<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report under section 13 or 15(d) of the Securities Exchange Act
of 1934. For the period ended March 31, 1997.
or
[_] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from _____________ to
_____________ .
Commission File Number 1-10760
MUTUAL RISK MANAGEMENT LTD.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BERMUDA NOT APPLICABLE
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
44 CHURCH STREET,
HAMILTON HM 12, BERMUDA
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(441) 295-5688
- --------------------------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [_]
The number of outstanding shares of the registrant's Common Stock, $0.01 par
value, as of March 31, 1997 was 19,096,107.
<PAGE>
MUTUAL RISK MANAGEMENT LTD.
I N D E X
PART I. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS:
Unaudited Consolidated Statements of Income for the three
month periods ended March 31, 1997 and 1996 3
Consolidated Balance Sheets at March 31, 1997 (unaudited)
and December 31, 1996 4
Unaudited Consolidated Statements of Cash Flows for the
three month periods ended March 31, 1997 and 1996 5
Consolidated Statements of Shareholders' Equity at
March 31, 1997 (unaudited) and December 31, 1996 6
Notes to Unaudited Consolidated Financial Statements at
March 31, 1997 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 8-11
CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION:
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
EXHIBITS
Exhibit 11 - Computation of Net Earnings per Common
Share and Common Share Equivalents
Exhibit 27 - Financial Data Schedule
<PAGE>
MUTUAL RISK MANAGEMENT LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1997 1996
<S> <C> <C>
REVENUES
Fee income $23,936,629 $19,666,747
Premiums earned 17,952,608 11,753,974
Net investment income 5,987,912 5,189,679
Realized capital (losses) gains (774,267) 4,968
Other income 84,270 77,437
----------- -----------
TOTAL REVENUES 47,187,152 36,692,805
----------- -----------
EXPENSES
Losses and loss expenses incurred 7,663,380 7,139,924
Acquisition costs 10,604,741 4,671,124
Operating expenses 14,130,334 11,250,340
Interest expense 1,591,150 1,522,173
Other expenses 236,424 108,231
----------- -----------
TOTAL EXPENSES 34,226,029 24,691,792
----------- -----------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 12,961,123 12,001,013
Income taxes 2,276,100 2,612,222
----------- -----------
INCOME FROM CONTINUING
OPERATIONS 10,685,023 9,388,791
Minority interest 0 (207,186)
----------- -----------
NET INCOME 10,685,023 9,181,605
Preferred share dividends 41,510 40,588
----------- -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $10,643,513 $ 9,141,017
=========== ===========
EARNINGS PER COMMON SHARE
Primary EPS $0.54 $0.48
=========== ===========
Fully diluted EPS $0.53 $0.47
=========== ===========
Dividends per share $0.09 $0.08
=========== ===========
Weighted average number of Common
Shares outstanding 19,611,317 19,039,953
=========== ===========
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements
3
<PAGE>
MUTUAL RISK MANAGEMENT LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 115,480,237 $ 52,242,353
Investments : Held in available for
sale account at fair value
(Amortized cost $339,440,144; 1996 - 333,990,336 400,191,211
$399,871,107) -------------- --------------
TOTAL MARKETABLE INVESTMENTS 449,470,573 452,433,564
Investments in affiliates 633,374 535,504
Other investments 2,432,325 2,432,325
Investment income due and accrued 4,058,730 4,976,145
Accounts receivable 148,462,186 123,956,477
Reinsurance receivables 380,766,358 350,317,706
Deferred expenses 25,150,904 20,612,715
Prepaid reinsurance premiums 90,060,204 73,587,920
Fixed assets 11,283,997 9,382,000
Deferred tax benefit 6,760,934 3,361,571
Goodwill 22,678,316 14,956,786
Other assets 3,418,071 5,406,177
Assets held in separate accounts 587,102,064 576,711,687
-------------- --------------
TOTAL ASSETS $1,732,278,036 $1,638,670,577
============== ==============
LIABILITIES, REDEEMABLE PREFERRED &
COMMON SHARES & SHAREHOLDERS' EQUITY
LIABILITIES
Reserve for losses and loss expenses $ 455,462,016 $ 418,975,493
Reserve for unearned premiums 118,219,100 93,741,088
Claims deposit liabilities 44,069,753 45,688,793
Accounts payable 145,779,259 133,265,076
Accrued expenses 4,093,016 5,708,286
Taxes payable 12,770,359 9,261,685
Prepaid fees 14,867,728 13,231,468
Debentures 123,801,097 122,210,991
Other liabilities 7,650,923 7,422,743
Liabilities related to separate 587,102,064 576,711,687
accounts -------------- --------------
TOTAL LIABILITIES 1,513,815,315 1,426,217,310
-------------- --------------
REDEEMABLE PREFERRED & COMMON SHARES
Preferred Shares - Series B non-voting
Redeemable - authorized
and issued 2,951,835 (par value and
redemption value $1.00) 2,951,835 2,951,835
Common Shares subject to redemption -
468,584 Common Shares
(par value $0.01, redemption value
$3.50 less subscription loans
receivable - $767,522, plus
interest received) 1,520,732 1,510,544
TOTAL REDEEMABLE PREFERRED & COMMON -------------- --------------
SHARES 4,472,567 4,462,379
-------------- --------------
SHAREHOLDERS' EQUITY
Common Shares - Authorized 60,000,000
(par value $0.01)
Issued 18,627,523 (1996 -
18,563,269) 186,275 185,633
Additional paid-in capital 81,345,359 79,997,919
Unrealized (loss) gain on investments (4,224,036) 47,682
- net of tax
Retained earnings 136,682,556 127,759,654
-------------- --------------
TOTAL SHAREHOLDERS' EQUITY 213,990,154 207,990,888
-------------- --------------
TOTAL LIABILITIES, REDEEMABLE
PREFERRED & COMMON SHARES
& SHAREHOLDERS' EQUITY $1,732,278,036 $1,638,670,577
============== ==============
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements
4
<PAGE>
MUTUAL RISK MANAGEMENT LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
<S> <C> <C>
NET CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 10,685,023 $ 9,181,605
Items not affecting cash:
Depreciation 842,026 651,611
Amortization of investments and net 431,991 (313,721)
gain on sales
Amortization of Convertible
Debentures 1,590,106 1,509,801
Deferred tax benefit (1,901,168) 456,107
Other items 132,155 17,942
Net changes in non-cash balances
relating to operations:
Accounts receivable (24,505,709) 10,345,538
Reinsurance receivables (30,448,652) (12,882,953)
Investment income due and accrued 917,415 (105,418)
Deferred expenses (4,538,189) 167,132
Prepaid reinsurance premiums (16,472,284) (4,352,548)
Other assets 1,988,106 375,529
Reserve for losses and loss expenses 36,486,523 7,400,449
Prepaid fees 1,636,260 717,737
Reserve for unearned premium 24,478,012 2,455,756
Accounts payable 12,514,183 1,796,892
Taxes payable 3,508,674 485,878
Accrued expenses (1,615,270) (1,687,789)
Other liabilities 222,145 398,750
------------ ------------
NET CASH FLOW FROM OPERATING ACTIVITIES 15,951,347 16,618,298
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments -
Available for sale 94,983,103 9,628,959
Proceeds from maturity of
investments - Available for sale 10,250,576 13,424,578
Fixed assets purchased (2,749,673) (1,401,909)
Investments purchased - Available
for sale (45,234,707) (37,773,048)
Investment in affiliates and other
investments (14,488) (258,593)
Goodwill purchased (7,937,953) (3,562,474)
Swap expense 0 (3,147,055)
Other items 6,537 27,078
------------ ------------
NET CASH FLOW FROM (APPLIED TO) 49,303,395 (23,062,464)
INVESTING ACTIVITIES ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan repaid 0 (30,633)
Loan repayment & interest received 10,188 15,266
Proceeds from shares issued 1,348,082 3,277,710
Claims deposit liabilities (1,619,040) 5,237,190
Dividends paid (1,756,088) (1,598,702)
------------ ------------
NET CASH FLOW (APPLIED TO) FROM
FINANCING ACTIVITIES (2,016,858) 6,900,831
------------ ------------
Net increase in cash and cash
equivalents 63,237,884 456,665
Cash and cash equivalents at
beginning of period 52,242,353 79,669,981
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $115,480,237 $ 80,126,646
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 1,044 $ 12,372
============ ============
Income taxes paid, net $ 0 $ 0
============ ============
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements
5
<PAGE>
MUTUAL RISK MANAGEMENT LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
SERIES B
PREFERRED COMMON
CHANGE IN SHARE SHARE
OPENING SHARES UNREALIZED NET DIVIDENDS DIVIDENDS CLOSING
BALANCE ISSUED GAIN (LOSS) INCOME DECLARED (1) DECLARED (2) BALANCE
<S> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH
31, 1997 (UNAUDITED)
- ---------------------------
Common Shares $ 185,633 $ 642 $ - $ - $ - $ - $ 186,275
Additional paid-in capital 79,997,919 1,347,440 - - - - 81,345,359
Unrealized gain (loss)
on investments 47,682 - (4,271,718) - - - (4,224,036)
Retained earnings 127,759,654 - - 10,685,023 (41,510) (1,720,611) 136,682,556
------------ ----------- ----------- ----------- --------- ----------- ------------
TOTAL SHAREHOLDERS' EQUITY
AT MARCH 31, 1997 $207,990,888 $ 1,348,082 $(4,271,718) $10,685,023 $ (41,510) $(1,720,611) $213,990,154
============ =========== =========== =========== ========= =========== ============
YEAR ENDED DECEMBER 31,
1996 (3)
- ---------------------------
Common Shares $ 178,051 $ 7,582 $ - $ - $ - $ - $ 185,633
Additional paid-in capital 65,396,652 14,601,267 - - - - 79,997,919
Unrealized (loss) gain
on investments 1,154,823 - (1,107,141) - - - 47,682
Retained earnings 98,773,622 - - 37,198,137 (166,041) (8,046,064) 127,759,654
------------ ----------- ----------- ----------- --------- ----------- ------------
TOTAL SHAREHOLDERS' EQUITY
AT DECEMBER 31, 1996 $165,503,148 $14,608,849 $(1,107,141) $37,198,137 $(166,041) $(8,046,064) $207,990,888
============ =========== =========== =========== ========= =========== ============
</TABLE>
(1) Dividend per share amounts were $.01 for the three months ended March 31,
1997 and $.06 for the year ended December 31, 1996.
(2) Dividend per share amounts were $.09 for the three months ended March 31,
1997 and $.32 for the year ended December 31, 1996 (restated for stock
split).
(3) Effective May 31, 1996 the Company effected a four - for - three stock
split recorded in the form of a stock dividend. 4,438,974 Common Shares
were issued in respect of this split. Prior periods have been restated.
See Accompanying Notes to Unaudited Consolidated Financial Statements
6
<PAGE>
MUTUAL RISK MANAGEMENT LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
1. INTERIM ACCOUNTING POLICY
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company and the results of operations and cash flows for the three months
ended March 31, 1997 and 1996. Although the Company believes that the
disclosure in these financial statements is adequate to make the information
presented not misleading certain information and footnote information normally
included in financial statements prepared in accordance with generally accepted
accounting principles has been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Results of operations
for the three months ended March 31, 1997 are not necessarily indicative of what
operating results may be for the full year.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
The results of operations for the three months ended March 31, 1997,
reflect a continuation of growth in Fee income and Net income due to the
addition of new accounts, increased investment income and the inclusion of Small
Business Underwriters ("SBU") for the first time in 1997. Net income available
to common shareholders amounted to $10.6 million or $0.53 per Common Share for
the three months ended March 31, 1997 on a fully diluted basis representing an
increase of 13% over the corresponding period as shown in the tables below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
---------------------------- ------------------------
($ thousands except per share data)
PER PER
COMMON SHARE COMMON SHARE
------------------ -------------------
FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED
<S> <C> <C> <C> <C> <C> <C>
Net income excluding
realized capital (losses) gains $11,158 $ 0.57 $ 0.55 $9,140 $ 0.48 $ 0.47
Realized capital (losses) gains (a) (514) (0.03) (0.02) 1 0.00 0.00
------- ------- ------- ------ ------- -------
Net income available to
Common Shareholders $10,644 $ 0.54 $ 0.53 $9,141 $ 0.48 $ 0.47
======= ======= ======= ====== ======= =======
Average number of
shares outstanding (000's) 19,611 23,101 19,040 22,529
------- ------- ------- -------
</TABLE>
(a) Net of tax.
(b) 1996 per share amounts have been adjusted to reflect the four-for-three
stock split which was effected May 31, 1996.
Total revenues amounted to $47.2 million for the quarter ended March 31,
1997 representing an increase of 29% over the corresponding 1996 period. The
following table shows the major components of Revenues for these periods.
<TABLE>
<CAPTION>
(In thousands)
TOTAL REVENUES
THREE MONTHS ENDED MARCH 31,
1997 1996 INCREASE
------- ------- --------
<S> <C> <C> <C>
Fee income $23,937 $19,667 22%
Premiums earned 17,952 11,754 53%
Net investment income 5,988 5,190 15%
Realized capital (losses) gains (774) 5 N/M
Other income 84 77 9%
------- -------
$47,187 $36,693 29%
======= ======= ==
</TABLE>
Total Fee income increased 22% to $23.9 million for the first three months
of 1997 as compared to $19.7 million in 1996. Pre-tax profit margins were 41%
for the first quarter of 1997 as compared to 43% in the 1996 first quarter.
Excluding the underwriting management portion of the Program Business segment
8
<PAGE>
and the Financial Services segment, which generally have lower margins, pre-tax
profit margins were 45% for the quarter as compared to 46% in 1996. The
components of Fee income are illustrated by business segment in the following
table:
<TABLE>
<CAPTION>
(In thousands)
FEE INCOME BY BUSINESS SEGMENT
THREE MONTHS ENDED MARCH 31,
1997 1996 INCREASE
---- ---- --------
<S> <C> <C> <C> <C> <C>
Corporate risk
management fees $11,450 48% $12,600 64% (9%)
Program business fees 9,168 38% 4,133 21% 122%
Specialty brokerage fees 1,588 7% 1,425 7% 11%
Financial services fees 1,731 7% 1,509 8% 15%
------- ---- ------- ---- ---
Total $23,937 100% $19,667 100% 22%
======= ==== ======= ==== ===
</TABLE>
Corporate Risk Management, the Company's original business segment,
involves providing services to businesses and associations seeking to insure a
portion of their risk in a loss sensitive Alternative Market structure. This
segment, which accounted for 48% of total Fee income for the first three months
of 1997 down from 64% in the corresponding 1996 period, has been the most
affected by the extremely soft insurance market cycle for commercial risks.
Corporate risk management fees decreased by 9% in the quarter to $11.5 million
compared to $12.6 million in 1996 as a result of a continuation of the extremely
soft market. Profit margins decreased to 44% for the first three months of 1997
compared to 46% in 1996.
Program Business, the fastest growing segment, involves the Company
replacing traditional insurers and acting as a conduit between producers of
specialty books of business and reinsurers wishing to write that business.
Program Business accounted for 38% of total Fee income for the first three
months of 1997 compared to 21% in the corresponding 1996 period. Program
Business fees increased by 122% in the first quarter to $9.2 million compared to
$4.1 million in the first quarter of 1996 as a result of the continued expansion
in this business and the acquisition of SBU on February 1, 1997. Profit
margins, excluding underwriting management, were 48% for the first three months
of both 1997 and 1996. Including underwriting management, profit margins were
40% for the quarter compared to 41% in 1996.
Legion Insurance Company and Legion Indemnity, the Company's policy-issuing
subsidiaries, added 35 new accounts in the first quarter of 1997 as compared to
31 in the first quarter of 1996. Legion's renewal rate was 86% for the first
three months of 1997 as compared to 77% in the corresponding 1996 period. In
California these companies added 4 new accounts in 1997 and their renewal rate
increased to 88% as compared to 62% in the 1996 first quarter. They had 309
active accounts at March 31, 1997, including 30 in California, as compared to
254 at March 31, 1996, of which 20 were in California.
Gross premiums written increased 130% to $131.8 million for the first three
months of 1997 as compared to $57.3 million in 1996 primarily as a result of the
number of Program Business accounts written. Program Business generally
involves greater premium volume per unit than Corporate Risk Management
business. Premiums earned increased 53% to $18.0 million in the first three
months of 1997, as compared to $11.8 million in 1996, this increase was also
primarily due to the expansion in the Program Business segment.
9
<PAGE>
The Company's Specialty Brokerage business segment provides access to
Alternative Risk Transfer insurers and reinsurers in Bermuda and Europe.
Specialty Brokerage produced $1.6 million of total Fee income in the first
quarter representing 7% of total Fee income. Specialty Brokerage fees grew by
11% in the first three months of 1997 from $1.4 million in the corresponding
1996 period. Renewal rates remained high in this segment at 82% for the first
three months of 1997 as compared to 87% in 1996. Profit margins decreased to
40% in the first quarter from 46% for the 1996 first quarter primarily as a
result of the Company's acquisition of all of the minority interest in one of
these businesses in the second quarter of 1996. Although accretive to earnings
per share, this acquisition lowered the business's profit margin by replacing a
charge for minority interest, which is not part of the profit margin
calculation, with a bonus expense which is.
Financial Services, the Company's newest business segment, is built on the
1996 acquisition of MRM Financial Services Ltd., (formerly The Hemisphere Group
Limited) which provides administrative services to offshore mutual funds and
other companies. Financial Services fees accounted for 7% of total Fee income
for the first three months of 1997 as opposed to 8% in the corresponding 1996
period. Fees from Financial Services increased in the quarter by 15% to $1.7
million over the 1996 corresponding period primarily as a result of an increase
in the number of mutual funds under management from 70 at March 31, 1996 to 98 a
year later. Renewal rates remained very high in this business segment at 99%
for the first three months of 1997 as compared to 98% in 1996. Profit margins
improved in 1997 to 25% in the quarter as opposed to 18% in the 1996 first
quarter.
Gross investment income increased by $0.6 million or 9% to $6.9 million in
the first quarter of 1997 over the corresponding 1996 period as a result of an
increase of 2% in gross invested assets to $454.9 million and a slight increase
in the yield on these assets. Net investment income, after adjusting for
investment income which is not included in the earnings of the Company,
increased by 15% in the first quarter as a result of an increase of 10% in net
invested assets to $391.2 million and an increase in the yield on these assets
to 6.2% from 5.9% in the first quarter of 1996.
<TABLE>
<CAPTION>
(In thousands)
TOTAL EXPENSES
THREE MONTHS ENDED MARCH 31,
1997 1996 INCREASE
------- -------- --------
<S> <C> <C> <C>
Operating expenses $14,130 $11,250 26%
Total insurance costs 18,268 11,811 55%
Interest expense 1,591 1,522 5%
Other expenses 237 109 118%
------- ------- ---
Total $34,226 $24,692 39%
======= ======= ===
</TABLE>
Total expenses increased 39% to $34.2 million for the three months as
compared to $24.7 million in 1996. Operating expenses increased by 26% to $14.1
million for the three months from $11.3 million in the corresponding 1996 period
partly as a result of the inclusion of SBU, for the first time in 1997, which
added $.6 million or 6% of the increase in Operating expenses in the three
months together with the growth in personnel and other expenses stemming from
the increased business in each segment. The increase in Total insurance costs
was the result of a 53% increase in Premiums earned in the first three months of
1997 over the corresponding 1996 period.
The effective tax rate in the quarter was 17.6% compared to 21.8% in the
corresponding 1996 period. This decline was due primarily to the tax benefit
derived from the exercise of employee stock
10
<PAGE>
options and an increase in earnings outside of the United States offset by a
decrease in the Company's holding of tax exempt municipal bonds.
FINANCIAL CONDITION AND LIQUIDITY
Total assets increased to $1.7 billion at March 31, 1997 from $1.6 billion
at December 31, 1996. Assets held in separate accounts which are principally
managed assets attributable to participants in the Company's IPC Programs
accounted for approximately 34% of Total assets at March 31, 1997 and 35% at
December 31, 1996. Total Shareholders' equity increased to $214.0 million at
March 31, 1997 from $208.0 million at December 31, 1996 primarily as a result of
Net income in the quarter and the issuance of common stock offset by the
movement on the unrealized loss on investments net of tax to $4.2 million at
March 31, 1997 from an unrealized gain at December 31, 1996 of $.1 million.
Return on equity was 20% for the first three months of 1997 compared to 22% in
the corresponding 1996 period.
11
<PAGE>
MUTUAL RISK MANAGEMENT LTD.
PART II- OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibit 11 - Computation of Net Earnings Per Common Share and Common
Share Equivalents.
Exhibit 27 - Financial Data Schedule
B. Reports on Form 8-K. No reports on Form 8-K were filed during the three
month period ended March 31, 1997.
12
<PAGE>
SIGNATURES
Pursuant to the rcquirements of the Securities Exchange Act of 1934, the
Registrant has du1y caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MUTUAL RISK MANAGEMENT LTD.
/s/ James C. Kelly
--------------------------------------------
James C. Kelly
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
AUTHORIZED SIGNATORY
Date. May 12, 1997
13
<PAGE>
Exhibit 11
MUTUAL RISK MANAGEMENT LTD.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
(In thousands except share and per share amounts)
<S> <C> <C>
Net income available to common shareholders $ 10,644 $9,141
======== ======
Weighted Averagc Common Shares
Common shares outstanding 18,584,083 17,928,146
---------- ----------
Common share equivalents associated with
options and Redeemable Common Shares:
Options 1,977,249 1,810,164
Redeemable Common Shares 468,584 468,584
--------- ---------
2,445,833 2,278,748
Common Shares purchased with
proceeds from options exercised (1,418,599) (1,166,941)
--------- ---------
1,027,234 1,111,807
---------- ----------
Total Weighted Average Common Shares 19,611,317 19,039,953
========== ==========
Earnings Per Common Share:
Net income available to common shareholders $O. 54 $0.48
====== =====
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MUTUAL RISK
MANAGEMENT LTD.'S FINANCIAL STATEMENTS AS OF MARCH 31,1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000826918
<NAME> MUTUAL RISK MANAGEMENT LTD.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 333,990
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 333,990
<CASH> 115,480
<RECOVER-REINSURE> 380,766
<DEFERRED-ACQUISITION> 25,151
<TOTAL-ASSETS> 1,732,278
<POLICY-LOSSES> 455,462
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2,952
0
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17,952
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</TABLE>
