months, has received a big boost in the form of a buy-in to the tune of $112.5 million.

XL Capital, First Union Capital Partners, High Ridge Capital and Century Capital Partners have agreed to jointly invest in MRM through the purchase of a newly created class of debentures. XL is the lead investor.

The investment is conditional upon regulatory and lender approvals, definitive documentation and customary closing conditions.

Last year MRM refinanced a bridge loan facility of $220 million through a $180 million syndicated bank facility and a $40 million private trust securities arrangement, known as RHINOS.

In connection with this new investment MRM has agreed to pay down $10 million principal amount of the outstanding RHINO facility. MRM said holders of the remaining $30 million principal amount of RHINOS have agreed to defer remarketing rights and they have the right to convert the RHINOS into a corresponding principal amount of debentures.

The $180 million bank facility remains in place.

The principal use of the money from the $112.5 million investment will be to increase the statutory capital of MRM's US companies, the Legion Companies, which are the company's policy issuing subsidiaries.

MRM also plans to restructure its programme business segment. This business entails structuring insurance programmes for groups with a similarity in their business, risks or associations and charging a fee for this.

MRM will transform it into a specialty insurance operation by retaining more underwriting risk in the larger and more profitable programmes and purchasing less reinsurance. The company will continue its policy of non-renewal of smaller, less profitable programmes which do not offer opportunities to a specialty insurer.

MRM expects this restructuring to take place over the next two years. It recognises this will increase the company's underwriting exposure, but it will also reduce reliance on reinsurance and its exposure to reinsurance recoverables. Primary underwriting capabilities will be enhanced, which it has been building over the last year.

It is also expected to improve operating cash flow. Operating expenses should be reduced by eliminating costs associated with sales and servicing of smaller insurance programme business.

Robert Mulderig, chairman and chief executive officer of MRM, said: "We are pleased to have successfully completed the search for additional capital in order to increase the statutory capital of our US insurance subsidiaries and maintain their ratings. We are delighted to have XL Capital as the lead investor in this transaction.

"This will allow us to capitalise on the significant increase in demand for our alternative market products, which has occurred over the last six months in the improving market. We believe this is the right point in the insurance market cycle to transition our programme business to a specialty insurance model. This should reduce our dependence on reinsurance, improve cash flow and lead to long term profitability.'' Brian O'Hara, president and chief executive of XL Capital, said: "This investment provides XL and its fellow investors an opportunity to both support and benefit from Mutual's unique franchise in the alternative market. We believe Mutual's adoption of a new specialty insurance model is the right decision for this market place and should enhance results going forward.

"We see this as an excellent investment that will benefit both Mutual Risk Management and XL shareholders, and we look forward to being supportive partners to Mutual as it continues to position its businesses for success.'' MRM gets cash boost MRM has seen dramatic share price falls to an all time low of $3.50 per share in yesterday's market. Following suspension of trading yesterday afternoon by the stock exchange, at MRM's request, the company was able to submit news of the new investment before the market closed. Trading was resumed in MRM shares and by close of the market the price had risen from $3.50 to $5.75 per share.

MRM also announced it will reduce its quarterly dividend from $0.07 per common share to $0.01 commencing with its second quarter dividend payable on May 18 2001. It also revised its estimate of 2001 earnings per common share to a range from $1.00 to $1,15 per share.