Exhibit 99.1
               Tower Group, Inc. Announces the Issuance
of $13 Million of Subordinated Debentures in Connection with Offering
                    of Trust Preferred Securities


    NEW YORK--(BUSINESS WIRE)--Dec. 21, 2004--Tower Group, Inc.
(NASDAQ: TWGP) announced that the company closed today on a $13
million offering of subordinated debentures issued in connection with
offerings of trust preferred securities in pooled private placements.
This offering was previously announced last week and is the second of
two $13 million trust preferred placements for Tower Group, Inc. in
December 2004. The first trust preferred offering closed on December
15, 2004.
    The subordinated debentures with respect to the offering that
closed today have stated maturities of 30 years, pay interest
quarterly and are redeemable at par on or after five years from the
date of issuance. Cohen Brothers & Company and Friedman, Billings,
Ramsey & Company are the placement agents with respect to this
offering. The interest rate will float based on the three-month LIBOR
interest rate plus 340 basis points.
    Tower Group Inc. President and CEO, Michael Lee said last week at
the time of the first closing that "in connection with our plans for
territorial expansion we intend to use the proceeds to acquire and
capitalize a shell insurance company with multi-state licensing and
for working capital purposes."
    This press release does not constitute an offer to sell or the
solicitation of an offer to buy any of the securities offered. The
subordinated debentures and the trust preferred securities, as well as
the securities issued by the pool, have not been registered under the
Securities Act of 1933 or any state securities laws and unless so
registered may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933 and applicable
state securities laws.
    "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding Tower
Group, Inc.'s business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties that
could cause actual results to differ materially from those expressed
or implied in the forward-looking statements. Such results may be
impacted by factors outside the company's control. Additional
information concerning potential risk factors that could affect the
company's future performance are described in the company's
registration statement on Form S-1 and periodic reports filed with the
Securities and Exchange Commission.

    About Tower Group, Inc.

    In operation since 1990, Tower Group, Inc. is headquartered in New
York City and is the holding company for its two operating
subsidiaries, Tower Insurance Company of New York, ("TICNY") and Tower
Risk Management ("TRM"). TICNY, A.M. Best rated A- (Excellent),
develops and delivers specialized commercial lines insurance products
that provide property, liability, workers' compensation and automobile
insurance to select markets not well served by other carriers. It also
offers personal lines products that provide property and liability
insurance to homeowners throughout New York State. TRM, a non- risk
bearing insurance service company, offers managing general agency
services to underwrite risks, adjust claims and negotiate reinsurance
terms on behalf of other insurance companies.

    For more information visit Tower's website at
http://www.twrgrp.com/



    CONTACT: Tower Group, Inc.
             Investor Relations
             Andrew Colannino, 212-655-2107
             acolannino@twrgrp.com