and casualty insurance. It is part of the company's bid to become a global player. Ahmed ElAmin reports.

In the latest in a series of global expansions, Bermuda-based Exel Ltd.

announced yesterday an agreement to purchase Intercargo Corp. for $88 million -- significantly widening its ability to sell insurance throughout the US.

The cash purchase, for $12 a share, gives Exel a stake in a specialty US insurer which provides coverage for companies in international trade, including US Customs bonds and marine cargo insurance.

Since Exel's Brockbank Group Plc at Lloyd's of London is one of the two largest marine insurance underwriters in the world, the acquisition will vault the Bermuda-based company into a premier position.

Intercargo's licences in 48 US states was also a key factor in making the acquisition. The licences give Exel the ability to sell its product throughout the US, a growth that was already occurring through the acquisition of X.L.

America earlier this year, chief financial officer Robert Lusardi said yesterday.

"Intercargo happens to write marine business but we will use the company to write more than marine business,'' he said in an interview. "It provides a platform for Exel to reach all of the US and provide property and casualty insurance. It should be viewed as simply another extension of Exel into being a complete global company with its headquarters in Bermuda.'' Since the provision of marine insurance has been in a down cycle Intercargo's shares had sunk 27 percent to 10 1/8 on Tuesday, before the announcement, from a high of 13 7/8 in January 1997. Yesterday Intercargo's stock had risen about $1 5/16 to about $11.50 a share.

Exel was able to purchase Intercargo at $7 million above its $81 million in market capitalisation, or at 1.08 of book value -- in other words, a cheap price compared to other acquisitions.

After the transaction is completed Intercargo will operate in coordination with Brockbank. Stan Galanski will continue as the company's president and chief executive officer, and Robert Lynyak as chief underwriting officer.

"In addition to its current business focus on international trade and contract surety, the company will underwrite business produced by Brockbank's satellite and marine insurance operations as well as business from other Exel subsidiaries,'' a Press release stated. Over the past two years Exel has been on a path to growth in its bid to become a global company and compete with the larger players in the market.

When Exel purchased outright the remaining 74 percent of Bermuda-based Mid Ocean Ltd. for $2.1 billion in cash and stock this year, president and chief executive officer Brian O'Hara said the company believed that the future for insurers lay in being big.

Since then Exel has made a number of other acquisitions and created new companies. Asked how the company was doing in dealing with the rapid pace of growth, chief financial officer Mr. Lusardi said the company's history was that it has been able to manage the integration of the acquisitions.

This it had been able to do by recognising the expertise of companies in their various locations.

"We recognise that we are Bermuda headquartered with operations in the far corners of the world,'' he said. "We tend to delegate a lot of autonomy to these operations. We are viewed as an attractive parent.'' He gave as an example the acquisition of Mid Ocean during which he said not a single underwriter or manager left the company. "So far we have had a good track record,'' Mr. Lusardi said.

GROWING EMPIRE Exel Ltd. shopping list and new formations -- (dates reflect when announced, and not necessarily when acquired or formed) acquired 30 percent stake in investment management firm Pareto Partners -- April, 1996 acquired a stake in 45 percent interest in political risk specialist Sovereign Risk Insurance Ltd. - March, 1997 acquired GCR Holdings Ltd. (now XL Global Re) -- May, 1997 acquired 20 percent stake in Lloyd's syndicate manager Venton Holdings Ltd. -- June, 1997 acquired the business of Connecticut-based American Excess Insurance Association -- October, 1997 acquired Railroad Association Insurance Ltd. -- October, 1997 acquired a 75 percent stake created in Latin American Reinsurance Co Ltd. -- October 1997 Folksamerica General Insurance Co. (formerly the Great Lakes American Reinsurance Co.); formation of X.L. America -- November, 1997 merger with Mid Ocean Ltd. -- March 1998 purchase of Bermuda-based Reeve Court Insurance -- July 1998 purchase of 25 percent of US-based Tri City Brokerage, Inc. -- July 1998 Airline Risk Consortium -- formed with ACE Ltd. and Overseas Partners Re Ltd.

-- September 1998 Formation of X.L. Financial Assurance Ltd. and equity interest in Financial Security Assurance International Ltd. through joint venture with Financial Security Assurance Holdings Ltd.

Intercargo Corp. -- December 1998 BRIAN O'HARA -- Expanding in US