##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    fromto   Commission file number: 001-32883
 DARWIN PROFESSIONAL
    UNDERWRITERS, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

03-0510450(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification Number)9 Farm Springs Road

06032(Address of principal executive offices)

(Zip Code)   Registrants telephone number, including area code:
 860-284-1300
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value

New York Stock Exchange   Securities
    registered pursuant to Section 12(g) of the Act:
 Not applicable
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   o þ
  17,025,051
  DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




---



##### 





Darwin
    Professional Underwriters, Inc.
  Annual
    Report on
    Form 10-K
  For
    Fiscal Year Ended December 31, 2007
  TABLE OF
    CONTENTS
   
 Item

Description

PagePART I1.


Business


31A.


Risk Factors


321B.


Unresolved Staff Comments


412.


Properties


413.


Legal Proceedings


414.


Submission of Matters to a Vote of Security


42PART II5.


Market for Registrants Common Equity
    Holders and Related Stockholder Matters and Issuer Purchases of
    Equity Securities


426.


Selected Financial Data


457.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


477A.


Quantitative and Qualitative Disclosures About
    Market Risk


738.


Financial Statements and Supplementary Data


749.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


749A.


Controls and Procedures


749B.


Other Information


75PART III10.


Directors and Executive Officers and Corporate
    Governance of the Registrant


7611.


Executive Compensation


7612.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


7613.


Certain Relationships and Related Transactions
    and Director Independence


7614.


Principal Accountant Fees and Services


76PART IV15.


Exhibits and Financial Statement Schedules


76Signatures


77Index to Consolidated Financial Statements and
    Schedules


F-1EX-21: LIST OF SUBSIDIARIESEX-23: CONSENT OF KPMG LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   2




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##### Table of Contents



PART I  Unless the context requires otherwise, references in this
    Annual Report on
    Form 10-K
    to Darwin, the Company, we,
    our and us are to Darwin Professional
    Underwriters, Inc. and its subsidiaries, taken as a whole,
    unless the context otherwise requires. We also refer to Darwin
    Professional Underwriters, Inc., excluding its subsidiaries, as
    DPUI. References to Alleghany are to
    Alleghany Corporation, our ultimate parent company, which is a
    holding company primarily engaged, through its subsidiaries, in
    the property and casualty insurance business. Our intermediate
    holding company subsidiaries are Darwin Group, Inc. (referred to
    herein as Darwin Group) and Evolution
    Underwriting Inc. as of November 30, 2007 (referred to
    herein as Evolution). References to
    (a) DNA are to our subsidiary Darwin National
    Assurance Company, (b) Darwin Select are to
    DNAs subsidiary Darwin Select Insurance Company and
    (c) Vantapro are to DNAs subsidiary
    Vantapro Specialty Insurance Company (formerly named
    Midway Insurance Company of Illinois), and
    (d) AMS are to Evolutions subsidiaries
    acquired on January 4, 2008, Agency Marketing Services,
    Inc., Allsouth Professional Liability, Inc. and Raincross
    Insurance, Inc., collective. Whenever in this Annual Report we
    refer to business generated, written or produced by Darwin, we
    include business produced by DPUI and written on policies of
    certain insurance company subsidiaries of Alleghany (which we
    refer to as the Capitol Companies), , all of which
    policies are now fully reinsured by DNA. This Annual Report
    gives effect to certain reorganization and reinsurance
    transactions that were implemented prior to our May 2006 initial
    public offering as though the structure of our business
    resulting there from had been in effect since our inception in
    March 2003. See Business for a description of these
    transactions.
  ITEM 1.
    Business.  Overview
         3




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##### Table of Contents



Form S-3
     4




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##### Table of Contents



Our
    Competitive Strengths
    Experienced Management.
  Specialized Product Offerings and Underwriting
    Expertise.
  Our Knowledge of the Healthcare Industry.
  Focused Distribution.
  Innovative Use of Technology. i-bind, i-bind
  Strong Rating. Risks Related to Our Business
  Conservative Balance Sheet.
 5




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##### Table of Contents



Our
    Strategy
    A Balanced Book of Business with a Bias to Smaller
    Accounts. i-bind
  A Culture Focused on Underwriting
    Profitability.
  Limited Commodity Business.
  
    Emphasizing primary and first excess layer
    business.  We believe that, at these attachment
    points, we have more influence over terms, conditions, rates,
    and handling of claims, and that our greater degree of
    involvement in these matters enables us both to form stronger
    relationships with customers and to better demonstrate our
    service capabilities directly to the customers.
    Providing added value to insureds.  We believe
    both our profitability and the stickiness (loyalty)
    of our producer and customer relationships are improved when we
    provide value-enhancing activities, such as risk management and
    loss control assistance, to insureds.
    Constantly looking for new niche
    opportunities.  We believe that we are better
    positioned than our competitors to capitalize on new
    opportunities that arise from market dislocations, such as an
    underserved market, an unmet need for innovation and speed, or a
    disparity between the perception and reality of a particular
    type of risk.  Technology that Optimizes Efficiency.
 6




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##### Table of Contents



Expanded Use of i-bind i-bind i-bind i-bind i-bind
  Grow Responsibly into Our Capital Base.
  Selective Acquisitions. and/or
  Industry
    Dynamics
  and/or
  sub-prime class-actions
 7




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##### Table of Contents



Admitted
    Business and Surplus Lines Business
  and/or
      Our
    Products and Markets
   8




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##### Table of Contents



Year Ended December 31,2007


2006


2005Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Directors and Officers

$
38,737



13.8
%

$
40,626



16.5
%

$
32,926



19.9
%Errors and Omissions


140,013



49.9
%


111,039



45.1
%


58,867



35.5
%Medical Malpractice Liability


100,783



36.0
%


94,587



38.4
%


74,031



44.6
%General Liability


750



0.3
%






0.0
%






0.0
%Total

$
280,283



100.0
%

$
246,252



100.0
%

$
165,824



100.0
%         D&O.
  Public Accounts.
  Private Accounts and Non-Profit Accounts. i-bind
  i-bind. i-bind
 9




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##### Table of Contents



Healthcare Management Liability.
  Financial Institutions D&O/E&O:
  E&O.
  Managed Care E&O.
  Lawyers Professional E&O.
   10




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##### Table of Contents



Insurance Agents E&O.
  Insurance Company D&O and E&O.
  Technology E&O.
  Municipal Entity and Public Officials
    E&O. and/or
  Psychologists E&O.
 11




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##### Table of Contents



Media Liability.
  Miscellaneous Professional
    E&O. sub-classes i-bind
  Medical Malpractice Liability.
  Hospital Professional Liability.
  Miscellaneous Medical Facilities.
  Physicians and Physician Groups.
 12




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##### Table of Contents



Psychiatrist
  Senior Living Professional Liability. sub-acute/skilled
  General Liability:
  Liability for Short-line Railroads.
 13




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##### Table of Contents



Geographic
    Concentration
    Year Ended December 31,2007


2006


2005Percent of





Percent of





Percent ofAmount


Total


Amount


Total


Amount


Total(Dollars in thousands)California(1)

$
28,998



10.4
%

$
22,567



9.2
%

$
14,156



8.5
%Pennsylvania


23,803



8.5
%


20,206



8.2
%


10,696



6.4
%Texas


21,738



7.8
%


18,205



7.4
%


14,786



8.9
%New York(2)


21,149



7.5
%


18,240



7.4
%


12,441



7.5
%Florida


19,599



7.0
%


16,168



6.6
%


14,557



8.8
%Illinois


18,909



6.7
%


14,714



6.0
%


9,405



5.7
%New Jersey


12,874



4.6
%


10,636



4.3
%


6,289



3.8
%Connecticut


9,893



3.5
%


7,033



2.8
%


5,437



3.3
%Arizona


8,515



3.0
%


6,210



2.5
%


2,654



1.6
%Ohio


7,851



2.8
%


5,395



2.2
%


4,591



2.8
%All others


106,954



38.2
%


106,878



43.4
%


70,812



42.7
%Total

$
280,283



100.0
%

$
246,252



100.0
%

$
165,824



100.0
%     (1)
    
    Darwin Select is currently eligible as a surplus lines carrier
    in California. DNA received its California license during the
    fourth quarter of 2007.(2)
    
    DNA is currently licensed in New York. Darwin Select became an
    eligible surplus lines carrier in New York during the first
    quarter of 2008.  Concentration
    by Statutory Line
    Year Ended December 31,2007


2006


2005Percent of





Percent of





Percent ofAmount


Total


Amount


Total


Amount


Total(Dollars in thousands)Other liability(1), claims-made

$
175,266



62.5
%

$
147,687



60.0
%

$
91,494



55.2
%Other liability(1), occurrence


4,234



1.5
%


3,978



1.6
%


299



0.2
%Medical malpractice liability, claims made


100,783



36.0
%


94,587



38.4
%


74,031



44.6
%Total

$
280,283



100.0
%

$
246,252



100.0
%

$
165,824



100.0
%     (1)
    
    Under statutory reporting standards, Other liability
    includes, but is not limited to, D&O, E&O, and GL.  Underwriting
   14




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Marketing
    and Distribution
     15




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##### Table of Contents



i-bind i-bind i-bind i-bind
  Arrangements
    with the Capitol Companies
       16




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##### Table of Contents



Year Ended December 31,2007


2006


2005(Dollars in millions)Public D&O Gross Premiums Written

$
21.0


$
29.0


$
26.3Total Gross Premiums Written

$
280.3


$
246.3


$
165.8Percentage of Total Represented by Public D&O


7.5
%


11.8
%


15.9
%       Reinsurance
  Ceded
    Reinsurance
        Treaty Reinsurance.
 17




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##### Table of Contents



Total CompanyRetention atProduct Lines

MaximumPolicy

Reinsurance

Description of

Maximum LimitTreaty

Covered

Limits Offered

Coverage

Company Retention

OfferedProfessional Lines(1)

Commercial, Healthcare and FI D&O, FI E&O and
    Shortline Railroad General Liability

$20 million per claim for A-Side D&O;  $15 million per
    claim for Healthcare D&O; and $10 million per claim for all
    other classes

$18 million excess of $2 million per claim for A-Side D&O;
    $13 million excess of $2 million for Healthcare D&O;  $8
    million excess of $2 million per claim for all other classes

First $2 million per claim;  25% of the next $3 million of loss
    per claim; 15% of the next $10 million of loss per claim; and
    10% of the next $5 million of loss per claim

$4.75 million per claim for A-Side D&O;  $4.25 million per
    claim for Healthcare D&O; and $3.5 million per claim for
    all other classesProfessional Lines(1)

Private and Non-Profit D&O, E&O (Technology E&O,
    Lawyers Professional E&O for law firms with fewer than 100
    lawyers, Insurance Agents E&O, Insurance Company E&O,
    Miscellaneous Professional E&O, and Media)

$15 million per claim for Private and Non-Profit D&O and
    Insurance Agents E&O; and $10 million per claim for all
    other classes

$14 million excess of $1 million per claim for Private and Non-
    Profit D&O and Insurance Agents E&O; $9 million excess
    of $1 million per claim for all other classes

First $1 million per claim;  25% of the next $4 million of loss
    per claim; and 15% of the next $10 million of loss per claim

$3.5 million per claim for Private and Non-Profit D&O and
    Insurance Agents E&O;  $2.75 million per claim for all
    other classesManaged Care E&O(1)

Managed Care E&O

$20 million per claim for Managed Care E&O

$18 million excess of  $2 million per claim

First $2 million per claim;  25% of the next $3 million of loss
    per claim; 15% of the next $5 million of loss per claim; and 10%
    of the next $10 million of loss per claim

$4.5 million per claimMedical Malpractice(1)

Physicians, Hospitals

$16 million per claim

$10 million excess of  $1.0 million per claim

First $1 million per claim; 15% of loss in excess of $1 million
    per claim

$2.5 million per claimPsychiatrists

Psychiatrists Professional Liability

$2 million per claim

$1.5 million excess of $0.5 million per claim

$0.5 million per claim

$0.5 million per claimPsychologists

Psychologists E&O Liability

$2 million per claim

$1.50 million excess of  $0.5 million per claim

$0.5 million per claim

$0.5 million per claimPublic Entity(1)

Municipal Entity and Public Officials, Police and Governmental
    Employees E&O

$5 million per claim

$4.7 million excess of $0.3 million per claim

First $0.3 million per claim;  15% of $1 million in excess of $1
    million per claim; 10% of $3 million in excess of $2 million per
    claim

$0.75 million per claim     (1)
    
    Caps or aggregate limits apply to various layers of coverage as
    set forth in each reinsurance contract.    
    Fixed rate excess of loss reinsurance, under which we cede a
    fixed percentage of premiums to our reinsurers depending upon
    the policy limits written, provides indemnification to us in
    excess of a fixed amount of losses incurred up to a maximum
    recoverable amount. The maximum amount recoverable is expressed
    as 18




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##### Table of Contents



either a dollar amount or a loss ratio cap which is expressed as
    a percentage of the maximum amount of the ceded premium. In some
    instances the contracts are expressed as the greater of a dollar
    amount or a loss ratio cap. The maximum amounts recoverable when
    expressed as a loss ratio cap vary from a minimum of 250% to a
    maximum in excess of 700% of ceded premium payable within the
    terms of the contracts.  
    Variable rate excess of loss reinsurance is structured on a
    basis that enables us to retain a greater portion of premium if
    our ultimate loss ratio is lower than an initial loss pick
    threshold set by our reinsurers. For these contracts our
    ultimate ceded premium incurred on these treaties is determined
    by the loss ratio on the business subject to the reinsurance
    treaty. As the expected ultimate loss ratio increases or
    decreases, the ceded premiums and losses recoverable from
    reinsurers will also increase or decrease relationally within a
    minimum and maximum range for ceded premium and up to a loss
    ratio cap for losses recoverable. Until such time as the ceded
    premium reaches the maximum rate within the terms of the
    contract, ceded premium paid to the reinsurer will be in excess
    of the amount of any losses recoverable from reinsurers. After
    the ceded premium incurred reaches the maximum rate stated in
    the contract, losses incurred covered within the contract are
    recoverable from reinsurers up to a maximum amount recoverable,
    without any required additional ceded premium payment. The
    maximum amount recoverable is expressed as either a dollar
    amount or a loss ratio cap which is expressed as a percentage of
    the maximum amount of the ceded premium. In some instances the
    contracts are expressed as the greater of a dollar amount or a
    loss ratio cap. When expressed as a loss ratio cap these
    variable rated contracts vary from 225% to 300% of the maximum
    rate of ceded premium payable within the terms of the contracts.
    As a result, the same uncertainties associated with estimating
    loss and loss adjustment expense (LAE) reserves
    affect the estimates of ceded premiums and losses recoverable
    from reinsurers on these contracts. In some instances we have
    purchased variable rated excess of loss reinsurance that has no
    maximum amount recoverable.      Facultative Reinsurance.
  Risk Transfer Requirements. Accounting for Reinsurance
  Darwin Select Reinsurance Recoverable.
 19




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##### Table of Contents



Vantapro Reinsurance Recoverable.
  Principal
    Reinsurers
    ReinsuranceLess





RecoverableLess


Amounts in





on Losses as aReinsurance





Reinsurance


Trust





% of TotalRecoverable on


Ceded


Ceded


Accounts





ReinsuranceA.M.


Paid


Unearned


Premiums


or Secured


Net


RecoverableBest


and Unpaid


Reinsurance


Payable


by Letters


Exposure to


on Paid andReinsurer

Rating


Losses


Premiums


(Receivable)


of Credit


Reinsurer


Unpaid Losses(Dollars in thousands)Transatlantic Reinsurance Company


A+


$
31,642


$
8,293


$
1,411


$



$
38,524



23.2
%Max Re Limited


A−



18,571



7,690



2,078



24,183







13.6
%AXIS Reinsurance Company


A



16,986



8,953



3,506







22,433



12.5
%ACE Property and Casualty Insurance Company


A+



15,224



355



(181
)






15,760



11.2
%Allied World Assurance Corporation


A



14,745



3,511



1,257



17,000







10.8
%Liberty Syndicate 4472(1)


A



11,245



5,923



2,504







14,664



8.2
%Platinum Underwriters Reinsurance, Inc.


A



11,142



6,277



1,433







15,986



8.2
%Partner Reinsurance Company of the U.S.


A+



3,322



96



(322
)






3,740



2.5
%American Reinsurance Company


A



2,516



130



(8
)






2,654



1.8
%Ulico Casualty Company


B+



1,515











1,528







1.1
%Subtotal






126,908



41,228



11,678



42,711



113,761



93.1
%All other reinsurers






9,462



2,016



38



1,712



9,728



6.9
%Total reinsurance receivable





$
136,370


$
43,244


$
11,716


$
44,423


$
123,489



100.0
%     (1)
    
    Liberty Syndicate 4472 is a wholly-owned subsidiary of Liberty
    Mutual Group Inc.  Reinsurance Assumed from the Capitol
    Companies.
 20




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##### Table of Contents



Claims
    Management and Administration
        Reserves
    for Unpaid Losses and LAE
       21




---



##### Table of Contents



Changes
    in Historical Net Loss and LAE Reserves
   22




---



##### Table of Contents



Year Ended December 31,2003


2004


2005


2006


2007(Dollars in thousands)Gross liability-end of period

$
3,485


$
47,207


$
138,404


$
263,549


$
387,865Reinsurance recoverable on unpaid losses-end of period


990



15,572



51,229



96,258



136,012Net liability-end of period


2,495



31,635



87,175



167,291



251,853Cumulative amount of net liability paid as of:One year later


50



1,782



6,231



11,999Two years later


555



3,250



12,023Three years later


557



4,134Four years later


549Net liability re-estimates as of:One year later


2,495



31,601



84,915



153,505Two years later


2,527



29,341



77,158Three years later


2,186



22,495Four years later


1,066Net cumulative redundancy (deficiency)

$
1,429


$
9,140


$
10,017


$
13,786Gross liability-end of period

$
3,485


$
47,207


$
138,404


$
263,549


$
387,865Reinsurance recoverable on unpaid losses-end of period


990



15,572



51,229



96,258



136,012Net liability-end of period

$
2,495


$
31,635


$
87,175


$
167,291


$
251,853Gross re-estimated liability-latest

$
1,596


$
30,745


$
113,044


$
238,015Re-estimated recoverable-latest


530



8,250



35,886



84,510Net re-estimate liability-latest


1,066



22,495



77,158



153,505Gross cumulative redundancy (deficiency)

$
1,889


$
16,462


$
25,360


$
25,534   Net Loss
    and LAE Reserves
    Reconciliation
    of Reserves for Losses and LAE from SAP Basis to
    GAAP Basis
  Year Ended December 31,2007


2006


2005(Dollars in thousands)Statutory reserves

$
251,853


$
167,291


$
87,175Reinsurance recoverables on unpaid losses


136,012



96,258



51,229GAAP reserves

$
387,865


$
263,549


$
138,404  23




---



##### Table of Contents



Reconciliation
    of Reserves for Losses and LAE
  2007


2006


2005(Dollars in thousands)Gross reserves balance at January 1,

$
263,549


$
138,404


$
47,207Less reinsurance recoverables on unpaid losses


(96,258
)


(51,229
)


(15,572
)Net reserves balance at January 1,


167,291



87,175



31,635Add acquired gross reserves


449







6,693Less reinsured acquired gross reserves


(449
)






(6,693
)Net reserve balance


167,291



87,175



31,635Incurred losses and LAE, net of reinsurance, related to:Current period


115,064



90,879



58,640Prior periods


(13,786
)


(2,260
)


(34
)Total incurred


101,278



88,619



58,606Paid losses and LAE, net of reinsurance, related to:Current period


4,717



2,272



1,284Prior periods


11,999



6,231



1,782Total paid


16,716



8,503



3,066Net reserve balance at December 31,


251,853



167,291



87,175Plus reinsurance recoverables on unpaid losses


136,012



96,258



51,229Gross reserves balance at December 31,

$
387,865


$
263,549


$
138,404   Ceded
    Premium Adjustments for Prior Periods Reduction in
    Estimated Incurred Losses and LAE
  agreed-upon
  CededPremiumAdjustment


Accident Year Ending December 31,Calendar Year

Amount


2006


2005


2004


2003(Dollars in thousands)2005

$
293


$



$



$



$
2932006


1,700











1,259



4412007


7,406



741



5,005



1,659



1Totals

$
9,399


$
741


$
5,005


$
2,918


$
735  24




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##### Table of Contents



Asbestos,
    Environmental Impairment and Mold Claims Reserves
    Sub-prime
    Lending Claims and Exposure
      Competition
    Ratings
    A Guide
    to Bests
 25




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##### Table of Contents



Financial Strength Ratings
    Evolution
    and Subsidiaries
      Employees
    Available
    Information on the Internet
  1-800-SEC-0330. http://www.darwinpro.com. Form 10-K, Form 10-Q, Form 8-K
 26




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##### Table of Contents



State
    Regulation
  General
      Required
    Licensing
           27




---



##### Table of Contents



Insurance
    holding company laws
    Payment
    of dividends
  General.
  Delaware.
  Arkansas.
   28




---



##### Table of Contents



Change
    of control
        Statutory
    accounting principles
      Guaranty
    association assessments
   29




---



##### Table of Contents



Insurance
    Regulatory Information System
      Risk-based
    capital
    Market
    conduct examinations
    Financial
    examinations
   30




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##### Table of Contents



Insurance
    reserves
    Regulation
    of investments
    Federal
    Regulation
  General
    Terrorism
    Risk Insurance Program Reauthorization Act of 2007
    USA
    PATRIOT Act and OFAC
   31




---



##### Table of Contents



ITEM 1A.
    Risk
    Factors.  Risks
    Related to Our Business
  Form 10-K,
  We
    have a limited operating and financial history, and our
    historical financial results may not accurately or reliably
    predict our future performance.
    A
    decline in our financial strength ratings could cause us to lose
    substantially all of our business.
    We do
    not have employment agreements or non-competition agreements
    with most of our key management personnel, and if we lose key
    personnel or are unable to recruit qualified personnel, our
    ability to implement our business strategies could be delayed or
    hindered.
     32




---



##### Table of Contents



If we
    are unable to underwrite risks accurately and to charge adequate
    rates to policyholders, our financial condition and results of
    operations could be adversely affected.
      Our
    actual incurred losses and LAE may be greater than our loss and
    LAE reserves, which could have a material adverse effect on our
    financial condition and results of operations.
    We
    currently rely on certain Alleghany subsidiaries to write some
    of the insurance policies that we produce, and a termination of
    our arrangements with them could have an adverse effect on our
    business, financial condition and results of
    operations.
   33




---



##### Table of Contents



If we
    are not able to renew our existing reinsurance or obtain new
    reinsurance or if we were to increase our retention levels in
    premiums written, either our net exposures would increase or we
    would have to reduce the level of our underwriting commitment,
    both of which could increase the volatility of our revenues and
    negatively impact our results of operations.
      If our
    reinsurers do not pay claims made by us in a timely fashion, our
    business, financial condition and results of operations could be
    materially adversely affected.
    If our
    reinsurance contracts did not pass the transfer of risk
    provisions of FAS 113, we would be required to restate our
    financial results.
   34




---



##### Table of Contents



If our
    relationship with one of our larger distribution partners were
    terminated, our financial condition and results of operations
    could be materially adversely affected.
    If a
    program administrator were to exceed its underwriting authority
    or otherwise breach obligations owed to us, we could be
    materially adversely affected.
    We
    rely heavily on our information technology and telecommunication
    systems, both generally and in connection with i-bind; failure
    of these systems could materially and adversely affect our
    business.
  i-bind
  Our
    investment results and, therefore, financial condition and
    results of operations, may be materially adversely impacted by
    changes in the business, financial condition or operating
    results of the entities in which we invest, as well as changes
    in interest rates, government monetary policies, general
    economic conditions and overall capital market
    conditions.
   35




---



##### Table of Contents



and/or
      As a
    holding company and underwriting manager, we are dependent on
    the results of operations of our insurance company subsidiaries,
    and we rely upon the regulatory and financial capacity of our
    subsidiaries to pay dividends to us. The inability of our
    subsidiaries to pay dividends to us in sufficient amounts could
    harm our ability to meet our obligations.
    Payment of
    Dividends
 36




---



##### Table of Contents



If we
    are unable to raise additional capital in the future, whether on
    favorable terms or at all, we may not have sufficient funds to
    implement our operating plans, and our business, financial
    condition or results of operations could be materially adversely
    affected.
    Litigation
    and legal proceedings against our insurance company subsidiaries
    could have an adverse effect on our financial condition and
    results of operations.
    If we
    acquire other insurance businesses and are unable to integrate
    them successfully with our business, our financial condition and
    results of operations could be materially adversely
    affected.
     37




---



##### Table of Contents



Our
    capital adequacy requirements could negatively affect our return
    on equity for a long time. In addition, if we are unable to grow
    into our capital base as quickly as we anticipate, our return on
    equity could be negatively affected.
    Risks
    Related to Our Industry
  Our
    business is cyclical in nature, which may affect our financial
    performance.
      Some
    of our competitors have greater financial resources than we
    have, or have more market recognition than we do, and, we may
    not be successful in competing effectively with
    them.
     38




---



##### Table of Contents



We are
    subject to extensive regulation, which may adversely affect our
    ability to achieve our business objectives. In addition, if we
    fail to comply with regulations, we may be subject to penalties,
    including fines and suspensions, which may adversely affect our
    results of operations.
      The
    effects of emerging claim and coverage issues on our business
    are uncertain and could materially adversely affect our
    business, financial condition and results of
    operations.
    The
    passage of tort reform and the subsequent review of such laws by
    the courts could have a material impact on our
    operations.
   39




---



##### Table of Contents



Risks
    Related to Our Corporate Structure
  We are
    a majority-owned subsidiary of Alleghany and the ownership of
    our shares is highly concentrated. A future sale of all or a
    substantial portion of Alleghanys shares of our common
    stock, or the possibility of such future sales, could adversely
    affect the market price of our common stock.
    Alleghany
    has significant control over us and may not always exercise its
    control in a way that benefits the other security holders. Also,
    conflicts of interest that may arise between us and Alleghany
    could be resolved in a manner unfavorable to us.
       40




---



##### Table of Contents



Because
    Alleghany, through certain of its insurance company
    subsidiaries, engages in some of the same lines of specialty
    insurance that we write, our ability to successfully operate and
    expand our business may be adversely affected.
    We are
    a controlled company within the meaning of the NYSE
    rules and qualify for exemptions from certain corporate
    governance requirements. As a result, our stockholders are not
    afforded all of the same protections as stockholders of
    companies that are subject to all of the corporate governance
    requirements of the Exchange.
    ITEM 1B.
    Unresolved
    Staff Comments.  12/31/06 Form 10-K.
  ITEM 2.
    Properties    ITEM 3.
    Legal
    Proceedings   41




---



##### Table of Contents



ITEM 4.
    Submission
    of Matters to a Vote of Security Holders.   PART II  ITEM 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities.  Shares and Stockholders:
    Price
    Range of Common Stock
    Quarter Ended

High


Low


Close20065/19/2006  6/30/2006

$
20.12


$
16.00


$
17.66Third Quarter 2006

$
23.50


$
17.75


$
22.21Fourth Quarter 2006

$
25.29


$
20.61


$
23.452007First Quarter 2007

$
27.16


$
22.25


$
25.15Second Quarter 2007

$
27.50


$
26.84


$
25.17Third Quarter 2007

$
26.84


$
19.06


$
21.60Fourth Quarter 2007

$
26.50


$
21.33


$
24.17  42




---



##### Table of Contents



Performance
    Graph
    COMPARISON
    OF CUMULATIVE TOTAL RETURN
  
  Indexed ReturnsBase








Quarter EndingPeriodCompany/Index


5/19/06


6/30/06


9/30/06


12/31/06


3/31/07


6/30/07


9/30/07


12/31/07Darwin Professional Underwriters, Inc.



100




110.37




138.81




146.56




157.19




157.31




135.00




151.06S&P 500 Index



100




100.38




106.06




113.17




113.89




121.04




123.50




119.39S&P Property & Casualty Insurance Index



100




98.50




105.17




112.34




106.93




112.67




106.27




96.65     Dividend
    Policy
  33-for-two
   43




---



##### Table of Contents



Initial
    Public Offering and Repurchase of Preferred Stock
     44




---



##### Table of Contents



ITEM 6.
    Selected
    Financial Data.  Form 10-K.
    PeriodMarch 3, 2003Year Ended December 31,


to December 31,2007


2006


2005


2004


2003(Dollars in thousands, except per share amounts)Revenues:Net premiums earned

$
180,900


$
132,378


$
84,698


$
46,092


$
4,115Net investment income


22,574



16,442



4,920



949



11Net realized investment gains (losses)


(28
)


12



(176
)


1



Other income










14







Total revenues


203,446



148,832



89,456



47,042



4,126Costs and expenses:Losses and loss adjustment expenses


101,278



88,619



58,606



29,628



2,683Commissions and brokerage expenses


22,618



14,609



9,191



6,167



504Other underwriting, acquistion and operating expenses


28,286



21,603



14,574



10,221



4,488Other expenses


5,857



750



1,102



904



Total costs and expenses


158,039



125,581



83,473



46,920



7,675Earnings before income taxes


45,407



23,251



5,983



122



(3,549
)Income tax expense


13,165



7,286



2,276



74



(1,219
)Net earnings

$
32,242


$
15,965


$
3,707


$
48


$
(2,330
)Underwriting ratios:Loss ratio(1)


56.0
%


66.9
%


69.2
%


64.3
%


65.2
%Commissions and brokerage expense ratio(2)


12.5
%


11.0
%


10.9
%


13.4
%


12.2
%Other underwriting, acquistion and operating expense ratio(3)


15.6
%


16.3
%


17.2
%


22.2
%


109.1
%Total expense ratio(4)


28.1
%


27.4
%


28.1
%


35.6
%


121.3
%Combined ratio(5)


84.1
%


94.3
%


97.3
%


99.9
%


186.5
%Basic earnings per share:Net earnings per share

$
1.96


$
1.38


$
0.56


$
0.01


$
(0.35
)Weighted average shares outstanding


16,424,448



9,770,268



6,600,000



6,600,000



6,600,000Diluted earnings per share:Net earnings per share

$
1.89


$
0.95


$
0.46


$
0.01


$
(0.35
)Weighted average shares outstanding


17,071,505



16,785,721



8,119,370



8,167,500



6,600,000  45




---



##### Table of Contents



As of December 31,2007


2006


2005


2004


2003(Dollars in thousands)Balance sheet data:Cash and investments

$
564,407


$
426,256


$
315,113


$
86,832


$
12,640Reinsurance recoverables on paid and unpaid losses


136,370



96,371



51,260



15,572



990All other assets


126,358



112,637



81,225



47,199



15,117Total assets

$
827,135


$
635,264


$
447,598


$
149,603


$
28,747Loss and loss adjustment expense reserves

$
387,865


$
263,549


$
138,404


$
47,207


$
3,485Unearned premium reserves


141,126



123,796



88,280



54,274



18,791All other liabilities


43,971



30,069



21,391



12,514



6,695Total liabilities


572,962



417,414



248,075



113,995



28,971Series A Preferred Stock










2,106



2,106



2,106Total stockholders equity


254,173



217,850



197,417



33,502



(2,330
)Total liabilities and stockholders equity

$
827,135


$
635,264


$
447,598


$
149,603


$
28,747     (1)
    
    Loss ratio is calculated by dividing total incurred losses and
    loss adjustment expenses by net premiums earned.(2)
    
    Commissions and brokerage expense ratio is calculated by
    dividing total commissions and brokerage expenses by net
    premiums earned.(3)
    
    Other underwriting, acquisition and operating expense ratio is
    calculated by dividing total other underwriting, acquisition and
    operating expenses by net premiums earned.(4)
    
    Total expense ratio is the sum of the commissions and brokerage
    expense ratio and the other underwriting, acquisition and
    operating expense ratio.(5)
    
    Combined ratio is the sum of the loss ratio and the total
    expense ratio. 46




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The following discussion and analysis of our financial
    condition and results of operations should be read in
    conjunction with the audited consolidated financial statements
    and accompanying notes included herein. Some of the information
    contained in this discussion and analysis or set forth elsewhere
    in this
    Form 10-K
    constitutes forward-looking statements that involve risks and
    uncertainties. Please see Note on Forward-Looking
    Statements for a discussion of important factors that
    could cause actual results to differ materially from the results
    described in or implied by the forward-looking statements
    contained herein.
  Note on
    Forward Looking Statements
    higher-than-anticipated and/or and/or
    Our
    History
   47




---



##### Table of Contents



Our
    Corporate Reorganization
        33-for-two Form S-1
  33-for-two
 48




---



##### Table of Contents



Our
    Consolidated Financial Information
      Critical
    Accounting Estimates
  Loss and Loss Adjustment Expense (LAE)
    Reserves.
           49




---



##### Table of Contents



The Bornhuetter-Ferguson (B-F)
    methodology.
          The Expected Loss Ratio
    methodology.
    and/or
 50




---



##### Table of Contents




    Are at 12 months of maturity when evaluated on
    12/31/04.
    The B-F indications would receive 0% weighting.
    Are at 36 months of maturity when evaluated on
    12/31/06.
    The B-F indications would receive 30% weighting.
    Are at 72 months of maturity when evaluated on
    12/31/09.
    The B-F indication would receive 100% weighting.               51




---



##### Table of Contents



and/or
         52




---



##### Table of Contents



Gross
    Loss and LAE Reserves
  At December 31, 2007


At December 31, 2006Statutory Line of Business

Case


IBNR


ULAE


Total


Case


IBNR


ULAE


Total(Dollars in thousands)Other liability, claims-made

$
27,020


$
204,768


$
5,884


$
237,672


$
17,779


$
135,938


$
3,931


$
157,648Other liability, occurrence


20



4,114



110



4,244







1,725



47



1,772Medical malpractice liability,
    claims-made


20,382



119,787



5,331



145,500



15,334



84,952



3,843



104,129Private passenger auto liabilty(1)


300



149







449















Total

$
47,722


$
328,818


$
11,325


$
387,865


$
33,113


$
222,615


$
7,821


$
263,549Percentage of total gross reserves


12.3
%


84.8
%


2.9
%


100.0
%


12.6
%


84.4
%


3.0
%


100.0
%   Loss and
    LAE Reserves, Net of Reinsurance
  At December 31, 2007


At December 31, 2006Statutory Line of Business

Case


IBNR


ULAE


Total


Case


IBNR


ULAE


TotalOther liability, claims-made

$
22,329


$
123,333


$
5,848


$
151,510


$
14,653


$
82,887


$
3,895


$
101,435Other liability, occurrence


20



3,102



110



3,232







1,364



47



1,411Medical malpractice liability, claims-made


16,976



74,804



5,331



97,111



12,556



48,046



3,843



64,445Private passenger auto liabilty(1)






























Total

$
39,325


$
201,239


$
11,289


$
251,853


$
27,209


$
132,297


$
7,785


$
167,291Percentage of total net reserves


15.6
%


79.9
%


4.5
%


100.0
%


16.3
%


79.0
%


4.7
%


100.0
%     (1)
    
    Private passenger auto liability reserves are gross outstanding
    reserves from the acquisition of Vantapro. These reserves are
    100% ceded to Firemans Fund, the former parent of Vantapro.       53




---



##### Table of Contents



Pre-Tax
  Change in LossDevelopment / Emergence5% Average





5% AverageChange in Expected Loss and LAE Ratio

Decrease


No Change


Increase(Dollars in thousands)5 percentage point increase

$
5,430


$
24,823


$
42,277No change


(17,842
)






16,2905 percentage point decrease


(41,502
)


(24,823
)


(10,084
)   After-Tax
    (Assumes a 35% tax rate)
  Change in LossDevelopment / Emergence5% Average





5% AvergeChange in Expected Loss and LAE Ratio

Decrease


No Change


Increase(Dollars in thousands)5 percentage point increase

$
3,530


$
16,135


$
27,480No change


(11,597
)






10,5895 percentage point decrease


(26,976
)


(16,135
)


(6,555
)   The results summarized above assume no benefit of
    reinsurance. The effect of Darwins reinsurance program on
    the scenarios reflected above would depend on the nature of the
    loss activity that generated a change in loss
    development/emergence. Darwins reinsurance program is
    predominantly excess of loss in structure and will respond to
    the occurrence of individual large losses (severity). If the
    changes were produced by a large number (frequency) of small
    losses, the reinsurance would not respond and the scenario
    results would be unchanged.
    Reinsurance and Reinsurance
    Recoverables. case-by-case
 54




---



##### Table of Contents



Accounting for Reinsurance
 55




---



##### Table of Contents



Investment Valuation.
         56




---



##### Table of Contents



and/or
  Deferred Taxes.
      Intangible Assets. Goodwill
    and Other Intangible Assets
   57




---



##### Table of Contents



10-K.
  Consolidated
    Results of Operations
    Year Ended December 31,


% Change


% Change2007


2006


2005


2007 vs 2006


2006 vs 2005(Dollars in thousands)Insurance Revenues:Gross premiums written

$
280,283


$
246,252


$
165,824



13.8
%


48.5
%Ceded premiums written


(80,554
)


(89,248
)


(65,174
)


(9.7
)%


36.9
%Net premiums written


199,729



157,004



100,650



27.2
%


56.0
%Increase in unearned premiums


(18,829
)


(24,626
)


(15,952
)


(23.5
)%


54.4
%Net premiums earned


180,900



132,378



84,698



36.7
%


56.3
%Net investment income


22,574



16,442



4,920



37.3
%


234.2
%Realized investment gains (losses)


(28
)


12



(176
)


(333.3
)%


(106.8
)%Other income










14




*


(100.0
)%Total revenues


203,446



148,832



89,456



36.7
%


66.4
%Costs and Expenses:Losses and loss adjustment expenses incurred


101,278



88,619



58,606



14.3
%


51.2
%Commissions and brokerage expenses


22,618



14,609



9,191



54.8
%


58.9
%Other underwriting, acquisition and operating expenses


28,286



21,603



14,574



30.9
%


48.2
%Other expenses


5,857



750



1,102



680.9
%


(31.9
)%Total costs and expenses


158,039



125,581



83,473



25.8
%


50.4
%Earnings before income taxes


45,407



23,251



5,983



95.3
%


288.6
%Income tax expense


13,165



7,286



2,276



80.7
%


220.1
%Net earnings

$
32,242


$
15,965


$
3,707



102.0
%


330.7
%   58




---



##### Table of Contents



Change


Change2007 vs 2006


2006 vs 2005Underwriting ratios to net premiums earned:Loss ratio(1)


56.0
%


66.9
%


69.2
%


(10.9
)%


(2.3
)%Commissions and brokerage expense ratio(2)


12.5
%


11.1
%


10.9
%


1.4
%


0.2
%Other underwriting, acquisition and operating expense ratio(3)


15.6
%


16.3
%


17.2
%


(0.7
)%


(0.9
)%Total expense ratio(4)


28.1
%


27.4
%


28.1
%


0.7
%


(0.7
)%Combined ratio(5)


84.1
%


94.3
%


97.3
%


(10.2
)%


(3.0
)%Net premiums written/gross premiums written


71.3
%


63.8
%


60.7
%


7.5
%


3.1
%Net premiums earned/net premiums written


90.6
%


84.3
%


84.2
%


6.3
%


0.1
%     *
    
    Denotes not meaningful  (1)
    
    Loss ratio is calculated by dividing total incurred losses
    and loss adjustment expenses by net premiums earned.(2)
    
    Commissions and brokerage expense ratio is calculated by
    dividing total commissions and brokerage expenses by net
    premiums earned.(3)
    
    Other underwriting, acquisition and operating expense ratio
    is calculated by dividing total other underwriting, acquisition
    and operating expenses by net premiums earned.(4)
    
    Total expense ratio is the sum of the commissions and
    brokerage expense ratio and the other underwriting, acquisition
    and operating expense ratio.(5)
    
    Combined ratio is the sum of the loss ratio and the total
    expense ratio.  Year-end
    December 31, 2007 Compared to Year- end December 31,
    2006
  Net earnings.
  Gross premiums written.
   59




---



##### Table of Contents



Ceded premiums written.
  Net premiums written.
  Net premiums earned.
  Net investment income and realized investment gains
    (losses).
 60




---



##### Table of Contents



Losses and LAE incurred.
  Commissions and brokerage
    expenses.
  Other underwriting, acquisition and operating
    expenses.
    Other expenses.
 61




---



##### Table of Contents



Income tax expense.
  Year-end
    December 31, 2006 Compared to Year end December 31,
    2005
  Net earnings.
  Gross premiums written.
       62




---



##### Table of Contents



Ceded premiums written.
  Net premiums written.
  Net premiums earned.
  Net investment income and realized investment gains
    (losses).
  Losses and LAE incurred.
  Commissions and brokerage
    expenses.
 63




---



##### Table of Contents



Other underwriting, acquisition and operating
    expenses.
    Other expenses.
  Income tax expense.
  Liquidity
    and Capital Resources
  DPUI
    Only
  General.
 64




---



##### Table of Contents



Dividends.
        Credit Agreements.
   65




---



##### Table of Contents



Darwin
    Consolidated Financial Position
  Capital Resources.
  Capital Transactions.
        Book Value Per Common Share.
  Cash Flows.
   66




---



##### Table of Contents



Year EndedDecember 31,2007


2006(Dollars in thousands)Cash flows from operating activities

$
127,358


$
108,283Cash flows used in investing activities


(152,077
)


(91,967
)Cash flows from financing activities


5,315



302Net increase (decrease) in cash

$
(19,404
)

$
16,618Net paid losses and loss adjustment expenses

$
16,716


$
8,503   Investment Securities.
  Contractual Obligations.
  More Than


More Than1 Year But


3 Years But


More ThanContractual Obligations

Total


Within 1 Year


Within 3 Years


Within 5 Years


5 Years(Dollars in thousands)Operating lease obligations

$
3,664


$
1,036


$
2,199


$
429


$
Other long-term liabilities reflected on consolidated balance
    sheet under GAAP(1)


8,245



2,473



4,520



1,188



64Debt


5,000







5,000







Loss and LAE reserves


387,865



100,680



187,610



38,829



60,746Total

$
404,774


$
104,189


$
199,329


$
40,446


$
60,810     (1)
    
    Other long-term liabilities primarily reflect Darwins LTIP
    obligations.   67




---



##### Table of Contents



Investments.
    December 31, 2007


December 31, 2006Fair





FairValue


%


Value


%(Dollars in thousands)Equity securities:Preferred stock

$
3,680



0.7
%

$




Fixed maturities securities:U.S. Government and government agencies


41,359



7.4
%


22,239



5.6
%State and municipal


219,533



39.4
%


129,743



32.5
%Mortgage/asset-backed securities


126,124



22.7
%


106,615



26.7
%Corporate and other


58,645



10.5
%


71,249



17.8
%Total fixed maturities


445,661



80.0
%


329,846



82.6
%Short term investments


107,597



19.3
%


69,537



17.4
%Total investments

$
556,938



100.0
%

$
399,383



100.0
%     At December 31,2007

2006Book yield on all investments


4.59
%


4.92
%Tax-equivalent yield on all investments


5.32
%


5.53
%      68




---



##### Table of Contents



For the Year EndedDecember 31,2007

2006Return on total investments


6.24
%


5.72
%Lehman Intermediate Aggregate Bond Index


7.02
%


4.58
%       December 31,


December 31,Financial



2007


2006Strength

NAIC

Fair


%


Fair


%Ratings (1)

Designation

Value


Total


Value


Total(Dollars in thousands)AAA

1

$
334,787



75.2
%

$
233,228



70.7
%AA+

1


25,543



5.7
%


11,603



3.5
%AA

1


26,584



6.0
%


21,278



6.5
%AA−

1


12,539



2.8
%


10,180



3.1
%A+

1


8,043



1.8
%


13,379



4.0
%A

1


19,185



4.3
%


18,865



5.7
%A−

1


11,528



2.6
%


17,403



5.3
%BBB+

2


5,972



1.3
%


3,415



1.0
%BBB

2


1,480



0.3
%


495



0.2
%Total fixed maturities



$
445,661



100.0
%

$
329,846



100.0
%     (1)
    
    Ratings are the lowest rating assigned by Standard &
    Poors, a division of The McGraw-Hill Companies, Inc., or
    Moodys Investors Service. Where a rating is not available
    from either rating agency, ratings are determined by other
    independent sources.    69




---



##### Table of Contents



At December 31,


At December 31,2007


2006Fair





FairValue


%


Value


%(Dollars in thousands)Due in one year or less

$
5,507



1.2
%

$
7,106



2.2
%Due after one year through five years


114,152



25.6
%


67,565



20.5
%Due after five years through ten years


77,578



17.4
%


32,003



9.7
%Due after ten years


122,300



27.5
%


116,557



35.3
%Mortgage backed securities


126,124



28.3
%


106,615



32.3
%Total fixed maturities

$
445,661



100.0
%

$
329,846



100.0
%     Impairments
    of Investment Securities
     70




---



##### Table of Contents



December 31, 2007Less Than 12 Months


12 Months or More


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedType of investment

Value


Loss


Value


Loss


Value


Loss(Dollars in thousands)Equities:Preferred stock

$
3,680


$
(320
)

$



$



$
3,680


$
(320
)Fixed maturities:U.S. Government bonds


1,390



(1
)


1,008



(1
)


2,398



(2
)State and municipal bonds


11,336



(83
)


5,055



(22
)


16,391



(105
)Mortgage/asset-backed securities


34,331



(345
)


6,171



(104
)


40,502



(449
)Corporate bonds and notes


6,571



(102
)


2,987



(47
)


9,558



(149
)Total fixed maturities


53,628



(531
)


15,221



(174
)


68,849



(705
)Total equities and fixed maturies

$
57,308


$
(851
)

$
15,221


$
(174
)

$
72,529


$
(1,025
)       and/or
 71




---



##### Table of Contents



MarketValue ofRating of

UnderlyingRating of Insurance Company*

Underlying

Securities


Gain/LossS&P

Moodys

Fitch

Security

at 12/31/07


at 12/31/07AMBAC Financial Group

AA**

Aa2**

AA**

AA−

$
22,631


$
366FGIC Corporation

BBB**

Ba1**

AA**

AA


25,957



145Financial Security Assurance, Inc.

AAA

Aaa

AAA

AA−


43,603



598MBIA, Inc.

AA−

Aa3**

AA**

AA−


30,069



223XL Capital, LTD.

A−

Baa1

A

A+


2,134



12Subtotal







AA−


124,394



1,344Total Investments









$
556,938


$
3,630% of Total Investments










22.3
%


37.0
%     *
    
    Credit rating as of February 27, 2008.**
    
    Credit rating is currently on an agency watchlist with potential
    negative implications.  Recent
    Accounting Standards
  05-1, Accounting by Insurance Enterprises for Deferred Acquisition
    Costs in Connection with Modifications or Exchanges of Insurance
    Contracts (SOP 05-1). SOP 05-1 Accounting and Reporting by
    Insurance Enterprises for Certain Long-Duration Contracts and
    for Realized Gains and Losses from the Sale of Investments. SOP 05-1 SOP 05-01
  Accounting for Certain Hybrid Instruments, an amendment to
    FASB Statement No. 133 and 140.
 72




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes. Accounting for
    Income Taxes.
  Fair
    Value Measurements
  The Fair Value
    Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 Fair Value
    Measurements
  Business Combinations
  Non-controlling
    Interests in Consolidated Financial Statements
  Off-balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.  and/or
 73




---



##### Table of Contents



Sensitivity
    Analysis at
    At December 31, 2007
  Interest Rate Shifts (in basis points)

−300


−200


−100


0


100


200


300Fixed Maturities SecuritiesPortfolio value

$
509,391


$
487,866


$
466,830


$
445,661


$
424,180


$
403,679


$
381,931Change


63,730



42,205



21,169







(21,481
)


(41,982
)


(63,730
)% Change


14.30
%


9.47
%


4.75
%


0.00
%


(4.82
)%


(9.42
)%


(14.30
)%   Item 8.
    Financial
    Statements and Supplementary Data.  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Disclosure
    Controls and Procedures
  Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  Form 10-K
 74




---



##### Table of Contents



Change in
    Internal Control over Financial Reporting
  Rule 13a-15(d) Rule 15d-15(d)
  NYSE CEO
    Certification
    Item 9B.
    Other
    Information.   75




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance of the
    Registrant.    Form 10-K. www.darwinpro.com
  ITEM 11.
    Executive
    Compensation.    ITEM 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    ITEM 13.
    Certain
    Relationships and Related Transactions and Director
    Independence.    ITEM 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statements Schedules.    (a) Financial Statements and
    Schedules: Form 10-K.
  (b) Exhibits: Form 10-K.
 76




---



##### Table of Contents



SIGNATURES      By
    /s/  Stephen
    J. Sills,  
      By       By
    /s/  Phillip
    N. Ben-Zvi       By
    /s/  Christopher
    K. Dalrymple       By
    /s/  Michael
    E. Hanrahan       77




---



##### Table of Contents



By
    /s/  William
    C. Popik       By
    /s/  George
    M. Reider, Jr.       By
    /s/  John
    L. Sennott, Jr.        By
    /s/  Stephen
    J. Sills        By
    /s/  James
    P. Slattery       By
    /s/  Irving
    B. Yoskowitz      78




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES   
 Description

PageReports of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2007 and 2006


F-4Consolidated Statements of Operations for the
    years ended December 31, 2007, 2006, and 2005


F-5Consolidated Statements of Changes in
    Stockholders Equity and Comprehensive Income (Loss) for
    the years ended December 31, 2007, 2006, and 2005


F-6Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006, and 2005


F-7Notes to Consolidated Financial Statements


F-8SCHEDULE:Schedule I  Summary of
    Investments Other Than Investments in Related Parties


S-1Schedule II  Condensed Financial
    Information of Registrant


S-2Schedule III  Supplementary
    Insurance Information


S-5Schedule IV  Reinsurance


S-6Schedule V  Valuation and
    Qualifying Accounts


S-7Schedule VI  Supplemental
    Information Concerning Property-Casualty Insurance Operation


S-8   F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           Internal Control 
    Integrated Framework
  
     F-2




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
     Internal Control  Integrated
    Framework Controls and
    Procedures Form 10-K.
        Internal Control  Integrated Framework
    
    F-3




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Consolidated Balance Sheets
 December 31, 2007 and 2006
  2007


2006(Dollars in thousands, except per share amounts)ASSETS:Available for sale securities, at fair value:Equity securities (cost: 2007, $4,000)

$
3,680


$
Fixed maturities (amortized cost: 2007, $439,748; 2006, $328,201)


445,661



329,846Short-term investments, at cost which approximates fair value


107,597



69,537Total investments


556,938



399,383Cash


7,469



26,873Premiums receivable (net of allowance for doubtful accounts of
    $75 as of December 31, 2007 and 2006)


30,986



31,094Reinsurance recoverable on paid and unpaid losses


136,370



96,371Ceded unearned reinsurance premiums


43,244



44,742Deferred insurance acquisition costs


13,814



12,724Property and equipment at cost, less accumulated depreciation


1,783



1,895Intangible assets


7,455



7,306Net deferred income tax asset


13,546



8,720Other assets


15,530



6,156Total assets

$
827,135


$
635,264LIABILITIES AND STOCKHOLDERS EQUITY:Loss and loss adjustment expense reserves

$
387,865


$
263,549Unearned premium reserves


141,126



123,796Reinsurance payable


20,999



21,385Debt


5,000



Current income taxes payable


1,155



865Accrued expenses and other liabilities


16,817



7,819Total liabilities


572,962



417,414Commitments and Contingencies (Note 24)Stockholders equity(Notes 1(b), 11, and 12):Common stock; $0.01 par value. Authorized
    50,000,000 shares; issued and outstanding
    17,025,501 shares at December 31, 2007 and
    17,047,222 shares at December 31, 2006


170



170Additional paid-in capital


204,583



203,095Retained earnings


45,790



13,548Accumulated other comprehensive income


3,630



1,037Total stockholders equity


254,173



217,850Total liabilities and stockholders equity

$
827,135


$
635,264    F-4




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
 Consolidated
    Statements of Operations
    For the years ended December 31, 2007, 2006, and
    2005  2007


2006


2005(Dollars in thousands, except per share amounts)Revenues:Net premiums earned

$
180,900


$
132,378


$
84,698Net investment income


22,574



16,442



4,920Net realized investment gains (losses)


(28
)


12



(176
)Other income










14Total revenues


203,446



148,832



89,456Costs and expenses:Losses and loss adjustment expenses


101,278



88,619



58,606Commissions and brokerage expenses


22,618



14,609



9,191Other underwriting, acquisition and operating expenses


28,286



21,603



14,574Other expenses


5,857



750



1,102Total costs and expenses


158,039



125,581



83,473Earnings before income taxes


45,407



23,251



5,983Income tax expense


13,165



7,286



2,276Net earnings

$
32,242


$
15,965


$
3,707Basic earnings per share:Net earnings per share

$
1.96


$
1.38


$
0.56Weighted average shares outstanding


16,424,448



9,770,268



6,600,000Diluted earnings per share:Net earnings per share

$
1.89


$
0.95


$
0.46Weighted average shares outstanding


17,071,505



16,785,721



8,119,370    F-5




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
 Consolidated
    Statements of Changes in Stockholders Equity and
    Comprehensive Income (Loss) 
    For the years ended December 31, 2007, 2006, and
    2005  2007


2006


2005(Dollars in thousands)Common stock:Balance at beginning of year

$
170


$
81


$
81Exchange of common stock for Series A Preferred Stock






(66
)


Issuance of common stock






60



Conversion of Series B Preferred Stock






94



Issuance of restricted common stock


1



1



Forfeiture of restricted common stock


(1
)






Balance at end of year

$
170


$
170


$
81Additional paid-in capital:Balance at beginning of year

$
203,095


$
195,950


$
35,710Capital contributions










160,240Exchange of common stock for Series A Preferred Stock






66



Contribution of Darwin Group, Inc. in exchange for Series B
    Convertible Preferred Stock






(195,992
)


Issuance of common stock, net of issuance costs






86,228



Conversion of Series B Preferred Stock






115,558



Stock-based compensation


1,173



984



Tax benefit on stock compensation plans


291



302



Proceeds from exercise of stock options


24







Issuance of restricted common stock


(1
)


(1
)


Forfeiture of restricted common stock


1







Balance at end of year


204,583



203,095



195,950Retained earnings (deficit):Balance at beginning of year

$
13,548


$
1,425


$
(2,282
)Exchange of common stock for Series A Preferred Stock






(191
)


Contribution of Darwin Group, Inc. in exchange for Series B
    Convertible Preferred Stock






(1,186
)


Series C Preferred Stock dividend






(2,465
)


Net earnings


32,242



15,965



3,707Balance at end of year

$
45,790


$
13,548


$
1,425Accumulated other comprehensive income (loss):Accumulated other comprehensive income (loss) at beginning of
    year

$
1,037


$
(39
)

$
(7
)Other comprehensive income (loss):Unrealized appreciation (depreciation) of investments, net of tax


2,593



1,076



(32
)Other comprehensive income (loss)


2,593



1,076



(32
)Accumulated other comprehensive income (loss) at end of year

$
3,630


$
1,037


$
(39
)Total stockholders equity at December 31,

$
254,173


$
217,850


$
197,417Comprehensive income (loss):Net earnings

$
32,242


$
15,965


$
3,707Other comprehensive income (loss)


2,593



1,076



(32
)Total comprehensive income

$
34,835


$
17,041


$
3,675    F-6




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Consolidated
    Statements of Cash Flows
 For the
    years ended December 31, 2007, 2006, and 2005
  2007


2006


2005(Dollars in thousands)Cash flows provided by (used for) operating activities:Net earnings

$
32,242


$
15,965


$
3,707Adjustments to reconcile net earnings to net cash provided by
    (used for) operating activities:Deferred insurance acquisition costs


(27,846
)


(20,724
)


(13,730
)Amortization of insurance acquisition costs


26,756



15,603



12,087Deferred income taxes


(6,181
)


(3,050
)


(3,551
)Depreciation and amortization


670



601



422Net realized investment losses (gains)


28



(12
)


176Stock-based compensation


1,173



984



Gain on the sale of fixed assets










(14
)Amortization of investment discounts and premiums


(2,426
)


(3,883
)


(1,601
)Change in:Premiums receivable


108



(9,004
)


(8,323
)Reinsurance recoverable on paid and unpaid losses


(39,550
)


(45,111
)


(35,688
)Ceded unearned reinsurance premiums


1,498



(10,889
)


(18,055
)Current income taxes payable/receivable


292



1,148



(1,638
)Other assets


(9,215
)


(4,035
)


2,105Loss and loss adjustment expense reserves


123,867



125,145



91,197Unearned premium reserves


17,330



35,516



34,006Reinsurance payable


(386
)


10,465



3,908Accrued expenses and other liabilities


8,998



(436
)


4,057Net cash provided by operating activities


127,358



108,283



69,065Cash flows provided by (used for) investing activities:Proceeds from sales of available-for-sale securities


120,332



21,688



11,490Maturities of available-for-sale securities


38,960



12,687



15,989Purchases of available-for-sale securities


(269,451
)


(242,320
)


(80,484
)Purchases of equity securities


(4,000
)






Net sales (purchases) of short-term investments


(34,074
)


119,023



(146,452
)Due (from) to brokers for unsettled trades


(130
)


(2,216
)


2,216Purchases of fixed assets


(558
)


(616
)


(1,292
)Proceeds from sales of fixed assets










26Acquisition of insurance companies, net of cash acquired


(3,156
)


(213
)


(25,575
)Net cash used for investing activities


(152,077
)


(91,967
)


(224,082
)Cash flows provided by (used for) financing activities:Proceeds from debt


5,000







Tax benefit on restricted stock vested


291



302



Proceeds from issuance of common stock- employee stock options


24







Proceeds from issuance of common stock






96,000



Issuance costs






(9,712
)


Redemption of Series A Preferred Stock






(2,297
)


Redemption of Series C Preferred Stock






(2,465
)


Redemption of Series B Convertible Preferred Stock






(81,526
)


Proceeds from capital contributions










160,240Net cash provided by financing activities


5,315



302



160,240Net increase (decrease) in cash


(19,404
)


16,618



5,223Cash, beginning of period


26,873



10,255



5,032Cash, end of period

$
7,469


$
26,873


$
10,255Supplemental disclosures of cash flow information:Cash paid for federal and state income taxes

$
18,762


$
8,907


$
7,376    F-7




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and SubsidiariesNotes to Consolidated Financial StatementsFor the years ended December 31, 2007, 2006, and
    2005
    (Dollars in thousands except per share amounts),
  (1)
    Organization  (a)
    Organization               F-8




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
      (b)
    Reorganization        33-for-two Form S-1
  33-for-two
    (2)
    Summary
    of Significant Accounting Policies  (a)
    Basis
    of Presentation    (b)
    Investments
    and Fair Values of Financial Instruments   F-9




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
            (c)
    Cash    (d)
    Premiums
    and Unearned Premium Reserves    (e)
    Reinsurance
    Recoverables   F-10




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Accounting for Reinsurance
  (f)
    Deferred
    Insurance Acquisition Costs    (g)
    Property
    and Equipment    Computer equipment

3 yearsComputer software

5 yearsFurniture and fixtures

5 yearsLeasehold improvements

Shorter of useful life or life of lease     (h)
    Intangible
    Assets  Goodwill and Other Intangible Assets
    (i)
    Income
    Taxes   F-11




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
      (j)
    Loss
    and Loss Adjustment Expense Reserves    (k)
    Comprehensive
    Income (Loss)  Reporting
    Comprehensive Income available-for-sale.
  (l)
    Segments  Disclosure About
    Segments of an Enterprise and Related Information
 F-12




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  (m)
    Estimates    (n)
    Statutory
    Accounting Practices    (o)
    Earnings
    Per Share of Common Stock    (p)
    Recent
    Accounting Standards  05-1, Accounting by Insurance Enterprises for Deferred Acquisition
    Costs in Connection with Modifications or Exchanges of Insurance
    Contracts (SOP 05-1). SOP 05-1 Accounting and Reporting by
    Insurance Enterprises for Certain Long-Duration Contracts and
    for Realized Gains and Losses from the Sale of Investments. SOP 05-1 SOP 05-01
  Accounting for Certain Hybrid Instruments, an amendment to
    FASB Statement No. 133 and 140.
  Accounting for Uncertainty in Income Taxes.
 F-13




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Accounting for Income
    Taxes.
  Fair
    Value Measurements
  The Fair Value
    Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 Fair Value
    Measurements
  Business Combinations
  Non-controlling
    Interests in Consolidated Financial Statements
  (3)
    Purchase
    Accounting  Business
    Combinations.
 F-14




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Business Combinations.
    (4)
    Investments    Cost or


Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value2007Type of investmentEquity securities:Preferred stock

$
4,000


$



$
(320
)

$
3,680Fixed maturities securities:U.S. Government and government agencies


40,473



888



(2
)


41,359State and municipal


216,114



3,524



(105
)


219,533Mortgage/asset-backed securities


125,501



1,072



(449
)


126,124Corporate and other


57,660



1,134



(149
)


58,645Total fixed maturities


439,748



6,618



(705
)


445,661Short term investments


107,597











107,597Total investments

$
551,345


$
6,618


$
(1,025
)

$
556,938   F-15




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Cost or


Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value2006Type of investmentFixed maturities securities:U.S. Government and government agencies

$
22,349


$
50


$
(160
)

$
22,239State and municipal


127,960



1,900



(117
)


129,743Mortgage/asset-backed securities


106,473



411



(269
)


106,615Corporate and other


71,419



138



(308
)


71,249Total fixed maturities


328,201



2,499



(854
)


329,846Short term investments


69,537











69,537Total investments

$
397,738


$
2,499


$
(854
)

$
399,383     Amortized


FairCosts


ValueDue in one year or less

$
5,503


$
5,507Due after one year through five years


112,228



114,152Due after five years through ten years


76,095



77,578Due after ten years


120,421



122,300Mortgage backed securities


125,501



126,124Total fixed maturities

$
439,748


$
445,661   available-for-sale other-than-temporary.
 F-16




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    December 31, 2007Less Than 12 Months


12 Months or More


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedType of investment

Value


Loss


Value


Loss


Value


Loss(Dollars in thousands)Equities:Preferred stock

$
3,680


$
(320
)

$



$



$
3,680


$
(320
)Fixed maturities:U.S. Government bonds


1,390



(1
)


1,008



(1
)


2,398



(2
)State and municipal bonds


11,336



(83
)


5,055



(22
)


16,391



(105
)Mortgage/asset-backed securities


34,331



(345
)


6,171



(104
)


40,502



(449
)Corporate bonds and notes


6,571



(102
)


2,987



(47
)


9,558



(149
)Total fixed maturities


53,628



(531
)


15,221



(174
)


68,849



(705
)Total equities and fixed maturies

$
57,308


$
(851
)

$
15,221


$
(174
)

$
72,529


$
(1,025
)   December 31, 2006Less Than 12 Months


12 Months or More


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedType of investment

Value


Loss


Value


Loss


Value


Loss(Dollars in thousands)Fixed maturities:U.S. Government bonds


390



(9
)


9,145



(151
)


9,535



(160
)State and municipal bonds


18,543



(87
)


1,917



(30
)


20,460



(117
)Mortgage/asset-backed securities


49,799



(235
)


1,631



(34
)


51,430



(269
)Corporate bonds and notes


34,172



(234
)


4,156



(74
)


38,328



(308
)Total fixed maturities


102,904



(565
)


16,849



(289
)


119,753



(854
)   other-than-temporarily
 F-17




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2007


2006


2005Realized gains (losses):Gross gains

$
18


$
38


$
1Gross losses


(46
)


(26
)


(177
)Net realized gains (losses)

$
(28
)

$
12


$
(176
)Change in unrealized gains (losses)

$
3,948


$
1,707


$
(51
)Less effect of taxes


(1,355
)


(631
)


19Change in net unrealized gains (losses)

$
2,593


$
1,076


$
(32
)     2007


2006Unrealized gains (losses):Gross unrealized gains

$
6,618


$
2,499Gross unrealized losses


(1,025
)


(854
)Net realized gains (losses)


5,593



1,645Less effect of taxes


(1,963
)


(608
)Net unrealized gains (losses)

$
3,630


$
1,037     2007


2006


2005Fixed maturies

$
22,141


$
11,776


$
4,088Short-term


1,066



5,302



985Dividend income


104







Gross investment income


23,311



17,078



5,073Investment expenses


737



636



153Net investment income

$
22,574


$
16,442


$
4,920     (5)
    Reinsurance  (a)
    Ceded   F-18




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
           F-19




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    TotalCompanyRetention atProduct Lines

MaximumPolicy

Reinsurance

Description of

Maximum LimitTreaty

Covered

Limits Offered

Coverage

Company Retention

OfferedProfessional Lines(1)

Commercial, Healthcare and FI D&O, FI E&O and
    Shortline Railroad General Liability

$20 million per claim for A-Side D&O;  $15 million per
    claim for Healthcare D&O; and $10 million per claim for all
    other classes

$18 million excess of $2 million per claim for A-Side D&O;
    $13 million excess of $2 million for Healthcare D&O;  $8
    million excess of $2 million per claim for all other classes

First $2 million per claim;  25% of the next $3 million of loss
    per claim; 15% of the next $10 million of loss per claim; and
    10% of the next $5 million of loss per claim

$4.75 million per claim for A-Side D&O;  $4.25 million per
    claim for Healthcare D&O; and $3.5 million per claim for
    all other classesProfessional Lines(1)

Private and Non-Profit D&O, E&O (Technology E&O,
    Lawyers Professional E&O for law firms with fewer than 100
    lawyers, Insurance Agents E&O, Insurance Company E&O,
    Miscellaneous Professional E&O, and Media)

$15 million per claim for Private and Non-Profit D&O and
    Insurance Agents E&O; and $10 million per claim for all
    other classes

$14 million excess of $1 million per claim for Private and Non-
    Profit D&O and Insurance Agents E&O; $9 million excess
    of $1 million per claim for all other classes

First $1 million per claim;  25% of the next $4 million of loss
    per claim; and 15% of the next $10 million of loss per claim

$3.5 million per claim for Private and Non-Profit D&O and
    Insurance Agents E&O; $2.75 million per claim for all other
    classesManaged Care E&O(1)

Managed Care E&O

$20 million per claim for Managed Care E&O

$18 million excess of  $2 million per claim

First $2 million per claim;  25% of the next $3 million of loss
    per claim; 15% of the next $5 million of loss per claim; and 10%
    of the next $10 million of loss per claim

$4.5 million per claimMedical Malpractice(1)

Physicians, Hospitals

$16 million per claim

$10 million excess of $1.0 million per claim

First $1 million per claim; 15% of loss in excess of $1 million
    per claim

$2.5 million per claimPsychiatrists

Psychiatrists Professional Liability

$2 million per claim

$1.5 million excess of  $0.5 million per claim

$0.5 million per claim

$0.5 million per claimPsychologists

Psychologists E&O Liability

$2 million per claim

$1.50 million excess of  $0.5 million per claim

$0.5 million per claim

$0.5 million per claimPublic Entity(1)

Municipal Entity and Public Officials, Police and Governmental
    Employees E&O

$5 million per claim

$4.7 million excess of $0.3 million per claim

First $0.3 million per claim;  15% of $1 million in excess of $1
    million per claim; 10% of $3 million in excess of $2 million per
    claim

$0.75 million per claim     (1)
    
    Caps or aggregate limits apply to various layers of coverage as
    set forth in each reinsurance contract. F-20




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
       2007


2006Reinsurance recoverables on paid losses

$
358


$
113Ceded outstanding case losses and LAE


8,397



5,904Ceded outstanding IBNR losses and LAE


127,615



90,354Gross reinsurance recoverables on paid and unpaid losses

$
136,370


$
96,371       (b)
    Reinsurance
    Ceded and Assumed with the Capitol Companies         F-21




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (c)
    Reinsurance
    Effect on Operations    Year Ended December 31,2007


2006


2005Net Premiums Written:Direct premiums written

$
236,741


$
179,776


$
23,354Assumed premiums written  Capitol Companies


42,860



65,763



142,470Assumed premiums written


682



713



Ceded premiums written


(80,554
)


(89,248
)


(65,174
)Net premiums written

$
199,729


$
157,004


$
100,650Net Premiums Earned:Direct premiums earned

$
210,051


$
101,615


$
11,021Assumed premiums earned  Capitol Companies


52,200



108,684



120,799Assumed premiums earned


703



436



Ceded premiums earned


(82,054
)


(78,357
)


(47,122
)Net premiums earned

$
180,900


$
132,378


$
84,698Net Losses and LAE Incurred:Direct losses and LAE incurred

$
132,553


$
68,073


$
11,400Assumed losses and LAE incurred  Capitol Companies


11,686



65,531



84,856Assumed losses and LAE incurred


439



290



Ceded losses and LAE incurred


(43,400
)


(45,275
)


(37,650
)Net losses and LAE incurred

$
101,278


$
88,619


$
58,606      F-22




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (6)
    Deferred
    Insurance Acquisition Costs    2007


2006


2005Balance at beginning of the year

$
12,724


$
7,603


$
5,960Insurance acquisition costs deferred:Commissions and brokerage expenses


21,708



16,045



10,078Other underwriting, acquisition and operating expenses


6,138



4,679



3,652Total insurance acquisition costs deferred


27,846



20,724



13,730Amortization of insurance acquisition costs


(26,756
)


(15,603
)


(12,087
)Net Change for year


1,090



5,121



1,643Balance at end of the year

$
13,814


$
12,724


$
7,603   (7)
    Property
    and Equipment, Net    2007


2006Computer hardware and software

$
2,768


$
2,246Furniture and fixtures


567



548Leasehold improvements


317



301Property and equipment, at cost


3,652



3,095Accumulated depreciation


(1,869
)


(1,200
)Property and equipment, net

$
1,783


$
1,895    F-23




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  (8)
    Loss and
    Loss Adjustment Expense Reserves    2007


2006


2005Gross reserves balance at January 1,

$
263,549


$
138,404


$
47,207Less reinsurance recoverables on unpaid losses


(96,258
)


(51,229
)


(15,572
)Net reserves balance at January 1,


167,291



87,175



31,635Add acquired gross reserves


449







6,693Less resinured acquired gross reserves


(449
)






(6,693
)Net reserve balance


167,291



87,175



31,635Incurred losses and LAE, net of reinsurance, related to:Current period


115,064



90,879



58,640Prior periods


(13,786
)


(2,260
)


(34
)Total incurred


101,278



88,619



58,606Paid losses and LAE, net of reinsurance, related to:Current period


4,717



2,272



1,284Prior periods


11,999



6,231



1,782Total paid


16,716



8,503



3,066Net reserve balance at December 31,


251,853



167,291



87,175Plus reinsurance recoverables on unpaid losses


136,012



96,258



51,229Gross reserves balance at December 31,

$
387,865


$
263,549


$
138,404      F-24




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (9)
    Credit
    Facility Debt      (10)
    Income
    Taxes     F-25




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2007


2006


2005Current expense:Federal expense

$
20,036


$
9,458


$
5,017State expense (benefit)


(690
)


906



772Total current expense


19,346



10,364



5,789Deferred benefit:Federal deferred benefit


(6,709
)


(2,786
)


(2,967
)State deferred benefit (expense)


528



(292
)


(546
)Total deferred benefit


(6,181
)


(3,078
)


(3,513
)Income tax expense

$
13,165


$
7,286


$
2,276       2007


2006


2005Dollars


Percent


Dollars


Percent


Dollars


PercentFederal income tax and rate

$
15,891



35
%

$
8,138



35
%

$
2,094



35
%Tax effect of:Municipal bond income, net of proration


(2,634
)


(5.8
)%


(1,275
)


(5.5
)%


(181
)


(3.0
)%State income taxes, net of federal effect


(105
)


(0.2
)%


399



1.7
%


203



3.4
%Other


(14
)


(0.1
)%


(11
)






119



2.0
%Nondeductible expenses


27



0.1
%


35



0.1
%


68



1.1
%Changes in estimate of future year taxes


















(27
)


(0.5
)%Effective income tax and rate

$
13,165



29.0
%

$
7,286



31.3
%

$
2,276



38.0
%  F-26




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2007


2006Deferred tax assets:Discounting of loss and LAE reserves

$
9,788


$
6,736Unearned premium reserves


6,930



5,842Accrued expenses


3,631



1,192Stock-based compensation expenses


913



392Allowance for doubtful accounts


32



30Other


30



46Total deferred tax assets


21,324



14,238Deferred tax liabilities:Deferred insurance acquisition costs


4,879



4,274Tax depreciation adjustment


55



253Purchase licenses and fees


549



383Net unrealized gains on investment securities


1,963



608Other


332



Total deferred tax liabilities


7,778



5,518Net deferred tax asset

$
13,546


$
8,720     (11)
    Preferred
    Stock  Classification and Measurement of
    Redeemable Securities
 F-27




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
          2007


2006


2005Series A Preferred Stock:Balance at beginning of year

$



$
2,106


$
2,106Exchange of common stock for Series A Preferred Stock






191



Redemption of Series A Preferred Stock






(2,297
)


Balance at end of year

$



$



$
2,106Series B Convertible Preferred Stock:Balance at beginning of year

$



$



$
Exchange Darwin Group, Inc. common stock for Series B
    Convertible Preferred Stock






197,178



Redemption of Series B Convertible Preferred Stock






(81,526
)


Conversion of Series B Convertible Preferred Stock to
    common stock






(115,652
)


Balance at end of year

$



$



$
Series C Preferred Stock:Balance at beginning of year

$



$



$
Issuance of Series C Preferred Stock






2,465



Redemption of Series C Preferred Stock






(2,465
)


Balance at end of year

$



$



$
    F-28




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
  (12)
    Capital
    Stock      Form S-3 Form S-3
  (13)
    Share-Based
    Compensation      (a)
    2003
    Restricted Stock Plan   F-29




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
        Year Ended December 31,2007


2006


2005Unvested restricted shares outstanding at beginning of year


897,188



1,505,625



1,546,875Granted






144,375



Vested


(752,813
)


(752,812
)


Forfeited


(61,875
)






(41,250
)Unvested restricted shares at end of year


82,500



897,188



1,505,625     (b)
    2006
    Stock Incentive Plan     F-30




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2007


2006Expected life (years)


6.25



6.25Expected volatility


30.4



30.4Expected dividend yield






Range of risk-free interest rate


4.60-4.72
%


5.18
%Weighted-average fair value per option

$
10.24


$
6.64       Stock Options


Restricted StockWeighted-





Weighted-Average





AverageExercise





VestingOptions


Price


Shares


ValueOutstanding at January 1, 2006














Granted


170,060


$
16.00



4,816


$
22.69Forfeited


(6,054
)

$
16.00







Outstanding at December 31, 2006


164,006


$
16.00



4,816


$
22.69Granted


100,019


$
25.37



40,382


$
25.37Options exercised or restricted stock vested


(1,500
)

$
16.00







Forfeited


(8,317
)

$
21.27



(1,903
)

$
25.30Outstanding at December 31, 2007


254,208


$
19.51



43,295


$
25.07     (c)
    2006
    Employees Restricted Stock Plan   F-31




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (d)
    Directors
    Plan    Initial Public Offering Restricted Stock
    Grant
  Annual Non-Employee Directors Share Unit
    Award
 F-32




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Share Units


Restricted StockWeighted-AverageShare Unit





VestingShares


Value


Shares


ValueOutstanding at January 1, 2006














Granted


16,719


$
16.00



12,500


$
16.00Outstanding at December 31, 2006


16,719


$
16.00



12,500


$
16.00Granted


11,207


$
25.89







Shares distributed in payment of units


(1,700
)

$
16.00







Restricted stock vested










(11,600
)

$
16.00Forfeited


(956
)

$
16.00



(900
)

$
16.00Outstanding at December 31, 2007


25,270


$
20.38






$
16.00     (14)
    Earnings
    per Share    Year Ended December 31,2007


2006


2005(Dollars in thousands, except per share data)Net earning

$
32,242


$
15,965


$
3,707Less dividend declared and paid on Series B Preferred Stock






(2,465
)


Net earnings-numerator for basic earning per share

$
32,242


$
13,500


$
3,707Add back dividend declared and paid on Series B Preferred
    Stock






2,465



Net earnings-numerator for diluted earning per share

$
32,242


$
15,965


$
3,707Pro forma weighted average common shares outstanding 
    denomin for basic earnings per share


16,424,448



9,770,268



6,600,000Effect of dilutive securities:Series B Convertible Preferred Stock






5,711,538



Restricted stock


610,912



1,297,056



1,519,370Options


18,361







Share units


17,784



6,859



Pro forma weighted average common shares outstanding 
    denomina for dilutive earnings per share


17,071,505



16,785,721



8,119,370Basic earnings per share

$
1.96


$
1.38


$
0.56Dilutive earnings per share

$
1.89


$
0.95


$
0.46  F-33




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
        (15)
    Comprehensive
    Income    Year Ended December 31,2007


2006


2005Net earnings

$
32,242


$
15,965


$
3,707Other comprehensive income (loss):Add (deduct) unrealized gains (losses) on investments, net of
    taxes


2,575



1,084



(146
)Reclassification adjustment for losses (gains) earnings, net of
    taxes


18



(8
)


114Unrealized gains (losses) on investment


2,593



1,076



(32
)Total comprehensive income

$
34,835


$
17,041


$
3,675     (16)
    Concentration
    in Revenue     F-34




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (17)
    Related
    Party Transactions          (18)
    Employee
    Benefit Plan    (19)
    Long-Term
    Incentive Plan   F-35




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
        (20)
    Concentration
    of Credit Risk    (21)
    Fair
    Value of Financial Instruments    2007


2007


2006


2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueAssets:Investments

$
556,938


$
556,938


$
399,383


$
399,383Liabilities:Debt outstanding

$
5,000


$
5,000


$



$
   Disclosures
    about Fair Value of Financial Instruments
    Investments:
  Debt outstanding:
 F-36




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
   (22)
    Segments        Year Ended December 31,2007


2006


2005Gross premiums written:Directors and Officers

$
38,737


$
40,626


$
32,926Errors and Omissions


140,013



111,039



58,867Medical Malpractice Liability


100,783



94,587



74,031General Liability


750







Total

$
280,283


$
246,252


$
165,824Gross premiums earned:Directors and Officers

$
39,751


$
37,993


$
28,444Errors and Omissions


128,665



87,805



46,231Medical Malpractice Liability


94,337



84,937



57,145General Liability


201







Total

$
262,954


$
210,735


$
131,820   (23)
    Statutory
    Reporting     F-37




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
            (24)
    Commitments
    and Contingencies  Darwin leases its office space.
 F-38




---



##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2007Fiscal year ending:2008

$
1,0362009


1,1192010


1,0792011


4302012 and there after


Total lease payments for all future years

$
3,664       (25)
    Selected
    Quarterly Financial Data (Unaudited)    Total2007 Quarters


2007First


Second


Third


Fourth


Year(Dollars in thousands, except per share amounts)Net earned premiums

$
39,997


$
46,378


$
45,453


$
49,072


$
180,900Net investment income


5,239



5,441



5,812



6,082



22,574Realized investment gains (losses)






17



(43
)


(2
)


(28
)Total revenues

$
45,236


$
51,836


$
51,222


$
55,152


$
203,446Net earnings

$
5,220


$
7,752


$
8,361


$
10,909


$
32,242Earnings per share:Basic

$
0.32


$
0.48


$
0.51


$
0.65


$
1.96Diluted

$
0.31


$
0.45


$
0.49


$
0.64


$
1.89   Total2006 Quarters


2006First


Second


Third


Fourth


YearNet earned premiums

$
27,304


$
31,954


$
34,971


$
38,149


$
132,378Net investment income


3,360



3,763



4,512



4,807



16,442Realized investment gains (losses)


(10
)


(3
)


(11
)


36



12Total revenues

$
30,654


$
35,714


$
39,472


$
42,992


$
148,832Net earnings

$
2,788


$
3,377


$
4,006


$
5,794


$
15,965Earnings per share:Basic

$



$
0.13


$
0.25


$
0.36


$
1.38Diluted

$
0.17


$
0.10


$
0.23


$
0.34


$
0.95  F-39




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##### Table of Contents



Darwin
    Professional Underwriters, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements 
    (Continued)
    (26)
    Subsequent
    Events   F-40




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##### Table of Contents



SCHEDULE I



Darwin Professional Underwriters, Inc. and Subsidiaries

Summary of Investments-Other Than

Investments in Related Parties

December 31, 2007  Amount atWhich ShownFair


in the BalanceCost


Value


Sheet(Dollars in thousands)Type of investmentEquity securities:Preferred stocks

$
4,000


$
3,680


$
3,680Fixed maturities:U.S. Government bonds and government agencies


40,473



41,359



41,359State and municipal bonds


216,114



219,533



219,533Mortgage/asset-backed Securities


125,501



126,124



126,124Corporate bonds and notes


57,660



58,645



58,645Total fixed maturities


439,748



445,661



445,661Short-term Investments


107,597



107,597



107,597Total Investments

$
551,345


$
556,938


$
556,938  S-1




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##### Table of Contents



SCHEDULE II
    Darwin Professional Underwriters, Inc.
    Condensed Balance Sheets
    of the Registrant
    December 31, 2007 and 2006  2007


2006(Dollars in thousands)AssetsCash

$
6,217


$
19,190Premiums receivable (net of allowance for doubtful accounts of
    $75 as of December 31, 2007 and 2006)


3,740



10,592Property and equipment at cost, less accumulated depreciation


1,783



1,895Other assets


11,409



18,769Investment in subsidiaries


245,177



213,959Total assets

$
268,326


$
264,405Liabilities and Stockholders EquityPayable to insurance companies

$
8,019


$
40,084Debt


5,000



Other liabilities


1,134



6,471Total liabilities


14,153



46,555Stockholders equity


254,173



217,850Total liabilities and stockholders equity

$
268,326


$
264,405    S-2




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##### Table of Contents



SCHEDULE II
  Darwin Professional Underwriters, Inc.
 Condensed Statements of Operations
 of the Registrant
 For the years ended December 31, 2007, 2006 and 2005
  2007


2006


2005(Dollars in thousands)Revenues:Net commission revenue

$
40,585


$
33,838


$
28,394Net investment income


3,744



502



340Other income










14Total revenues


44,329



34,340



28,748Costs and Expenses:Commissions and brokerage expenses


7,555



11,534



11,984Other underwriting, acquisition and operating expenses


27,173



21,423



13,992Other expenses


5,857



750



1,103Total costs and expenses


40,585



33,707



27,079Operating earnings


3,744



633



1,669Equity in earnings of consolidated subsidiaries


41,663



22,618



4,314Earnings from continuing operations, before income taxes


45,407



23,251



5,983Income tax expense


13,165



7,286



2,276Net earnings

$
32,242


$
15,965


$
3,707    S-3




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##### Table of Contents



SCHEDULE II
  Darwin Professional Underwriters, Inc.
 Condensed Statements of Cash Flows
 of the Registrant
 For the years ended December 31, 2007, 2006 and 2005
   2007


2006


2005(Dollars in thousands)Cash flows provided by (used for) operating activities:Net earnings

$
32,242


$
15,965


$
3,707Adjustments to reconcile net earnings to net cash provided by
    (used for) operating activities:Equity in undistributed net (earnings) losses of consolidated
    subsidiaries


(28,625
)


(15,744
)


(2,758
)Stock-based compensation


1,173



984



Depreciation and amortization


670



601



422Gain on the sale of fixed assets










(14
)Change in:Premiums receivable


6,852



1,602



(18
)Other assets


7,360



(2,567
)


(6,979
)Payable to insurance companies


(32,065
)


5,921



5,239Accrued expenses and other liabilities


(5,337
)


1,828



1,243Net cash provided by (used for) operating activities


(17,730
)


8,590



842Cash flows provided by (used for) investing activities:Purchases of fixed assets


(558
)


(616
)


(1,292
)Proceeds from sales of fixed assets










26Net cash provided by (used for) investing activities


(558
)


(616
)


(1,266
)Cash flows provided by (used for) financing activities:Proceeds from Debt


5,000







Tax benefit on restricted stock vested


291



302



Proceeds from issuance of common stock- employee stock options


24







Proceeds from issuance of common stock






96,000



Issuance costs






(9,712
)


Redemption of Series A Preferred Stock






(2,297
)


Payment of Series C Preferred Stock






(2,465
)


Redemption of Series B Convertible Preferred Stock






(81,526
)


Net cash provided by (used for) financing activities


5,315



302



Net increase (decrease) in cash


(12,973
)


8,276



(424
)Cash, beginning of period


19,190



10,914



11,338Cash, end of period

$
6,217


$
19,190


$
10,914Supplemental disclosures of cash flow information:Cash paid for federal and state income taxes

$
18,762


$
5,874


$
4,572  S-4




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##### Table of Contents



SCHEDULE III



Darwin Professional Underwriters, Inc. and Subsidiaries

Supplementary Insurance Information  At December 31,


For the Year Ended December 31,Future Policy














Benefits,Benefits,





Other Policy








Claims,Deferred Policy


Losses,


Gross


Claims and





Net


Losses andAcquisition


Claims and


Unearned


Benefits


Net Earned


Investment


SettlementYear


Line of Business

Costs


Loss Expenses


Premiums


Payable


Premiums


Income


Expenses(Dollars in thousands)2007


Property and Casualty Insurance

$
13,814


$
387,865


$
141,126


$



$
180,900


$
22,574


$
101,2782006


Property and Casualty Insurance


12,724



263,549



123,796


$




132,378



16,442



88,6192005


Property and Casualty Insurance


7,603



138,404



88,280


$




84,698



4,920



58,606   At December 31,Amortizationof Deferred





CommissionsPolicy


Other


and


NetAcquisition


Operating


Brokerage


PremiumsYear


Line of Business

Costs


Expenses


Expenses


Written2007


Property and Casualty Insurance

$
26,756


$
1,530


$
22,618


$
199,7292006


Property and Casualty Insurance


15,603



6,000



14,609



157,0042005


Property and Casualty Insurance


12,087



2,487



9,191



100,650  S-5




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##### Table of Contents



SCHEDULE IV
    Darwin Professional Underwriters, Inc. and Subsidiaries
    Reinsurance
    For the years ended December 31, 2007, 2006, and
    2005  Assumed





PercentageCeded to


from





of AmountGross


Other


Other


Net


AssumedYear


Line of Business

Amount (1)


Companies


Companies


Amount


to Net(Dollars in thousands)2007


Property and Casualty

$
279,601


$
80,554


$
682


$
199,729



0.3
%2006


Property and Casualty


245,539



89,248



713



157,004



0.5
%2005


Property and Casualty


165,481



65,174



343



100,650



0.3
%     (1)
    
    Gross amount include direct and assumed premiums written by DNA,
    DSI and the Capitol Companies. S-6




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##### Table of Contents



SCHEDULE V



Darwin
    Professional Underwriters, Inc. and Subsidiaries
    Valuation and Qualifying Accounts  Charged to


Charged toBalance at


Costs and


Other


Deductions


Balance atYear


Description

January 1,


Expenses


Accounts


Describe


December 31,(Dollars in thousands)2007


Allowance for uncollectible reinsurance recoverables

$



$



$



$



$
Allowance for uncollectible premiums receivable


75















752006


Allowance for uncollectible reinsurance recoverables


















Allowance for uncollectible premiums receivable


50



25











752005


Allowance for uncollectible reinsurance recoverables


















Allowance for uncollectible premiums receivable


50















50  S-7




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##### Table of Contents



SCHEDULE VI
    Darwin Professional Underwriters, Inc. and Subsidiaries
    Supplementary Information Concerning
    Insurance Operations  At December 31,


For the Year Ended December 31,Discount, ifany,Reserves for


Deducted inUnpaid


Reserves forDeferred


Claims and


Unpaid ClaimsPolicy


Claim


and Claim


GrossAcquisition


Adjustment


Adjustment


Unearned


Net Earned


Net InvestmentYear


Line of Business

Costs


Expenses


Expenses


Premiums


Premiums


Income(Dollars in thousands)2007


Property and Casualty Insurance

$
13,814


$
387,865


$



$
141,126


$
180,900


$
22,5742006


Property and Casualty Insurance


12,724



263,549







123,796



132,378



16,4422005


Property and Casualty Insurance


7,603



138,404







88,280



84,698



4,920   At December 31,Claims and ClaimsAdjustment ExpensesAmortizationof Deferred


Paid ClaimsPolicy


and ClaimCurrent





Acquisition


Adjustment


Net PremiumsYear


Line of Business

Year


Prior Year


Costs


Expenses


Written2007


Property and Casualty Insurance

$
115,064


$
(13,786
)

$
26,756


$
16,716


$
199,7292006


Property and Casualty Insurance


90,879



(2,260
)


15,603



8,503



157,0042005


Property and Casualty Insurance


58,640



(34
)


12,087



3,066



100,650  S-8




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##### Table of Contents



LIST OF
    EXHIBITS
  ExhibitNumber

Description of Exhibit3
.1

Amended and Restated Certificate of Incorporation, filed as
    Exhibit 3.1 to Darwin Professional Underwriters Inc.s
    Quarterly Report on Form 10-Q filed on November 7, 2006, is
    incorporated herein by reference.3
.2

Amended and Restated By-laws, filed as Exhibit 3.2 to Amendment
    No. 4 to Darwin Professional Underwriters, Inc.s
    Registration Statement on Form S-1 (Reg. No. 333-132355) filed
    on May 16, 2006 (Amendment No. 4 to the Form S-1),
    is incorporated herein by reference.4
.1

Specimen Stock Certificate, filed as Exhibit 4.1 to Amendment
    No. 4 to the Form S-1, is incorporated herein by reference.4
.2

Registration Rights Agreement by and between Darwin Professional
    Underwriters, Inc. and Alleghany Insurance Holdings LLC, filed
    as Exhibit 4.1 to Darwin Professional Underwriters Inc.s
    Current Report on Form 8-K filed on May 23, 2006, is
    incorporated herein by reference.4
.3

Master Agreement by and between Darwin Professional
    Underwriters, Inc. and Alleghany Corporation, filed as Exhibit
    4.2 to Darwin Professional Underwriters Inc.s Current
    Report on Form 8-K filed on May 23, 2006, is incorporated herein
    by reference.10
.1

Amended and Restated Employment Agreement dated November 11,
    2005 between Darwin Professional Underwriters, Inc. and Stephen
    J. Sills, filed as Exhibit 10.1 to Darwin Professional
    Underwriters, Inc.s Registration Statement on Form S-1
    (Reg. No. 333-132355) filed on March 10, 2006 (the Form
    S-1) is incorporated herein by reference.10
.2

Amended and Restated Employment Agreement dated November 11,
    2005 between Darwin Professional Underwriters, Inc. and Mark I.
    Rosen, filed as Exhibit 10.2 to the Form S-1, is incorporated
    herein by reference.10
.3.1

Investment Management Agreement dated July 1, 2004 by and
    between General Re-New England Asset Management and Alleghany
    Corporation, filed as Exhibit 10.3.1 to Amendment No. 1 to
    Darwin Professional Underwriters, Inc.s Registration
    Statement on Form S-1 (Reg. No. 333-132355) filed on April 17,
    2006 (Amendment No. 1 to the Form S-1), is
    incorporated herein by reference.10
.3.2

Amendment No. 1 dated June 1, 2005 to Investment Management
    Agreement dated July 1, 2004 by and between General Re-New
    England Asset Management and Alleghany Corporation, filed as
    Exhibit 10.3.2 to Amendment No. 1 to the Form S-1, is
    incorporated herein by reference.10
.4

Contribution and Exchange Agreement dated November 11, 2005 by
    and among Alleghany Insurance Holdings LLC, Darwin Group, Inc.
    and Darwin Professional Underwriters, Inc, filed as Exhibit 10.4
    to Amendment No. 1 to the Form S-1, is incorporated herein by
    reference.10
.5

Amended and Restated Restricted Stock Plan of Darwin
    Professional Underwriters, Inc. effective as of November 11,
    2005, filed as Exhibit 10.5 to the Form S-1, is incorporated
    herein by reference.10
.6

Amended and Restated Long-Term Incentive Plan of Darwin
    Professional Underwriters, Inc. effective as of November 11,
    2005, filed as Exhibit 10.6 to the Form S-1, is incorporated
    herein by reference.10
.7

Amended Tax Sharing Agreement dated January 1, 2005 by and
    between Alleghany Insurance Holdings LLC and Darwin Professional
    Underwriters, Inc, filed as Exhibit 10.7 to the Form S-1, is
    incorporated herein by reference.10
.8

2006 Darwin Professional Underwriters, Inc. Stock Incentive
    Plan, filed as Exhibit 10.1 to Darwin Professional Underwriters
    Inc.s Current Report on Form 8-K filed on May 23, 2006, is
    incorporated herein by reference.10
.9

Darwin Professional Underwriters, Inc. Stock and Unit Plan for
    Non-Employee Directors, as amended by the Board of Directors,
    effective as of  January 25, 2007, filed as Exhibit 10.9 to the
    Darwin Professional Underwriters, Inc. Annual Report on Form
    10-K filed February 28, 2007, is incorporated herein by
    reference.10
.10.1

Program Administrator Agreement effective as of October 1, 2004
    between American Professional Agency, Inc., Darwin Professional
    Underwriters, Inc., Darwin National Assurance Company, Platte
    River Insurance Company and Capitol Specialty Insurance
    Corporation, filed as Exhibit 10.10 to Amendment No. 1 to the
    Form S-1, is incorporated herein by reference. S-9




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.10.2

Amendment to Program Administrator Agreement effective as of
    October 1, 2004 between American Professional Agency, Inc.,
    Darwin Professional Underwriters, Inc., Darwin National
    Assurance Company, Platte River Insurance Company and Capitol
    Specialty Insurance Corporation, filed as Exhibit 10.10.1 to
    Amendment No. 1 to the Form S-1, is incorporated herein by
    reference.10
.11

Program Administrator Agreement effective as of September 15,
    2005 between Professional Underwriters and Darwin Professional
    Underwriters, Inc, filed as Exhibit 10.11 to Amendment No. 1 to
    the Form S-1, is incorporated herein by reference.10
.12

Underwriting Management Agreement effective as of December 12,
    2003 by and between Platte River Insurance Corporation and the
    Darwin Professional Underwriters, Inc, filed as Exhibit 10.12 to
    the Form S-1, is incorporated herein by reference.10
.13

Underwriting Management Agreement effective as of June 1, 2003
    by and between Capitol Indemnity Corporation and Darwin
    Professional Underwriters, Inc, filed as Exhibit 10.13 to the
    Form S-1, is incorporated herein by reference.10
.14

Underwriting Management Agreement effective as of June 1, 2003
    by and between Capitol Specialty Insurance Corporation and
    Darwin Professional Underwriters, Inc, filed as Exhibit 10.14 to
    the Form S-1, is incorporated herein by reference.10
.15

Underwriting Management Agreement effective as of July 15, 2004
    by and between Darwin National Assurance Company and Darwin
    Professional Underwriters, Inc, filed as Exhibit 10.15 to the
    Form S-1, is incorporated herein by reference.10
.16

Underwriting Management Agreement effective as of May 5, 2005 by
    and between Darwin Select Insurance Company and Darwin
    Professional Underwriters, Inc, filed as Exhibit 10.16 to the
    Form S-1, is incorporated herein by reference.10
.17.1

Reinsurance Agreement effective as of July 1, 2004 between
    Capitol Indemnity Corporation and Darwin National Assurance
    Company, filed as Exhibit 10.17 to the Form S-1, is incorporated
    herein by reference.10
.17.2

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2004 between Capitol Indemnity
    Corporation and Darwin National Assurance Company, filed as
    Exhibit 10.17.1 to Amendment No. 4 to the Form S-1, is
    incorporated herein by reference.10
.18.1

Reinsurance Agreement effective as of July 1, 2004 between
    Capitol Specialty Insurance Corporation and Darwin National
    Assurance Company, filed as Exhibit 10.18 to the Form S-1, is
    incorporated herein by reference.10
.18.2

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2004 between Capitol Specialty
    Insurance Corporation and Darwin National Assurance Company,
    filed as Exhibit 10.18.1 to Amendment No. 4 to the Form S-1, is
    incorporated herein by reference.10
.19.1

Reinsurance Agreement effective as of July 1, 2005 by and among
    Capitol Indemnity Corporation and Darwin National Assurance
    Company, filed as Exhibit 10.19.1 to the Form S-1, is
    incorporated herein by reference.10
.19.2

Amendment effective as of October 1, 2005 to Reinsurance
    Agreement effective as of July 1, 2005 by and among Capitol
    Indemnity Corporation and Darwin National Assurance Company,
    filed as Exhibit 10.19.2 to the Form  S-1, is incorporated
    herein by reference.10
.19.3

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2005 between Capitol Indemnity
    Corporation and Darwin National Assurance Company, filed as
    Exhibit 10.19.3 to Amendment No. 4 to the Form S-1, is
    incorporated herein by reference.10
.20.1

Reinsurance Agreement effective as of July 1, 2005 by and among
    Capitol Specialty Insurance Corporation and Darwin National
    Assurance Company, filed as Exhibit 10.20.1 to the Form S-1, is
    incorporated herein by reference.10
.20.2

Amendment effective as of October 1, 2005 to Reinsurance
    Agreement effective as of July 1, 2005 by and among Capitol
    Specialty Insurance Corporation and Darwin National Assurance
    Company, filed as Exhibit 10.20.2 to the Form S-1, is
    incorporated herein by reference.10
.20.3

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2005 between Capitol Specialty
    Insurance Corporation and Darwin National Assurance Company,
    filed as Exhibit 10.20.3 to Amendment No. 4 to the Form S-1, is
    incorporated herein by reference. S-10




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.21.1

Commutation and Release Agreement effective as of July 1, 2005
    by and between Capitol Indemnity Corporation and Darwin National
    Assurance Company, filed as Exhibit 10.21.1 to the Form S-1, is
    incorporated herein by reference.10
.21.2

Amendment effective as of October 1, 2005 to Commutation and
    Release Agreement effective as of July 1, 2005 by and between
    Capitol Indemnity Corporation and Darwin National Assurance
    Company. Reinsurance Agreement effective as of July 1, 2004 by
    and among Platte River Insurance Company and Darwin National
    Assurance Company, filed as Exhibit 10.21.2 to the Form S-1, is
    incorporated herein by reference.10
.22.1

Reinsurance Agreement effective as of July 1, 2004 by and among
    Platte River Insurance Company and Darwin National Assurance
    Company, filed as Exhibit 10.22 to the Form S-1, is incorporated
    herein by reference.10
.22.2

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2004 between Platte River Insurance
    Company and Darwin National Assurance Company, filed as Exhibit
    10.22.1 to Amendment No. 4 to the Form S-1, is incorporated
    herein by reference.10
.23.1

Reinsurance Agreement effective as of July 1, 2005 by and among
    Platte River Insurance Company and Darwin National Assurance
    Company, filed as Exhibit 10.23.1 to the Form S-1, is
    incorporated herein by reference.10
.23.2

Amendment effective as of October 1, 2005 to Reinsurance
    Agreement effective as of July 1, 2005 by and among Platte River
    Insurance Company and Darwin National Assurance Company, filed
    as Exhibit 10.23.2 to the Form S-1, is incorporated herein by
    reference.10
.23.3

Amendment effective as of January 1, 2006 to Reinsurance
    Agreement effective July 1, 2005 between Platte River Insurance
    Company and Darwin National Assurance Company, filed as Exhibit
    10.23.3 to Amendment No. 4 to the Form S-1, is incorporated
    herein by reference.10
.24

Excess of Loss Reinsurance Contract effective as of July 1, 2003
    by and among Capitol Indemnity Corporation, Capitol Specialty
    Insurance Corporation, Platte River Insurance Company and/or any
    other associated, affiliated or subsidiary companies of
    Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.24 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.25

Excess Cession Reinsurance Contract effective as of October 1,
    2003 (originally effective as of January 1, 2004) by and among
    Capitol Indemnity Corporation, Capitol Specialty Insurance
    Corporation, Platte River Insurance Company and/or any other
    associated, affiliated or subsidiary companies of Alleghany
    Insurance Holding LLC and the Reinsurers signatory thereto,
    filed as Exhibit 10.25 to Amendment No. 1 to the Form S-1, is
    incorporated herein by reference.10
.26

Excess of Loss Reinsurance Contract effective as of October 1,
    2003 (originally effective as of January 1, 2004) by and among
    Capitol Indemnity Corporation, Capitol Specialty Insurance
    Corporation, Platte River Insurance Company and/or any other
    associated, affiliated or subsidiary companies of Alleghany
    Insurance Holding LLC and the Reinsurers signatory thereto,
    filed as Exhibit 10.26 to Amendment No. 1 to the Form S-1, is
    incorporated herein by reference.10
.27

Psychiatrists Professional and Office Liability Quota Share
    effective as of October 1, 2004 by and among Darwin National
    Assurance Company, Capitol Specialty Insurance Corporation and
    any other associated, affiliated or subsidiary companies of
    Alleghany Insurance Holdings, Ltd. and the Reinsurers signatory
    thereto, filed as Exhibit 10.27 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.28

Excess Cession Reinsurance Contract effective as of January 1,
    2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.28 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.29

Excess Cession Reinsurance Contract effective as of September 1,
    2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.29 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference. S-11




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.30

Excess of Loss Reinsurance Contract effective as of January 1,
    2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.30 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.31

Excess of Loss Reinsurance Contract effective as of April 1,
    2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.31 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.32

First Excess Cession Reinsurance Contract effective as of April
    1, 2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.32 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.33

Quota Share Reinsurance Contract effective as of September 1,
    2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.33 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.34

Second Excess Cession Reinsurance Contract effective as of April
    1, 2005 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC and the Reinsurers signatory
    thereto, filed as Exhibit 10.34 to Amendment No. 1 to the Form
    S-1, is incorporated herein by reference.10
.35

Office Lease dated February 1, 2005 by and between Lancdon
    Limited Partnership and Darwin Professional Underwriters, Inc,
    filed as Exhibit 10.35 to Amendment No. 1 to the Form S-1, is
    incorporated herein by reference.10
.36

Software License Agreement dated November 21, 2003 by and
    between OneShield, Inc. and Darwin Professional Underwriters,
    Inc, filed as Exhibit 10.36 to Amendment No. 1 to the Form S-1,
    is incorporated herein by reference.10
.37

Software and Services Agreement effective as of November 9, 2004
    between Valley Oak Systems, Inc. and Darwin Professional
    Underwriters, Inc, filed as Exhibit 10.37 to Amendment No. 1 to
    the Form S-1, is incorporated herein by reference.10
.38

Excess Cession Reinsurance Contract effective April 1, 2006 by
    and among Darwin National Assurance Company, Darwin Select
    Insurance Company and/or any other associated, affiliated or
    subsidiary companies of Darwin Professional Underwriters, Inc.,
    including business assumed by the Reassured from Capitol
    Indemnity Corporation, Capitol Specialty Insurance Corporation,
    Platte River Insurance Company and/or any other associated,
    affiliated or subsidiary companies of Alleghany Insurance
    Holding LLC, but only in respect of business underwritten by
    Darwin Professional Underwriters, Inc. and the Reinsurers
    signatory thereto, filed as Exhibit 10.38 to Amendment No. 2 to
    Darwin Professional Underwriters, Inc.s Registration
    Statement on Form S-1 (Reg. No. 333-132355) filed on May 3, 2006
    (Amendment No. 2 to the Form S-1), is incorporated
    herein by reference.10
.39

Excess of Loss Reinsurance Contract effective April 1, 2006 by
    and among Darwin National Assurance Company, Darwin Select
    Insurance Company and/or any other associated, affiliated or
    subsidiary companies of Darwin Professional Underwriters, Inc.,
    including business assumed by the Reassured from Capitol
    Indemnity Corporation, Capitol Specialty Insurance Corporation,
    Platte River Insurance Company and/or any other associated,
    affiliated or subsidiary companies of Alleghany Insurance
    Holding LLC, but only in respect of business underwritten by
    Darwin Professional Underwriters, Inc. and the Reinsurers
    signatory thereto, filed as Exhibit 10.39 to Amendment No. 2 to
    the Form S-1, is incorporated herein by reference. S-12




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.40

Excess Cession Reinsurance Contract effective September 1, 2005
    by and among Darwin National Assurance Company, Darwin Select
    Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC, but only in respect of
    business underwritten by Darwin Professional Underwriters, Inc.
    and the Reinsurers signatory thereto, filed as Exhibit 10.40 to
    Amendment No. 2 to the Form S-1, is incorporated herein by
    reference.10
.41

Excess of Loss Reinsurance Contract effective April 1, 2006 by
    and among Darwin National Assurance Company, Darwin Select
    Insurance Company and/or any other associated, affiliated or
    subsidiary companies of Darwin Professional Underwriters, Inc.,
    including business assumed by the Reassured from Capitol
    Indemnity Corporation, Capitol Specialty Insurance Corporation,
    Platte River Insurance Company and/or any other associated,
    affiliated or subsidiary companies of Alleghany Insurance
    Holding LLC, but only in respect of business underwritten by
    Darwin Professional Underwriters, Inc. and the Reinsurers
    signatory thereto, filed as Exhibit 10.41 to Amendment No. 2 to
    the Form S-1, is incorporated herein by reference.10
.42

First Excess Cession Reinsurance Contract effective April 1,
    2006 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company and/or any other associated, affiliated
    or subsidiary companies of Darwin Professional Underwriters,
    Inc., including business assumed by the Reassured from Capitol
    Indemnity Corporation, Capitol Specialty Insurance Corporation,
    Platte River Insurance Company and/or any other associated,
    affiliated or subsidiary companies of Alleghany Insurance
    Holding LLC, but only in respect of business underwritten by
    Darwin Professional Underwriters, Inc. and the Reinsurers
    signatory thereto, filed as Exhibit 10.42 to Amendment No. 2 to
    the Form S-1, is incorporated herein by reference.10
.43

Second Excess Cession Reinsurance Contract effective April 1,
    2006 by and among Darwin National Assurance Company, Darwin
    Select Insurance Company and/or any other associated, affiliated
    or subsidiary companies of Darwin Professional Underwriters,
    Inc., including business assumed by the Reassured from Capitol
    Indemnity Corporation, Capitol Specialty Insurance Corporation,
    Platte River Insurance Company and/or any other associated,
    affiliated or subsidiary companies of Alleghany Insurance
    Holding LLC, but only in respect of business underwritten by
    Darwin Professional Underwriters, Inc. and the Reinsurers
    signatory thereto, filed as Exhibit 10.43 to Amendment No. 2 to
    the Form S-1, is incorporated herein by reference.10
.44

Quota Share Reinsurance Contract effective September 1, 2005 by
    and among Darwin National Assurance Company, Darwin Select
    Insurance Company, Capitol Indemnity Corporation, Capitol
    Specialty Insurance Corporation, Platte River Insurance Company
    and/or any other associated, affiliated or subsidiary companies
    of Alleghany Insurance Holding LLC, but only in respect of
    business underwritten by Darwin Professional Underwriters, Inc.
    and the Reinsurers signatory thereto and Addendums No. 1 and 2
    thereto, filed as Exhibit 10.44 to Amendment No. 2 to the Form
    S-1, is incorporated herein by reference.10
.45

Professional Liability Excess of Loss Reinsurance Contract
    effective October 1, 2005 by and among Darwin National Assurance
    Company, Darwin Select Insurance Company, Capitol Indemnity
    Corporation, Capitol Specialty Insurance Corporation, Platte
    River Insurance Company and/or any other associated, affiliated
    or subsidiary companies of Alleghany Insurance Holding LLC, but
    only in respect of business underwritten by Professional
    Government Underwriters and/or Darwin Professional Underwriters,
    Inc. and the Reinsurers signatory thereto, filed as Exhibit
    10.45 to Amendment No. 2 to the Form S-1, is incorporated herein
    by reference.10
.46

Excess of Loss Reinsurance Contract effective November 1, 2005
    by and among Darwin National Assurance Company, Darwin Select
    Insurance Company, Capitol Indemnity Corporation, Platte River
    Insurance Company and/or any other associated, affiliated or
    subsidiary companies of Alleghany Insurance Holding LLC, but
    only in respect of business underwritten by Darwin Professional
    Underwriters, Inc. and the Reinsurers signatory thereto, filed
    as Exhibit 10.46 to Amendment No. 2 to the Form S-1, is
    incorporated herein by reference.10
.47

2006 Employees Restricted Stock Plan, filed as Exhibit
    10.3 to Darwin Professional Underwriters Inc.s Current
    Report on Form 8-K filed on May 23, 2006, is incorporated herein
    by reference. S-13




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.48.1

Trust Agreement, effective as of  September 1, 2006 among DARWIN
    NATIONAL ASSURANCE COMPANY, as Grantor, CAPITOL INDEMNITY
    CORPORATION, as Beneficiary and THE BANK OF NEW YORK, as
    Trustee, filed as Exhibit 10.48.1 to Darwin Professional
    Underwriter, Inc.s Quarterly Report on Form 10-Q filed on
    November 7, 2006, is incorporated herein by reference.10
.48.2

Trust Agreement, effective as of  September 1, 2006 among DARWIN
    NATIONAL ASSURANCE COMPANY, as Grantor, CAPITOL SPECIALITY
    INSURANCE COMPANY, as Beneficiary and THE BANK OF NEW YORK, as
    Trustee, filed as Exhibit 10.48.2 to Darwin Professional
    Underwriter, Inc.s Quarterly Report on Form 10-Q filed on
    November 7, 2006, is incorporated herein by reference.10
.48.3

Trust Agreement, effective as of  September 1, 2006 among DARWIN
    NATIONAL ASSURANCE COMPANY, as Grantor, PLATTE RIVER INSURANCE
    COMPANY, as Beneficiary and THE BANK OF NEW YORK, as Trustee,
    filed as Exhibit 10.48.3 to Darwin Professional Underwriter,
    Inc.s Quarterly Report on Form 10-Q filed on November 7,
    2006, is incorporated herein by reference.10
.49.1

CREDIT AGREEMENT dated as of  March 23, 2007 among DARWIN
    PROFESSIONAL UNDERWRITERS, INC., The Lenders Party thereto and
    JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Administrative
    Agent, filed as Exhibit 10.1, to the Darwin Professional
    Underwriters, Inc. Current Report on Form 8-K, filed March 26,
    2007, is incorporated herein by reference.10
.49.2

Subsidiary Guaranty, dated as of March 23, 2007 between Darwin
    Group Inc. and JPMorgan Chase Bank, National Association, in its
    capacity as administrative agent (the Administrative
    Agent) under the Credit Agreement dated as of March 23,
    2007, filed as Exhibit 10.2, to the Darwin Professional
    Underwriters, Inc. Current Report on Form 8-K, filed March 26,
    2007, is incorporated herein by reference.10
.49.3

Pledge Agreement, dated as of March 23, 2007, among Darwin
    Professional Underwriters, Inc. and Darwin Group, Inc. and
    JPMorgan Chase Bank, National Association, in its capacity as
    administrative agent (the Administrative Agent)
    under the Credit Agreement dated as of March 23, 2007, filed as
    Exhibit 10.3, to the Darwin Professional Underwriters, Inc.
    Current Report on Form 8-K, filed March 26, 2007, is
    incorporated herein by reference.10
.50

Form of Darwin Professional Underwriters, Inc. 2006 Stock
    Incentive Plan EMPLOYEE STOCK OPTION AGREEMENT, filed as Exhibit
    99.3 to the Darwin Professional Underwriters, Inc. Current
    Report on Form 8-K, filed May 8, 2007, is incorporated herein by
    reference.10
.51

Form of Darwin Professional Underwriters, Inc. 2006 Stock
    Incentive Plan RESTRICTED STOCK AGREEMENT, filed as Exhibit 99.4
    to the Darwin Professional Underwriters, Inc. Current Report on
    Form 8-K, filed May 8, 2007, is incorporated herein by
    reference.14


Code of Business Conduct and Ethics, filed as Exhibit 14 to the
    Darwin Professional Underwriters Inc. Annual Report on Form 10-K
    filed on February 28, 2007, is incorporated herein by reference.21


List of subsidiaries of Darwin Professional Underwriters, Inc.23


Consent of KPMG LLP, independent registered public accounting
    firm, to the incorporation by reference of its reports relating
    to the financial statements the related schedules of Darwin
    Professional Underwriters, Inc. and subsidiaries and its
    attestation report in Registration Statement No. 333- 145214 on
    Form S-3 and in Registration Statements No. 333-134416 and
    333-134417 on Form S-8 of Darwin Professional Underwriters, Inc.
    of its report dated February 28, 2008.31
.1

Certification of the Chief Executive Officer of Darwin
    Professional Underwriters, Inc., pursuant to Rule 13a-14(a) or
    Rule 15d-14(a) of the Securities Exchange Act of 1934.31
.2

Certification of the Chief Financial Officer of Darwin
    Professional Underwriters, Inc., pursuant to Rule 13a-14(a) or
    Rule 15d-14(a) of the Securities Exchange Act of 1934. S-14




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##### Table of Contents



ExhibitNumber

Description of Exhibit32
.1

Certification of the Chief Executive Officer of Darwin
    Professional Underwriters, Inc., pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of the
    Sarbanes-Oxley Act of 2002, furnished as permitted by Item
    601(b)(32)(ii) of Regulation S-K.  This Exhibit 32.1 is not
    filed for purposes of Section 18 of the Securities
    Exchange Act of 1934 and it is not and should not be deemed to
    be incorporated by reference into any filing under the
    Securities Act of 1933 or the Securities Exchange Act of 1934.32
.2

Certification of the Chief Financial Officer of Darwin
    Professional Underwriters, Inc., pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of the
    Sarbanes-Oxley Act of 2002, furnished as permitted by Item
    601(b)(32)(ii) of Regulation S-K.  This Exhibit 32.1 is not
    filed for purposes of Section 18 of the Securities
    Exchange Act of 1934 and it is not and should not be deemed to
    be incorporated by reference into any filing under the
    Securities Act of 1933 or the Securities Exchange Act of 1934.     
    
    Indicates a management contract or compensatory plan. S-15