Flagstone Re Provides Loss Estimates from Fourth Quarter 2010

Flagstone Reinsurance Holdings, S.A. (NYSE: FSR) today announced that its loss estimate due to the flooding in Australia that occurred in December 2010, is expected to be $10 million, net of reinstatement premiums and retrocession.

In January 2011, subsequent flooding occurred in large areas of Australia; and on February 3, 2011, Cyclone Yasi hit Northern Queensland, Australia; both events will be deemed separate from those in December 2010. These 2011 events are expected to impact the Company’s first quarter 2011 financial results. Due to the timing and nature of these events, Flagstone is currently assessing its exposure and will provide a loss estimate when the assessment is concluded.

Additionally, due to the unprecedented number of events that occurred in New Zealand and Australia over the course of 2010, the Company expects that aggregate covers will be triggered, incurring losses of $25 million for the fourth quarter of 2010, net of reinstatement premiums and retrocession. However, the Company does expect to produce positive growth in diluted book value per share for the fourth quarter of 2010.

Flagstone’s loss estimates are based on its proprietary modeling analysis, the assessment of individual treaties and client data, and third-party vendor models.

Flagstone is scheduled to release fourth quarter and full year 2010 results after the close of trading on Monday, February 14, 2011. Flagstone Management will conduct a conference call and webcast on Tuesday, February 15, 2011, at 9:30am Eastern Time to discuss results.

The teleconference can be accessed by dialing (866) 788 0541 (US callers) or (857) 350-1679 (International callers) and entering the pass code 14084816 approximately 10-15 minutes in advance of the call. The live, listen-only webcast of the call will be available via the Investor Information section of the Company’s website at www.flagstonere.com

About Flagstone Reinsurance Holdings, S.A.

Flagstone Reinsurance Holdings, S.A., through its operating subsidiaries, is a global reinsurance and insurance company that employs a focused and technical approach to the Property Catastrophe, Property, and Specialty reinsurance and insurance businesses.

The Company is traded on the New York Stock Exchange under the symbol "FSR" and the Bermuda Stock Exchange under the symbol "FSR BH". Additional financial information and other items of interest are available at the Company's website located at http://www.flagstonere.com.

Cautionary Statement Regarding Forward-Looking Statements

This report may contain, and the Company may from time to time make, written or oral "forward-looking statements” within the meaning of the U.S. federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Company’s control, which could cause actual results to differ materially from such statements. In particular, statements using words such as "may”, "should”, "estimate”, "expect”, "anticipate”, "intend”, "believe”, "predict”, "potential”, or words of similar import generally involve forward-looking statements.

Important events and uncertainties that could cause the actual results to differ include, but are not necessarily limited to: market conditions affecting the Company’s common share price; the possibility of severe or unanticipated losses from natural or man-made catastrophes; the effectiveness of our loss limitation methods; our dependence on principal employees; the cyclical nature of the reinsurance business; the levels of new and renewal business achieved; opportunities to increase writings in our core property and specialty reinsurance and insurance lines of business and in specific areas of the casualty reinsurance market; the sensitivity of our business to financial strength ratings established by independent rating agencies; the estimates reported by cedents and brokers on pro-rata contracts and certain excess of loss contracts where the deposit premium is not specified in the contract; the inherent uncertainties of establishing reserves for loss and loss adjustment expenses, our reliance on industry loss estimates and those generated by modeling techniques; unanticipated adjustments to premium estimates; changes in the availability, cost or quality of reinsurance or retrocessional coverage; changes in general economic conditions; changes in governmental regulation or tax laws in the jurisdictions where we conduct business; the amount and timing of reinsurance recoverables and reimbursements we actually receive from our reinsurers; the overall level of competition, and the related demand and supply dynamics in our markets relating to growing capital levels in the reinsurance industry; declining demand due to increased retentions by cedents and other factors; the impact of terrorist activities on the economy; and rating agency policies and practices.

These and other events that could cause actual results to differ are discussed in more detail from time to time in our filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by U.S. federal securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.