $      | 91,997  |                |  | $             | 35,934 |         |  |     | 39%  |  |  | $ | (30,087 | ) |  | $ | 5,847  |   |  |  | 6%    | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Canada                                      |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Commission Income                           |  | $       | 73,431  |        |  | $      | 59,300  |                |  | $             | 14,131 |         |  |     | 24%  |  |  | $ | (945    | ) |  | $ | 13,186 |   |  |  | 22%   | 
|Contingent Commissions and Volume Overrides |  |         | 4,575   |        |  |        | 3,610   |                |  |               | 965    |         |  |     | 27%  |  |  |   | (80     | ) |  |   | 885    |   |  |  | 25%   | 
|Other Income                                |  |         | 1,766   |        |  |        | 1,425   |                |  |               | 341    |         |  |     | 24%  |  |  |   | 5       |   |  |   | 346    |   |  |  | 24%   | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 
|Total                                       |  | $       | 79,772  |        |  | $      | 64,335  |                |  | $             | 15,437 |         |  |     | 24%  |  |  | $ | (1,020  | ) |  | $ | 14,417 |   |  |  | 22%   | 
|                                            |  |         |         |        |  |        |         |                |  |               |        |         |  |     |      |  |  |   |         |   |  |   |        |   |  |  |       | 

Revenue.We
increased total revenue by $51.4 million, or 33%, to $207.7
million in the first nine months of 2003 from
$156.3 million in the first nine months of 2002. Of this
increase, $31.1 million or 61% was attributable to
acquisitions, and $20.3 million or 39% was attributable to
organic growth. Of our total organic growth of 13% for the nine
months ending September 30, 2003, 5 percentage points
resulted from the strengthening of the Canadian dollar in 2003
as compared with the same period last year. Commission income
increased by $44.2 million, or 32%, to $184.7 million
in 2003, from $140.5 million in the first nine months of
2002. Excluding the effect of acquisitions, commission income
increased by $16.3 million, or 12%, due to organic growth
including the continued firm premium rate environment. Revenue
from contingent commissions and volume overrides, increased by
$7.0 million, or 68%, to $17.2 million from
$10.2 million in the first nine months of 2002. Excluding
the effects of acquisitions of $2.9 million, contingent
commissions and volume overrides increased by $4.1 million
or 40% as compared with the prior year. Contingent commissions
were higher in 2003 due to favorable terms established with
insurance companies and improved loss ratios as well as a
$0.7 million non-recurring wholesale contingent commission
in 2003. In 2003, other income, which includes fees and interest
income, increased by $0.2 million, or 3%, to
$5.8 million in the first nine months of 2003 from
$5.6 million, in the first nine months of 2002. Excluding
the effects of acquisitions of $0.3 million, other income
decreased $0.1 million or 3% as compared to prior year.

U.S.
Operations

Total revenue from U.S. Operations increased by
$35.9 million, or 39%, to $127.9 million in the first
nine months of 2003 from $92.0 million in the first nine
months of 2002. Excluding the effect of acquisitions, total
revenue increased





|                               |                                 
|------------------------------ | --------------------------------
|26   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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##### 



$5.8 million, or 6%, mainly due to increases
in commission income and contingent commissions and volume
overrides. Commission income increased by $30.1 million, or
37%, to $111.3 million in the first nine months of 2003
from $81.2 million in the first nine months of 2002.
Excluding the effect of acquisitions, commission income
increased $3.1 million, or 4% due to organic growth.
Revenue from contingent commissions and volume overrides
increased by $6.0 million, or 91%, to $12.6 million in
the first nine months of 2003 from $6.6 million in the
first nine months of 2002. Excluding the effect of acquisitions
of $2.8 million, contingent commissions and volume
overrides increased by $3.2 million, or 49%, as compared
with the prior year. Contingent commissions were higher in 2003
due to favorable terms established with insurance companies and
improved loss ratios as well as the non-recurring wholesale
contingent commission mentioned above. Other income, which
includes fees and interest income, decreased by
$0.2 million or 4% to $4.0 million in the first nine
months of 2003 from $4.2 million in the first nine months
of 2002. Excluding the effect of acquisitions of
$0.3 million, other income decreased $0.5 million, or
12% from 2002.


Canadian
Operations

Total revenue from Canadian Operations increased
by $15.5 million, or 24%, to $79.8 million in the
first nine months of 2003 from $64.3 million in the first
nine months of 2002. Excluding the effect of acquisitions of
$1.0 million, total revenue increased by $14.4 million
or 22%. This increase was primarily due to increases in
commission income. Of our total organic growth for the nine
months of 22%, 11 percentage points resulted from the
strengthening of the Canadian dollar in the first nine months as
compared with the first nine months of last year. Commission
income increased by $14.1 million, or 24%, to
$73.4 million in the first nine months of 2003 from
$59.3 million in the first nine months of 2002. Excluding
the effect of acquisitions of $0.9 million, commission
income increased by $13.2 million, or 22%, the result of
organic growth. Contingent commissions and volume overrides
increased by $1.0 million, or 27%, to $4.6 million in
the first nine months of 2003 from $3.6 million in the
first nine months of 2002. Excluding the effect of acquisitions
of $0.1 million contingent commissions and volume overrides
increased by $0.9 million or 25%. This increase is
primarily due to improved loss ratios. Other income, which
includes fees and interest income, increased by
$0.4 million, or 24%, to $1.8 million in the first
nine months of 2003 from $1.4 million in the first nine
months of 2002.

Compensation.Compensation costs in the first nine
months of 2003 increased by $29.6 million, or 35%, to
$113.7 million from $84.1 million in the first nine
months of 2002. Compensation costs as a percentage of total
revenue increased 1% to 55% for the first nine months of 2003
from 54% in the first nine months of 2002. This increase was
primarily attributable to the increase of compensation costs as
a percentage of total revenue experienced in the third quarter.

Selling, occupancy and administration.Selling, occupancy and administration
expenses increased by $7.5 million, or 23%, to
$40.9 million in the first nine months of 2003 from
$33.4 million in the first nine months of 2002. As a
percentage of total revenue, selling, occupancy and
administration expenses decreased to 20% in the first nine
months of 2003 from 21% in the first nine months of 2002. This
proportional decrease was due to efforts to ensure that certain
fixed costs remained constant while revenue grew.

Depreciation.Depreciation expenses increased by
$0.4 million, or 9%, to $4.5 million in the first nine
months of 2003 from $4.1 million in the first nine months
of 2002. Depreciation expenses as a percentage of total revenue
decreased 1% to 2% for the first nine months of 2003 from 3% in
the first nine months of 2002.

Interest expense.Interest expense decreased by
$2.0 million, or 33%, to $4.2 million in 2003 from
$6.2 million in the first nine months of 2002. This
reduction is primarily due to lower interest rates on
outstanding debt. During the third quarter of 2003, we entered
into an interest rate swap agreement that effectively converted
the $65 million fixed interest rate senior notes into
floating rate instruments. The effect of the swap is to convert
our fixed rate payments to a floating rate to ensure that we pay
a market related interest rate on a portion of our borrowings.
The swap reduced interest expense on the senior notes by
$0.7 million in the third quarter of 2003.

Intangible asset amortization.Intangible asset amortization
increased by $1.3 million, or 109%, to $2.4 million in
the first nine months of 2003 from $1.1 million in the
first nine months of 2002. This increase was due to acquisitions
in 2002.





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|-------------------------------- | -------------------------------
|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    27



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(Gain) on disposal of property, equipment and
other assets.The nine months of 2003
includes gains on the sale of certain insurance accounts and
other assets of approximately $0.3 million. The nine months
of 2002 includes the gain on the sale of Old Lyme of
$2.6 million which was not taxable.

Gain on put option liability.The gain on put option liability of
$0.2 million in the first nine months of 2003, as compared
with a gain of $0.9 million in the first nine months of
2002, reflects changes in the fair value of put options granted
by us. The decrease from 2002 of $0.7 million relates
primarily to the release of put option liability by the former
owners of Burnham Insurance Group, Inc. The related liability is
classified as long-term debt until such time as the options are
exercised or expire. Factors affecting the fair market value of
the put option are the stock price, stock volatility and
interest rates.

Non-cash stock based compensation.Non-cash stock based compensation
increased $3.0 million or 513% to $3.6 million for the
nine months ended September 30, 2003 from $0.6 million
in 2002. This increase is primarily due to the fact that the
2002 period reflects expense for one quarter, as we began
expensing options on July 1, 2002, whereas the 2003 period
reflects expense for 9 months, as well as additional stock
based compensation in 2003 as described below. Our policy is to
expense the fair value of stock options granted to employees
over the period in which entitlement to the compensation vests.
Non-cash stock option compensation was 2% and 0.4% of total
revenue for 2003 and 2002, respectively. Non-cash stock based
compensation of $3.6 million in the first nine months of
2003 reflects the impact of approximately 1.6 million stock
options as well as the impact of expensing the estimated value
of stock options that we anticipate granting next year for 2003
executive management profitability bonuses. The expense for 2003
also includes the impact of awarding restricted share units to
employees. Non-cash stock based compensation of
$0.6 million for the first nine months of 2002 reflects the
impact of approximately 1.3 million stock options granted
in June of 2002.

Proceeds from life insurance.In July we recorded income of
$1.0 million for proceeds on life insurance on a former
executive of one of our U.S. subsidiaries. This income is not
subject to income tax.

Provision for income tax expense.Income taxes in the first nine months
of 2003 and 2002 amounted to $14.1 million and
$9.3 million, respectively, resulting in an effective tax
rate of 35% and 31% in 2003 and 2002, respectively. The increase
in our effective tax rate was primarily the result of the
non-taxable gain on the sale of Old Lyme of $2.6 million in
the second quarter of 2002, partially offset by the non-taxable
life insurance proceeds of $1.0 million received in the
third quarter of 2003, and the remainder was the result of a
higher percentage of income taxed in the U.S. where tax rates
are significantly higher than in other jurisdictions.

Net earnings.Net
earnings in the first nine months of 2003 increased by
$4.7 million, or 23%, to $25.8 million in the first
nine months of 2003 compared with $21.1 million in the
first nine months of 2002. Basic earnings per share decreased 8%
to $0.88 in the first nine months of 2003 compared with $0.96
per share in 2002. Diluted earnings per share increased 3% to
$0.81 in the first nine months of 2003 from $0.79 in the first
nine months of 2002. These results reflect the $2.6 million
non-taxable gain on the sale of Old Lyme in the second quarter
of 2002, as well as the $1.0 million non-taxable life
insurance proceeds in the third quarter of 2003. Adjusted for
these items, net earnings, basic earnings per share and diluted
earnings per share for the nine months ended September 30,
2003 would have been $24.8 million, $0.85 and $0.78,
respectively, and for the nine months ended September 30,
2002 would have been $18.5 million, $0.84 and $0.70,
respectively, which would have resulted in an increase of 35%,
1% and 11% respectively, as compared to 2002. The increase in
adjusted net earnings did not result in increases to adjusted
earnings per share and adjusted diluted earnings per share
because of the increase in the weighted average number of shares
outstanding.

Cash Flow, Liquidity and Capital
Resources

We act as an intermediary between insurance
companies and their insured clients. As such, we collect and
hold premiums paid by clients on behalf of the insurers. We
deduct commissions and other expenses from these payments and
hold the remainder in trust for the insurers. We earn interest
on those funds during the time between receipt of the cash and
the time the cash is paid out to the insurers. However, we may
not use the funds for any purpose and we must remit the funds
within a specified period after the effective date of the
respective policy. The cash we hold in trust is shown separately
on our balance sheet. On the statement of cash flows, changes in
trust cash





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|28   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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are included as part of the change in non-cash
working capital and the determination of cash provided from
operating activities.


During the third quarter of 2003, we entered into
an interest rate swap agreement that effectively converted the
$65 million fixed interest rate senior notes into floating
rate instruments. The effect of the swap is to convert our fixed
rate payments to a floating rate to ensure that we pay a market
related interest rate on a portion of our borrowings. The swap
reduced interest expense on the senior notes by
$0.7 million in the third quarter of 2003.

As of September 30, 2003, we had cash and
cash equivalents of $79.1 million, an increase of
$38.5 million from $40.6 million as of
December 31, 2002. For the three months ended
September 30, 2003 and 2002, $17.9 million and
$8.6 million, respectively, of cash was provided by
operating activities. The amount of cash provided by operating
activities is affected by net earnings for the period, non-cash
income and expenses, the collection of accounts and other
receivables and the payment of accounts payable and accrued
liabilities. For the three months ended September 30, 2003,
$0.3 million of cash was used in investing activities,
primarily for the acquisitions of property and equipment and the
purchase of subsidiaries. For the three months ended
September 30, 2003, $1.8 million of cash was used for
financing activities, primarily in the repayment of long-term
debt and capital leases, and the payment of dividends. For the
three months ended September 30, 2003, the effect of
exchange rate changes on cash and cash equivalents was an
increase of $0.2 million.

For the nine months ended September 30, 2003
and 2002, $43.4 million and $7.0 million,
respectively, of cash was provided (used) by operating
activities. The amount of cash provided by operating activities
is affected by net earnings for the period, non-cash income and
expenses, the collection of accounts and other receivables and
the payment of accounts payable and accrued liabilities. For the
nine months ended September 30, 2003, $16.0 million of
cash was used in investing activities, primarily for the
acquisitions of subsidiaries and property and equipment. For the
nine months ended September 30, 2003, $8.7 million of
cash was provided by financing activities, resulting from our
private debt offering, of $65.0 million, and offset by the
repayment of other long-term debt and capital leases, and the
payment of dividends. For the nine months ended
September 30, 2003, the effect of exchange rate changes on
cash and cash equivalents was an increase of $2.3 million.

Net debt, defined as long-term debt, including
the current portion of long-term debt, and subordinated
convertible debentures less non-trust cash, as of
September 30, 2003, was $43.7 million compared with
$66.4 million as of December 31, 2002. Our debt to
capitalization ratio (defined as debt expressed as a percentage
of debt and shareholders equity) increased to 28% at
September 30, 2003, compared with 27% at December 31,
2002. As of September 30, 2003, we were in compliance with
the financial covenants under our credit facilities.

We believe that our existing cash, funds
generated from operations and borrowings available under our
credit facilities will be sufficient to satisfy our financial
requirements, including some strategic acquisitions, during the
next twelve months. We may finance acquisitions with available
cash or an existing credit facility, but may, depending on the
number and size of future acquisitions, need to supplement our
finance requirements with the proceeds from debt financing, the
issuance of equity securities, or a combination of both. If we
are unable to obtain additional financing on acceptable terms,
the extent to which we can increase our market share or expand
our business through acquisitions may be limited.





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|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    29



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Contingent obligations

Acquisitions

Contingent consideration may be issued in
connection with the 2001 acquisition of J.P. Flanagan
Corporation (Flanagan) as follows:

|     |  |               |            |               |  |  |               | 
|---- |  | ------------- | ---------- | ------------- |  |  | ------------- | 
|     |  |               |            | Contingent   
|     |  | Contingent    |            | consideration
|     |  | consideration |            | target       
|Year |  | (000s)       |            | criteria     
|     |  |               |            |              
|2003 |  |               | 126 shares |               |  |  | Revenue       | 
|2003 |  |               | 75 shares  |               |  |  | Profitability | 

The 2003 shares include 37,500 shares in each
category that have been carried over from 2002. The former
owners of Flanagan will be entitled to receive the 2002 shares
if the 2003 contingent consideration targets are met or exceeded.

In connection with the acquisition of Hooper
Hayes, we issued 196,000 shares that are being held in escrow
subject to release over a period of three years upon the
satisfaction of certain performance targets. As of
September 30, 2003 no shares have been released from escrow.

In connection with other various acquisitions
completed through September 30, 2003, the Company may be
obligated to pay contingent consideration up to a maximum sum of
approximately $2.0 million cash and $0.2 million in
common shares based upon the acquired brokerages achieving
certain targets. The contingent payments are payable on various
dates through September 2006 according to the terms and
conditions of each purchase agreement. Any additional
consideration will be recorded as an adjustment to goodwill once
the contingency is resolved. These financial statements reflect
a liability of approximately $450,000 as well as contingently
issuable shares valued at approximately $50,000 as of
September 30, 2003.

Other

In connection with our executive share purchase
plan, under certain circumstances we may be obligated to
purchase loans previously received by certain of our officers
and employees from a Canadian chartered bank totaling $5.9 and
$5.1 million as of September 30, 2003 and
December 31, 2002, respectively, to assist in purchasing
our common shares. As collateral, the employees have pledged
0.6 million common shares as of September 30, 2003 and
December 31, 2002, respectively, which have a market value
of $9.8 million and $7.7 million as of
September 30, 2003 and December 31, 2002,
respectively. Interest on the loans in the amount of $74,000 and
$222,000 for the three months and nine months ending
September 30, 2003 and $69,000 and $196,000 for the
respective periods in 2002, was paid by us and is included in
compensation expense.

We anticipate that we will grant stock options in
February 2004 in partial consideration of executive management
profitability bonuses for 2003. Management has estimated the
amount of these bonuses for 2003, and the fair value of the
stock options likely to be granted. In accordance with the
Canadian Institute of Chartered Accountants
(CICA) Accounting Standards Board Handbook
Section 3870, Stock-Based Compensation and Other
Stock-Based Payments, the fair value of these options is
being recognized as an expense evenly over the period they are
earned. Expenses for these options for the three months and nine
months ended September 30, 2003 was $264,000 and $994,000
and is included in non-cash stock based compensation with an
offsetting credit to accounts payable.

In the ordinary course of business, we are
subject to various claims and lawsuits consisting primarily of
alleged errors and omissions in connection with the placement of
insurance. In the opinion of management, the ultimate resolution
of all asserted and potential claims and lawsuits will not have
a material adverse effect on our consolidated financial position
or our results of operations.





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|------------------------------ | --------------------------------
|30   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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##### 



Shareholders equity

Restricted share units.We had previously committed to award,
under our equity incentive plan, an aggregate of 266,000
restricted shares that would be paid for by the participants
(none of whom are members of our senior management or directors)
with loans either from us or from a bank (guaranteed by us). In
addition, we had previously committed to award an aggregate of
471,000 restricted share units that would be exercisable for
common shares, without payment of cash consideration. On
June 30, 2003, we awarded 610,000 restricted share units in
satisfaction of substantially all of the above-mentioned
commitments. The restricted share units vest over periods
ranging from 68 months to 95 months. Our accounting
policy is to recognize the fair value of non-cash stock based
compensation as an expense over the period in which entitlement
to the compensation vests.

Share repurchases.For the three months and nine months
ended September 30, 2003, no common shares
were repurchased by us, other than 1,047 and 5,535 common
shares respectively, under the executive share purchase plan.

Shares reserved for issuance.As of September 30, 2003,
3.6 million common shares were reserved for issuance under
our equity incentive plan. As of September 30, 2003, an
aggregate of approximately 2.1 million stock options and
restricted share units were outstanding which would reduce such
shares reserved for issuance.

Shareholders equity increased by
$39.2 million, or 14%, to $323.5 million as of
September 30, 2003 from $284.3 million as of
December 31, 2002. This increase resulted from net earnings
of $25.8 million, an increase in contributed surplus of
$2.7 million related primarily to non-cash stock based
compensation expense, $0.3 million due to shares issued in
conjunction with the contingent consideration payments, as well
as an increase in the cumulative translation account of
$16.9 million, due mainly to the strengthening of the
Canadian dollar compared to the U.S. dollar in 2003. The
increase in shareholders equity was offset by the payment
of dividends of $4.5 million in 2003, and a reduction in
share capital of $2.0 million as a result of a transfer
from long-term assets on company funded loans to executives used
to purchase company shares. This treatment is consistent with
U.S. GAAP.

Market risk

Interest rate risk

We are exposed to interest rate risk in
connection with our credit facilities due to the interest rate
swap entered into in July which converted the fixed rate
interest payments on the $65 million of Senior Notes
outstanding into floating rate payments. At September 30,
2003, we had $65 million of floating rate debt outstanding.
Each 100 basis point increase in interest rates charged on the
balance of our outstanding floating rate debt as of
September 30, 2003 will result in approximately
$0.4 million decrease in our earnings.

Exchange rate sensitivity

We report our revenue in U.S. dollars. Our
Canadian operations earn revenue and incur expenses in Canadian
dollars. Given our significant Canadian dollar revenue, we are
sensitive to the fluctuations in the value of the Canadian
dollar and are therefore exposed to foreign currency exchange
risk. Foreign currency exchange risk is the potential for loss
in revenue and net income as a result of a decline in the
U.S. dollar value of Canadian dollar revenue due to a
decline in the value of the Canadian dollar compared to the
U.S. dollar.

The Canadian dollar is subject to volatility and
has experienced a significant decline in its value compared to
the U.S. dollar in recent years but has increased in value
in the first nine months of 2003. At September 30, 2003 and
December 31, 2002 one U.S. dollar equaled $1.3504 and
$1.5779 Canadian dollars, respectively. The table below





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|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    31



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summarizes the effect that a $0.01 decline or
increase in the value of the Canadian dollar would have had on
our revenue, net earnings and cumulative translation account for
the nine months ended September 30, 2003, and 2002.


|                                                   |  |      |       |      |  |      |       | 
|-------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | 
|                                                   |  | 2003 |       | 2002
|(in thousands of U.S. dollars, except percentages) |  |      |       |     
|                                                   |  |      |       |     
|Revenue                                            |  | +/-$ | 1,137 |      |  | +/-$ | 1,009 | 
|Net earnings                                       |  | +/-$ | 123   |      |  | +/-$ | 190   | 
|Cumulative translation account                     |  | +/-$ | 107   |      |  | +/-$ | 24    | 

The increasing proportion of our revenue derived
from our U.S. Operations and earned in U.S. dollars
has, in part, offset the potential risk of a decline in the
Canadian dollar. We expect that the proportion of revenue earned
in U.S. dollars will continue to increase, further
mitigating our foreign currency exchange sensitivity. We have
not entered into, and do not intend to enter into, foreign
currency forward exchange agreements.

Related party transactions

In the three months and nine months ended
September 30, 2003 and 2002 we had transactions with and
recorded revenue from the following related parties (the Fairfax
Companies) (in thousands of U.S. dollars):

|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 
|--------------------------------- |  | ------------- | ----- | ------------- |  | ---- | ----- | ---- |  | - | ------ |  |  | - | ------ | 
|                                  |  |               |       |              
|                                  |  | For the three |       | For the nine 
|                                  |  | months ended  |       | months ended 
|                                  |  | September 30, |       | September 30,
|                                  |  |               |       |              
|                                  |  | 2003          |       | 2002          |  | 2003 |       | 2002
|                                  |  |               |       |               |  |      |       |     
|Northbridge Financial Corporation |  | $             | 5,469 |               |  | $    | 3,404 |      |  | $ | 12,091 |  |  | $ | 8,600  | 
|Crum & Forster Holdings, Inc.     |  |               | 221   |               |  |      | 425   |      |  |   | 1,052  |  |  |   | 706    | 
|Fairfax Inc.                      |  |               | 1,665 |               |  |      | 1,595 |      |  |   | 5,928  |  |  |   | 3,989  | 
|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 
|                                  |  | $             | 7,355 |               |  | $    | 5,424 |      |  | $ | 19,071 |  |  | $ | 13,295 | 
|                                  |  |               |       |               |  |      |       |      |  |   |        |  |  |   |        | 

As of September 30, 2003 and
December 31, 2002 we had accounts receivable and accounts
payable balances with the above related parties in the amounts
of $3.0 and $9.6 million at September 30, 2003,
respectively, and $2.1 and $12.2 million, at December 31,
2002, respectively. The companies above are related through
common ownership by Fairfax Financial Holdings Limited
(Fairfax), which owns approximately 26% of our outstanding
common shares however, if Fairfax converted the convertible
subordinated debentures it holds through certain of its
subsidiaries it would hold 33% of our common shares. All of our
transactions with the Fairfax companies are conducted in the
normal course of business and at fair value. In the aggregate,
our brokerage subsidiaries generated approximately 8% of our
total revenue for the nine months ended September 30, 2003
from these related parties.

As of September 30, 2003 and
December 31, 2002, long-term debt related to put options of
$6.8 and $5.9 million, respectively, and subordinated
convertible debentures of $35.0 million at
September 30, 2003 and December 31, 2002, are due to
related parties.

During the three months and nine months ended
September 30, 2003 and 2002, we incurred expenses related
to rental of premises from related parties in the amount of
$0.6, and $1.6 million, for 2003 and $0.5 and
$1.3 million for the respective periods in 2002. At
September 30, 2003 and December 31, 2002 we also had
receivables due from related parties in the amount of
$3.8 million, of which the majority were loans to employees
to enable them to purchase our common shares.





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|32   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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Off-Balance Sheet Transactions

We have no material off-balance sheet
arrangements.

Critical Accounting Policies

Our significant accounting policies have not
changed from December 31, 2002.

Item 3. Quantitative and Qualitative
Disclosures about Market Risk

See Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Market risk.

Item 4. Controls and
Procedures

Under SEC rules, we are required to maintain
disclosure controls and procedures designed to ensure that
information required to be disclosed by us in the reports that
we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms.

Our chief executive officer and chief financial
officer conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Rule 13a-14(c)
and 15d-14(c) promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act) as of September 30,
2003 (the Evaluation Date). Based on that evaluation, our chief
executive officer and chief financial officer concluded that as
of the Evaluation Date, our disclosure controls and procedures
were effective in timely alerting them to material information
relating to us required to be disclosed in our reports filed or
submitted under the Exchange Act. In addition, there have been
no significant changes (including corrective actions with regard
to significant deficiencies or material weaknesses) in the
design or operation of our internal control over financial
reporting or in other factors that could significantly affect
our internal control over financial reporting during the third
quarter of 2003. Notwithstanding the foregoing, there can be no
assurance that our disclosure controls and procedures will
detect or uncover all failures within our company to disclose
all material information otherwise required to be set forth in
our periodic reports.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, we are involved
in various claims and legal proceedings relating to insurance
placed by us and other contractual matters. Our management does
not believe that any such pending or threatened proceedings will
have a material adverse effect on our consolidated financial
position or future results of operations.

Item 2. Changes in Securities and
Use of Proceeds

On August 28, 2003, we issued 11,001 common
shares to the former owners of Piazza Insurance Agency, Inc. as
consideration for contingent obligations payable in connection
with the acquisition of that brokerage.

Item 5. Other Information

Information Concerning Forward-Looking
Statements

This Form 10-Q includes, and from time to
time management may make, forward-looking statements which
reflect our current views with respect to future events and
financial performance. These forward-looking statements relate,
among other things, to our plans and objectives for future
operations. These forward-looking statements are subject to
uncertainties and other factors that could cause actual results
to differ materially from such statements. These uncertainties
and other factors include, but are not limited to, risks
associated with:



|  |                                              
|- | ---------------------------------------------
| | implementing our business strategies;        
| 
| | identifying and consummating acquisitions;   
| 
| | successfully integrating acquired businesses;





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|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    33



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|  |                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | attaining greater market share;                                                                                                                              
| 
| | developing and implementing effective information
    technology systems;                                                                                    
| 
| | recruiting and retaining qualified employees;                                                                                                                
| 
| | fluctuations in the demand for insurance products;                                                                                                           
| 
| | fluctuations in the premiums charged by insurance
    companies (with corresponding fluctuations in our premium-based
    revenue);                          
| 
| | any loss of services of key executive officers;                                                                                                              
| 
| | industry consolidation;                                                                                                                                      
| 
| | increased competition in the industry; and                                                                                                                   
| 
| | the passage of new federal, state or provincial
    legislation subjecting our business to increased regulation in
    the jurisdictions in which we operate.

The words believe,
anticipate, project, expect,
intend, will likely result or will
continue and similar expressions identify forward-looking
statements. We caution readers not to place undue reliance on
these forward-looking statements, which speak only as of their
dates. Except as otherwise required by federal securities laws,
we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.

Dividends

On July 30, 2003 the Board of Directors
declared a dividend of $0.05 on our common shares, payable
September 30, 2003 for the quarter ended September 30,
2003 to shareholders of record on September 15, 2003.


Item 6. Exhibits and Reports on
Form 8-K

(a) Exhibits

|     |  |                                                                                                                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Letter Agreement dated July 15, 2003 between
    Bank of Montreal and Hub International Limited relating to an
    Interest Rate Swap Transaction on USD$10,000,000.00.                                                                                                  
|10.2 |  | Letter Agreement dated July 15, 2003 between
    Bank of Montreal and Hub International Limited relating to an
    Interest Rate Swap Transaction on USD$55,000,000.00.                                                                                                  
|99.1 |  | Information under the caption Risks related
    to our business and Risks related to our common
    shares is incorporated by reference from the
    registrants Annual Report on Form 10-K filed with the
    Securities and Exchange Commission on March 14, 2003.
|99.2 |  | Certification of the Chief Executive Officer,
    Martin P. Hughes, pursuant 18 U.S.C. Section 1350, as
    enacted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.                                                                                       
|99.3 |  | Certification of the Chief Financial Officer,
    Dennis J. Pauls, pursuant 18 U.S.C. Section 1350, as
    enacted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.                                                                                        
|99.4 |  | Certification of the Chief Executive Officer,
    Martin P. Hughes, pursuant 18 U.S.C. Section 1350, as
    enacted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                       
|99.5 |  | Certification of the Chief Financial Officer,
    Dennis J. Pauls, pursuant 18 U.S.C. Section 1350, as
    enacted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                        

(b) Current Reports on Form 8-K

We filed a Current Report on Form 8-K on
July 31, 2003 furnishing a press release which provided the
registrants earnings for the quarter ended June 30,
2003.





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|34   HUB INTERNATIONAL LIMITED | INTERIM REPORTSEPTEMBER 30, 2003



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SIGNATURE

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



| |                          
| | -------------------------
| | HUB INTERNATIONAL LIMITED



| |     |                    
| | --- | -------------------
| | By: | /s/ DENNIS J. PAULS

| |                                                              
| | -------------------------------------------------------------
| |                                                              
| | Dennis J. Pauls                                              
| | Vice President and Chief Financial Officer                   
| | (duly authorized officer and Principal Financial
    Officer)
|
| | DATE: November 6, 2003                                       





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|INTERIM REPORTSEPTEMBER 30, 2003 | HUB INTERNATIONAL LIMITED    35