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MRM Announces Closing of $112.5 million Investment By XL And Others

Hamilton, Bermuda: 17 May, 2001: Mutual Risk Management Ltd.(NYSE:MM, BSX:MM.BH) today announced that it has closed its previously announced transaction with XL Capital Ltd, First Union Capital Partners, High Ridge Capital and Century Capital Partners II. In the transaction the purchasers, which also included the Company's CEO Robert Mulderig, invested $112.5 million through the purchase of a newly created class of Senior Convertible Exchangeable Debentures. The Debentures carry a 9 3/8% annual coupon, have a five-year term and are convertible into Mutual Risk Common Shares at a conversion price of $7.00 per share. If not converted, the Debentures are subject to mandatory redemption by Mutual Risk in five years.

The principal use of the proceeds from the investment will be to increase the statutory capital of Mutual Risk's U.S. insurance companies, the Legion Companies. The investment is conditioned upon regulatory and lender approvals and the investors have a put right in the event such approvals are not forthcoming. In connection with the investment, Mutual Risk also paid down $10 million principal amount of its outstanding RHINO facility. The remaining $30 million principal amount of RHINOs were converted into a corresponding principal amount of Debentures.

Mutual Risk Management Ltd. provides risk management services to clients in the United States, Canada and Europe seeking alternatives to traditional commercial insurance for certain of their risk exposures. Mutual Risk Management Ltd. (MM) Common Shares are listed on the New York and Bermuda stock exchanges. This release may contain forward-looking statements. These statements, which reflect management's beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect the Company's future results, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's 2000 Annual Report on Form 10-K.