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LONDON-One of Lloyd's of London's largest underwriting agency groups has attracted one of the largest U.S. insurance companies as a major shareholder.
Murray Lawrence Holdings Ltd. announced last week that a group of strategic investors led by State Farm Mutual Automobile Insurance Co. and Fund American Enterprises Holdings Inc. was investing 40 million pounds($63.1 million) in capital. State Farm and Fund American have invested 85% of the new capital to develop Murray Lawrence's insurance operations, including syndicate 2001, which writes all classes of business.
The investors will have a "significant minority interest" in Murray Lawrence, though how much has not been disclosed. However, "we will remain independent and privately owned," said Tony Hobrow, who became managing director of Murray Lawrence last month. Former Managing Director Paul Archard has become deputy chairman of the group's insurance services and runoff management subsidiary, the Whittington Group.
The investment is "good for us and good for Lloyd's" because it attracts one of the world's largest insurance companies, State Farm, said Mr. Hobrow.
"We look forward to building on a foundation of common interest and working together for mutual benefit," stated Roger Joslin, chairman of Bloomington, Ill.-based State Farm.
"We believe that our investment in Murray Lawrence will help its development at an interesting state in Lloyd's history," added Jack Byrne, chairman of Fund American, which has stakes in six regional or specialty insurers mainly in the United States through its wholly owned subsidiary, White Mountains Holdings Inc.
Murray Lawrence, one of Lloyd's largest operations, has three main divisions, namely managing agency Murray Lawrence & Partners Ltd., which manages syndicate 2001 with a 1997 capacity of 529.6 million pounds ($897.3 million); the Whittington Group, with estimated 1997 revenues of 30 million pounds ($50.8 million); and a few members agencies, which collectively provide capacity of 730 million pounds ($1.24 billion) throughout the market.
At year-end March 31, 1997, Murray Lawrence Holdings had pretax profits of 6.5 million pounds ($10.3 million) after a 14.6 million pounds ($24.7 million) deduction for the exceptional contribution to Lloyd's reconstruction and renewal plan.
This is Murray Lawrence Holdings' second attempt to find new investors. Last year, the group and Lloyd's corporate investor Masthead Insurance Underwriting P.L.C. were unable to agree on a merger (BI, Oct. 10, 1996)