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Alexander & Alexander Services Inc – ‘10-K’ for 12/31/93

As of: Thursday, 3/31/94 · For: 12/31/93 · Accession #: 950112-94-842 · File #: 1-08282

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/31/94  Alexander & Alexander Svcs Inc    10-K       12/31/93   12:1.2M                                   Merrill Corporate/FA

Annual Report — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Alexander & Alexander                                 22    136K 
 2: EX-3.3      Articles of Incorporation/Organization or By-Laws     14     27K 
 3: EX-3.4      Articles of Incorporation/Organization or By-Laws     35     86K 
 5: EX-10.20    Material Contract                                      5     18K 
 6: EX-10.23    Material Contract                                      7     33K 
 7: EX-10.24    Material Contract                                     11     50K 
 8: EX-10.25    Material Contract                                    292    562K 
 9: EX-10.26    Material Contract                                    303    841K 
 4: EX-10.3     Material Contract                                      8     27K 
10: EX-13.0     Annual or Quarterly Report to Security Holders        50    241K 
11: EX-21       Subsidiaries of the Registrant                         8     46K 
12: EX-23.0     Consent of Experts or Counsel                          1      8K

10-K — Alexander & Alexander
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Certain Relationships and Related Transactions Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Directors and Executive Officers of the Registrant Exhibits, Financial Statement Schedules and Reports on Form 8-K Financial Statements and Supplementary Data Legal Proceedings Management Remuneration and Transactions Management's Discussion and Analysis of Financial Condition and Results of Operations Market for the Registrant's Common Equity and Related Stockholder Matters Properties Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Sphere Drake Submission of Matters to A Vote of Security Holders
1	1st Page - Filing Submission
2	Item 1. Business
5	Item 2. Properties
"	Item 3. Legal Proceedings
6	Sphere Drake
8	Item 4. Submission of Matters to A Vote of Security Holders
"	Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
9	Item 6. Selected Financial Data
"	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
"	Item 10. Directors and Executive Officers of the Registrant
11	Item 11. Management Remuneration and Transactions
"	Item 12. Security Ownership of Certain Beneficial Owners and Management
"	Item 13. Certain Relationships and Related Transactions
"	Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

10-K 1st Page of 22 TOC ↑Top Previous Next ↓Bottom Just 1st
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-8282

ALEXANDER & ALEXANDER SERVICES INC.
(Exact name of registrant as specified in its charter)

MARYLAND 52-0969822
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036 (212) 840-8500
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

[Enlarge/Download Table]

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
-------------------------------------------------------- --------------------------------------------------------

Common Stock, $1 par value New York Stock Exchange, Inc.
Preferred Share Purchase Rights
Common Stock, $1 par value International Stock Exchange of the United Kingdom and
Republic of Ireland, Ltd.

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

[Enlarge/Download Table]

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
-------------------------------------------------------- --------------------------------------------------------

Class A Common Stock, $.00001 par value None
Class C Common Stock, $1 par value International Stock Exchange of the United Kingdom and
11% Convertible Subordinated Debentures Republic of Ireland, Ltd.
due 2007

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 __

Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 or Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X].

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 17, 1994 was $761,094,623.

The number of shares of Common Stock, $1 par value, outstanding as of March
17, 1994 was 40,765,833.

The number of shares of Class A Common Stock, $.00001 par value,
outstanding as of March 17, 1994 was 2,409,600.

The number of shares of Class C Common Stock, $1 par value, outstanding as
of March 17, 1994 was 385,691.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's 1993 Annual Report to Stockholders are
incorporated by reference into Parts I and II of this report.

Portions of the Registrant's Proxy Statement for the 1994 Annual Meeting of
Stockholders are incorporated by reference into Part III of this report.

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10-K 2nd Page of 22 TOC 1st Previous Next ↓Bottom Just 2nd
PART I

ITEM 1. BUSINESS

GENERAL

Alexander & Alexander Services Inc., a holding company incorporated under
the laws of Maryland in 1973, together with its subsidiaries (collectively, the
"Company"), is a global insurance brokerage, risk management, and human resource
management consulting company. It is one of the leading insurance brokerage and
risk management companies worldwide. Through predecessor entities the Company
has been in business since 1899.

The Company has extensive international operations representing 46 percent,
47 percent and 45 percent of the Company's consolidated operating revenues for
the years ended December 31, 1993, 1992 and 1991, respectively. It operates from
offices located in more than 80 countries and territories through wholly owned
subsidiaries, affiliates and other servicing capabilities. The Company believes
that it is the second largest insurance broker in the world, based upon 1992
revenues, and that it is one of very few companies capable of providing
insurance brokerage, risk management and human resource management consulting
services on a global basis to clients with multinational operations.

The Company's clients are primarily commercial enterprises, including a
broad range of industrial, transportation, service, financial and other
businesses. Clients also include government and governmental agencies,
not-for-profit organizations and individuals.

The Company's core businesses include risk management and insurance
services, specialist insurance broking, reinsurance broking and human resource
management consulting.

INDUSTRY SEGMENTS

Insurance Services

The Company's principal industry segment is insurance services. For the
years ended December 31, 1993, 1992 and 1991, total revenues contributed by the
Company's insurance services segment accounted for 84 percent, 82 percent and 84
percent, respectively, of its consolidated operating revenues. The Company's
operations in this segment include risk management and insurance services,
specialist insurance broking and reinsurance broking. The Company's extensive
services permit it to handle diverse lines of coverage.

Risk Management and Insurance Services. For the years ended December 31,
1993, 1992 and 1991, the Company's risk management and insurance services
operations accounted for approximately 65 percent, 64 percent and 67
percent, respectively, of the Company's consolidated operating revenues.
The Company develops risk management programs and places coverage on behalf
of its clients directly with insurance companies, or indirectly through
specialist insurance brokers. Since January 1991, the Company's worldwide
risk management and insurance services have operated under a single
coordinated management structure. In 1993, the Company reorganized its
retail operations based on a global business segmentation strategy
initiated in 1992. In implementing this strategy, the Company formed risk
management and insurance services divisions to align its resources more
closely with the servicing requirements of its customers. In 1993, the
Company introduced the common trading name of "Alexander & Alexander"
throughout its global insurance services network in the United States, the
United Kingdom, Canada and Japan and in most of its markets in continental
Europe, Asia-Pacific and the Middle East. The Company's risk analysis and
management capabilities include a broad range of services such as risk
surveys and analyses, loss control and cost studies, formulation of safety
procedures and insurance programs. Through Anistics, the Company offers
financial and actuarial, risk information and strategic risk management
consulting to clients worldwide. Alexander Insurance Managers Limited
manages captive insurance companies and Alexander Trade Services arranges
political risk/export credit risk insurance programs and trade finance
packages worldwide. In the United States, Alexsis offers risk management
services, including risk analysis, claims administration and claims
information reporting. Through Alexander Underwriting Services, the Company
offers administration of runoff of insurance and reinsurance companies and
intermediaries.

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Specialist Insurance Broking. For the years ended December 31, 1993, 1992
and 1991, the Company's wholesale operations accounted for approximately 8
percent, 7 percent and 6 percent, respectively, of the Company's
consolidated operating revenues. As a specialist insurance broker, the
Company acts as an intermediary between the retail broker and insurance
companies and Lloyd's of London syndicates. London-based Alexander Howden
Limited places large and complex risks that require access to the London
and world markets. U.S.-based Alexander Howden North America, Inc. offers
excess, surplus and specialty lines placements. From Australia and
Singapore, Alexander Howden Asia Pacific specializes in specialist
insurance broking and facultative reinsurance.

Reinsurance Broking. For each of the years ended December 31, 1993, 1992
and 1991, the Company's reinsurance operations accounted for approximately
11 percent of the Company's consolidated operating revenues. As a
reinsurance broker, the Company places coverage on behalf of its insurance
or reinsurance company clients to reinsure all or a portion of the risk
underwritten by that insurance or reinsurance company. The Company's
worldwide reinsurance brokerage services, led by its U.K. subsidiary,
Alexander Howden Reinsurance Brokers Limited, arrange reinsurance programs
for Lloyd's of London syndicates and other insurance and reinsurance
companies worldwide. Alexander Reinsurance Intermediaries, Inc. provides a
full range of reinsurance services in the United States.

The Company is compensated for its broking services by commissions, usually
as a percentage of insurance premiums paid by the client, or by negotiated fees.
The Company may also receive contingent commissions which are based on the
volume and/or profitability of business placed with an insurance company over a
given period of time. The Company is generally compensated on a fee basis when
providing consulting and advisory services with respect to its clients' risk and
underwriting management programs. Premiums received from insureds but not yet
remitted to the carriers and claims payments received from carriers but not yet
remitted to the insureds are held as cash or investments in a fiduciary
capacity.

Human Resource Management Consulting

The Company offers global human resource management consulting services and
benefits broking through the Alexander Consulting Group Inc. ("ACG"). For the
years ended December 31, 1993, 1992 and 1991, total revenues contributed by the
Company's human resource management consulting services segment accounted for 16
percent, 18 percent and 16 percent, respectively, of the Company's consolidated
operating revenues. ACG provides advisory and support services in human resource
management, organizational effectiveness, integrated information technologies,
strategic health care and flexible compensation, retirement planning and
actuarial services, benefit plan design and implementation, international
benefits/compensation, and benefit plan investment consulting through Alexander
& Alexander Consulting Group Inc. in the U.S., Alexander Clay & Partners in
Europe and Alexander Consulting Group Limited in Canada and the Asia-Pacific
region. ACG provides broking services for group health and welfare, special
risk, and association/mass marketing insurance coverage through Alexander &
Alexander Benefits Services Inc. in the U.S. and as a division of the Alexander
Consulting Group Limited in Canada. ACG operates in 18 countries.

The Company is compensated for human resource management consulting
services on a fee basis, except in instances where it receives commissions from
insurance companies for the placement of individual and group insurance
contracts.

Financial Information about Industry Segments

Financial information related to the Company's industry segments and
geographical concentrations for each of the three years in the period ended
December 31, 1993 is contained in Note 15 of the Notes to Financial Statements
to the Company's 1993 Annual Report to Stockholders (the "1993 Annual Report")
and is incorporated herein by reference.

10-K 4th Page of 22 TOC 1st Previous Next ↓Bottom Just 4th
DISCONTINUED OPERATIONS

In March 1985, the Company discontinued the insurance underwriting
operations acquired in 1982 as part of the Alexander Howden acquisition. In
1987, the Company sold Sphere Drake Insurance Group (Sphere Drake) and is
currently running-off the Atlanta and Bermuda insurance companies.

The 1987 Sphere Drake sales agreement provides indemnities by the Company
for various potential liabilities including provisions covering future losses on
the insurance pooling arrangements from 1953 to 1967 between Sphere Drake and
Orion Insurance Company, a U.K.-based insurance company and future
losses pursuant to a stop loss reinsurance contract between Sphere Drake and
Lloyd's Syndicate 701.

As to operations in run-off, reinsurance agreements provide the Atlanta and
Bermuda insurance companies with insurance coverage for their reserves as of
December 31, 1988, and for up to $50 million of insurance coverage for potential
losses in excess of those reserves, subject to a deductible for one of the
Atlanta companies of $12.5 million. The agreements also provide for a
reinsurance premium adjustment, whereby at any time after January 1, 2001, the
reinsurance agreements can be terminated and any excess funds, net of any
reinsurance premium paid to a substitute reinsurance company, would be returned
to the Company.

The Sphere Drake indemnities and other liabilities arising out of the
discontinued operations are expected to be settled and paid over many years and
could extend over a 20 to 30 year period.

Further information concerning discontinued operations is contained in Note
6 of the Notes to Financial Statements to the Company's 1993 Annual Report and
is incorporated herein by reference.

ACQUISITIONS AND DISPOSITIONS

On November 30, 1993, the Company issued 2.3 million shares of its Common
Stock for all of the partnership interests of Clay & Partners, a U.K.-based
actuarial consulting operation. This acquisition has been accounted for as a
pooling of interests and, accordingly, the consolidated financial statements
have been restated for all periods prior to the acquisition.

Effective July 1, 1993, the Company acquired an 80 percent interest in a
Mexican insurance brokerage company which was accounted for as a purchase. The
purchase price was $16.9 million, including a $7.4 million cash payment and
notes payable of $9.5 million due in three installments from 1994 to 1996. The
excess of the purchase price over the fair value of net tangible assets acquired
was approximately $16 million. The effect of this acquisition was not
significant to the Company's consolidated financial statements.

During 1993, the Company sold three small operations for gross proceeds of
$9.6 million. Pre-tax gains of $3.9 million have been recognized on the sales
with resulting after-tax gains totaling $2.3 million or $0.05 per share.

During 1992, the Company sold three non-core businesses, including a
U.K.-based pension fund management operation, a Netherlands-based non-broking
operation and a U.S.-based administrator of workers compensation funds. Total
proceeds on these sales were $77.4 million with resulting pre-tax gains of $43.8
million ($28.5 million after-tax or $0.66 per share).

Further information concerning acquisitions and dispositions is contained
in Note 3 of the Notes to Financial Statements to the Company's 1993 Annual
Report and is incorporated herein by reference.

COMPETITION AND CUSTOMERS

Insurance broking and human resource management consulting are highly
competitive industries. The Company competes with other worldwide and national
companies, as well as regional and local firms. The principal methods of
competition in these businesses involve the nature, quality and cost of the
services the broker or consultant provides. As a service provider, the Company
also encounters
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competition with respect to attracting and retaining qualified employees. In
addition, insurance and reinsurance underwriters compete with the Company by
marketing and servicing their insurance products without the assistance of
insurance brokers. Also, certain insureds and groups of insureds have
initiated programs of self-insurance, thereby reducing or eliminating the
need for insurance brokers.

EMPLOYEES

The Company has approximately 14,500 employees. A small number of employees
in foreign countries are represented by labor unions. In addition, support
personnel in Australia are represented by an industrywide union. The Company
considers relations with its employees to be satisfactory.

REGULATIONS AND LICENSING

The activities of the Company related to insurance broking and human
resource management consulting services are subject to licensing requirements
and extensive regulation under the laws of the United States and each of its
various states, territories and possessions, as well as the laws of numerous
other countries in which the Company's subsidiaries conduct business. These laws
and regulations vary by jurisdiction. The appropriate regulatory authorities
generally have wide discretionary authority in adopting, amending and
implementing such regulations. In addition, certain of the Company's insurance
activities are governed by the rules of the Lloyd's of London insurance market
and other similar organizations.

In every state of the United States and most foreign jurisdictions, an
insurance broker or agent is required to have a license and such license may be
denied or revoked by the appropriate governmental agency for various reasons,
including the violation of its regulations and the conviction of crimes. In a
few jurisdictions, licenses are issued only to individual residents or locally
owned business entities. In certain of those jurisdictions, if the Company
itself has no subsidiary that is so licensed, the Company may from time to time
make arrangements with residents or business entities licensed to act on its
behalf in the jurisdiction.

The legality of the Company's operations depends on the continuing
retention and validity of the licenses under which it operates and on compliance
with a diverse and complex regulatory structure. The Company's licenses may not
be readily transferable in many jurisdictions. The Company expends significant
amounts of time and money to maintain its licenses and to ensure compliance with
applicable laws and regulations.

Because of its multistate and international operations, in some instances
the Company follows practices which are based upon its interpretation of laws or
regulations or upon the interpretation generally followed by the industry.
However, such interpretations may be in conflict with those of regulatory
authorities. Therefore, the possibility exists that the Company may be precluded
or temporarily suspended from continuing its business or otherwise penalized in
a given jurisdiction.

ITEM 2. PROPERTIES

Substantially all of the Company's worldwide facilities are leased. No
difficulty is anticipated in negotiating renewals as leases expire or in finding
other satisfactory space if the premises become unavailable.

Further information concerning the Company's obligations under capital
leases and noncancelable operating leases is contained in Notes 9 and 12 of the
Notes to Financial Statements to the 1993 Annual Report incorporated herein by
reference.

ITEM 3. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various claims and lawsuits
from both private and governmental parties, which include claims and lawsuits in
the ordinary course of business, consisting principally of alleged errors and
omissions in connection with the placement of insurance and in rendering
consulting services. In some of these cases, the remedies that may be sought or
damages
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claimed are substantial. Additionally, the Company and its subsidiaries are
subject to the risk of losses resulting from the potential uncollectibility of
insurance and reinsurance balances and claims advances made on behalf of
clients.

MUTUAL FIRE AND OTHER SHAND CONTINGENCIES

In December 1987, the Company sold Shand, Morahan & Company, Inc.
("Shand"), its domestic underwriting management subsidiary. The sales contract
between the Company and Shand's purchasers obligates the Company to certain
indemnities with respect to transactions involving Mutual Fire Marine and Inland
Insurance Company ("Mutual Fire"). The Company, Alexander & Alexander Inc., a
subsidiary of the Company, and Shand are defendants in a lawsuit brought in 1991
by the Pennsylvania Insurance Commissioner as rehabilitator of Mutual Fire. The
complaint alleges matters within the terms of such indemnification obligation.
The action, in the United States District Court for the Eastern District of
Pennsylvania and styled Constance B. Foster v. Alexander & Alexander Services
Inc. et al. (Civil Action No. 91-1179), arises out of Shand's relationship as
underwriting manager for Mutual Fire, now insolvent. The complaint alleges that
Shand, and in certain respects the Company, breached duties to, and agreements
with, Mutual Fire. In addition to claiming compensatory damages, the complaint
seeks punitive damages and recovery of certain commissions paid to Shand and the
Company. The complaint does not specify, to any meaningful degree, the amount of
alleged damages incurred or sought. In June 1993, however, the rehabilitator
through an expert's report has indicated to Shand and the Company that the
alleged damages are in the amount of $238.5 million. The Company and Shand
strongly disagree with the alleged damages in the rehabilitator's report and
have substantial arguments to sustain their position. The Company and Shand are
in the process of finalizing a series of expert reports that rebut the damage
number alleged in the rehabilitator's report. The case is likely to be placed on
the trial calendar in the summer of 1994. Management of the Company believes
that there are valid defenses to the allegations set forth in the complaint and
the Company is vigorously defending this action.

The sales contract between the Company and Shand's purchasers also
obligates the Company to certain other indemnities with respect to transactions
involving Mutual Fire. In November 1992, the purchaser, by written notice,
asserted indemnification claims related to reinsurance recoverables due from
Mutual Fire. In February 1993, the Company agreed to settle certain of these
claims. The Company has estimated its exposure under this settlement, net of
anticipated recoveries from certain trusteed assets held for Shand's benefit of
$10.8 million and net of $4.6 million of set-offs, and established a reserve as
part of the 1992 special charge described in Note 4 of the Notes to Financial
Statements to the Company's 1993 Annual Report. The Mutual Fire rehabilitator
has challenged Shand's right to recover these assets and the utilization of such
set-offs.

The purchaser of Shand has also notified the Company of claims relating to
reinsurance recoverables based on alleged errors and omissions of Shand in
placing reinsurance. The allegations have, so far, led to the institution of
four arbitration proceedings involving certain of these reinsurers. The amount
at issue aggregates $33 million. These claims are potentially subject to
indemnification by the Company under the terms of the sales agreement. Shand is
actively disputing these allegations. However, pursuant to the terms of the
indemnity, the Company may be responsible for the costs of these proceedings and
related expenses. Until there is a final determination that a reinsurer has a
right to withhold payment of a reinsurance recoverable, based on an actual error
or omission of Shand, the Company believes that its exposure under the indemnity
is limited to the above-mentioned costs and expenses. The Company intends to
vigorously dispute these claims.

SPHERE DRAKE

In November 1984, Sphere Drake Insurance Company plc ("Sphere Drake")
issued a writ against, and served points of claim upon, Mark Edmond Denby,
individually and as a representative of the Names on Lloyd's Syndicate 701,
pursuant to a stop-loss reinsurance contract between Sphere Drake and Syndicate
701 and for a determination of continuing stop-loss coverage protecting Sphere
Drake
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under the contract. A defense was entered in Sphere Drake Insurance Company plc
v. Mark Edmond Denby, 1984 S. No. 6548 (Q.B. Commercial Court). The Company has
indemnified the purchasers of Sphere Drake in connection with this litigation. A
trial was held in late 1991 and an adverse decision was issued in April 1992.
The Company's appeal of the decision was heard in October 1993 with the U.K.
Court of Appeals upholding the adverse decision of the lower courts. In the
Company's opinion this indemnity is limited in amount pursuant to the terms of
the stop-loss reinsurance contract.

GLICKMAN

On November 4, 1993, a class action suit was filed against the Company and
two of its directors and officers, Tinsley H. Irvin and Michael K. White, in the
United States District Court for the Southern District of New York under the
caption Harry Glickman v. Alexander & Alexander Services Inc., et al. (Civil
Action No. 93 Civ. 7594). In response to defendants' motion to dismiss an
amended complaint was filed on February 16, 1994 purportedly on behalf of a
class of persons who purchased the Company's Common Stock during the period May
1, 1991 to September 28, 1993, alleging that during said period the Company's
financial statements contained material misrepresentations as a result of
inadequate reserves established by the Company's subsidiary, Alexander
Consulting Group Inc., for unbillable work-in-progress. The amended complaint
seeks damages in an unspecified amount, as well as attorneys' fees and other
costs, for alleged violations of the federal securities laws. Management of the
Company believes there are valid defenses to the allegations set forth in the
complaint and the Company intends to vigorously dispute this claim. Management
presently believes that this claim will not be material to the Company's
financial condition.

PINE TOP AND RELATED CONTINGENCIES

Claims have been or may be asserted against the Company and certain of its
subsidiaries alleging, among other things, that certain Alexander Howden
subsidiaries accepted, on behalf of certain insurance companies, insurance or
reinsurance at premium levels not commensurate with the level of underwriting
risks assumed and retroceded or reinsured those risks with financially unsound
reinsurance companies. Claims asserting these allegations are pending in suits
filed in New York and Ohio. In New York, a suit was brought against the Company
in 1985 (Pine Top Insurance Company, Ltd. v. Alexander & Alexander Services
Inc., et al., 85 Civ. 9860 (RPP) (S.D.N.Y.)). Plaintiff in this case seeks
compensatory and punitive, as well as treble damages under RICO totaling
approximately $87 million, arising from alleged RICO violations, common law
fraud, breach of contract and negligence. Discovery in this case has been
substantially completed and the trial is scheduled to begin in June 1994. In a
similar New York action brought in 1988 (Certain Underwriters at Lloyd's of
London Subscribing to Insurance Agreement ML8055801, et al. v. Alexander &
Alexander Services Inc., et al., formerly captioned Dennis Edward Jennings v.
Alexander & Alexander Europe plc, et al., 88 CIV. 7060 (RO) (S.D.N.Y.)),
plaintiffs seek compensatory and punitive damages, as well as treble damages
under RICO totaling $36 million. Discovery in this case remains to be concluded
and no trial date has been set. In the Ohio action brought in 1985 (The Highway
Equipment Company, et al. v. Alexander Howden Limited, et al. (Case No.
1-85-01667, U.S. Bankruptcy Court, So. Dist. Ohio, Western Div.)), plaintiffs
seek compensatory and punitive damages, as well as treble damages under RICO
totaling $24 million. In April 1993, the bankruptcy court ordered a directed
verdict in the Company's favor. That verdict was affirmed on March 14, 1994 in a
decision by the U.S. District Court for the Southern District of Ohio and
plaintiffs have 30 days in which to appeal the decision to the U.S. Court of
Appeals for the Sixth Circuit. Management of the Company believes there are
valid defenses to the claims asserted and the Company is vigorously defending
the pending actions.

In a New York action, which was initially commenced in 1984, a subsidiary
of the Company asserted claims against two reinsurers and their parent company
for breach of certain reinsurance contracts and tortious interference with these
contracts (American Special Risk Insurance Co. v. Delta America Re Insurance
Co., et al., 84 Civ. 1329 (S.D.N.Y.)). One of the reinsurers counterclaimed,
alleging RICO violations, common law fraud and negligence and claiming
compensatory and punitive damages,
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as well as treble damages under RICO. The action was settled in December 1993 by
payment to the Company's subsidiaries of $8.1 million and the counterclaim
against the Company's subsidiaries was voluntarily dismissed in February 1994.

In a Florida action brought in 1986 (The Staff Fund, Inc. f/k/a the North
Broward Hospital District Active Medical Staff Self-Insurance Fund, Inc. v.
Alexander & Alexander, Inc., a Florida Corporation, et al., Case No. 86-05314 CN
(Cir. Ct., Broward Cty., Fl.)), the plaintiff sought compensatory and punitive
damages of over $1.7 million. This action was settled to the parties
satisfaction on March 16, 1994.

IN RE INSURANCE ANTITRUST LITIGATION

One of the Company's subsidiaries, Thomas A. Greene & Company Inc., now
operating as Alexander Reinsurance Intermediaries, Inc., is one of 31 defendants
named in a series of antitrust actions which were filed beginning in March 1988
by the attorneys general of 18 states and by 20 private parties. All actions
have been consolidated in the United States District Court for the Northern
District of California (In Re Insurance Antitrust Litigation, C-88-1688-WWS
(N.D. Cal.)). The defendants, which include various insurance and reinsurance
companies, reinsurance brokers and trade associations, are alleged to have
manipulated the market for commercial insurance by, among other things,
conspiring to restrict the terms of, and hence the availability of, general
liability insurance. Plaintiffs seek to enjoin further violations and to order a
restructuring of the insurance industry, in addition to recovering damages for
injuries to both public entities and the private party plaintiffs. In September
1989, the court granted defendants' Motion for Summary Judgment on various
grounds. The plaintiffs appealed the matter to the Ninth Circuit Court of
Appeals, which reversed the decision of the District Court. The United States
Supreme Court granted certiorari and in June 1993 affirmed in part and reversed
in part the decision of the Ninth Circuit Court of Appeals and remanded the case
for further proceedings. Management of the Company believes that there are valid
defenses to the allegations asserted and the Company is vigorously defending
this action.

Further information concerning the above-mentioned legal contingencies is
contained in Notes 6, 13, and 14 of the Notes to the Financial Statements to the
Company's 1993 Annual Report and is incorporated herein by reference. These
contingent liabilities involve significant amounts, and while it is not possible
to predict with certainty the outcome of such contingent liabilities, the
applicability of coverage for such matters under the Company's professional
liability insurance programs, or their financial impact on the Company,
management presently believes that such impact will not be material to the
Company's financial condition. However, it is possible that future developments
with respect to these matters could have a material effect on future interim or
annual results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders, through the solicitation of
proxies or otherwise.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Incorporated herein by reference is information concerning the market price
and dividends per share of the Company's Common Stock contained in Note 16 of
the Notes to Financial Statements and information under the caption "Approximate
Number of Equity Security Holders," in the Company's 1993 Annual Report. Also
incorporated herein by reference is information concerning restrictions on the
payment of dividends on the Company's Common Stock contained in Note 11 of the
Notes to the Financial Statements to the Company's 1993 Annual Report.

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ITEM 6. SELECTED FINANCIAL DATA

Information under the caption "Selected Financial Data" in the 1993 Annual
Report is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Information under the caption "Management's Discussion and Analysis of
Financial Condition & Results of Operations" in the Company's 1993 Annual Report
is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following are incorporated herein by reference to the 1993 Annual
Report:

Independent Auditors' Report

Consolidated Statements of Operations for each of the three years in the
period ended December 31, 1993

Consolidated Balance Sheets, December 31, 1993 and 1992

Consolidated Statements of Cash Flows for each of the three years in the
period ended December 31, 1993

Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended December 31, 1993

Notes to Financial Statements, including unaudited quarterly financial
data

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

During the fiscal years ended December 31, 1993 and 1992 and in the
subsequent interim period, there has been no change in, or disagreements on
accounting matters with, the Company's independent auditors.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this item as to directors is included under the
caption "Nominees for Election" in the Company's Proxy Statement for the 1994
Annual Meeting of Stockholders (The "1994 Proxy Statement") and is incorporated
herein by reference. Information required by this item is included under the
caption "Compliance with Section 16(a) of the Securities Exchange Act of 1934"
in the 1994 Proxy Statement and is incorporated herein by reference.

The following sets forth information with respect to executive officers of
the Company and a former executive officer:

LAWRENCE E. BURK, 52, has served as chairman and chief executive officer of
Alexander & Alexander Inc. ("A&A Inc."), the Company's U.S. retail broking
subsidiary since November 1993. Since joining the Company in 1970, he has held
various senior management positions for the Company's retail broking operations,
including global business development director, January 1991 to October 1993,
and U.S. eastern regional director, May 1989 to January 1991.

RONALD W. FORREST, 51, former executive officer of the Company who retired
January 1, 1994, and who served as a senior vice president of the Company and as
chairman and chief executive officer of A&A Inc., from February 1989 and
September 1991, respectively, until his retirement. From 1985 until his
retirement, he held various executive, management and operating positions with
the Company.

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RONALD L. HENDRICK, 48, has served as controller and vice president of the
Company since May 1993. From February 1988 to March 1993 he was vice president
and controller of the Adolph Coors Company and director of treasury management
from November 1987 to January 1989. From 1972 to 1987, he held various financial
and management positions with subsidiaries of Coors.

RONALD A. ILES, 58, has served as a senior vice president of the Company
since 1985 and is responsible for general management of the Company's
reinsurance operations. Since 1981, he has been chairman of Alexander Howden
Reinsurance Brokers Limited, a U.K.-based subsidiary acquired in 1982, which
manages the Company's worldwide reinsurance operations. In January 1993, he was
appointed chairman of Alexander & Alexander Services UK plc.

TINSLEY H. IRVIN, 60, announced his retirement from the Company effective
April 1, 1994, having served as chief executive officer of the Company from May
1987 through March 1994, as chairman of the board from May 1988 to January 1994,
and as president from March 1982 to May 1993. He has served in various executive
management and operating positions for the Company and its predecessor entities
since 1953. Mr. Irvin has been a director of the Company and its predecessor
entities since 1970.

DANIEL E. KESTENBAUM, 60, has served as a senior vice president of the
Company and director of quality and professional practice since May 1993. Mr.
Kestenbaum joined the Company in 1974 and has held various management positions
with the Company's U.S. broking operation, including senior vice president of
A&A Inc. from October 1992 to May 1993 and chief executive officer of Alexander
Howden North America, Inc., the Company's U.S. wholesale broker, from January
1986 to September 1992.

ROBERT H. MOORE, 53, has served as a senior vice president since November
1985 and is responsible for management of the Company's corporate relations,
including Alexander & Alexander Government and Industry Affairs Inc. in
Washington, D.C. He has served in various management and advisory capacities
since joining the Company in 1977.

DAN R. OSTERHOUT, 43, has served as a senior vice president of the Company
since January 1988, with responsibility for management of the Company's
underwriting exposures. In January 1994, he was appointed chairman and chief
executive officer of Alexander Underwriting Services, a new business unit
offering administration of run-off of insurance and reinsurance companies and
intermediaries. From September 1991 to December 1993, he also served in various
executive positions with A&A Inc., including president and chief operating
officer. He has held various other financial and management positions since
joining the Company in 1970.

RONALD J. ROESSLER, 54, has served as general counsel and senior vice
president of the Company since 1976 and 1988, respectively. He joined the
Company in 1972.

PAUL E. ROHNER, 57, has served as chief financial officer and senior vice
president of the Company since 1987. Prior to joining the Company, he was chief
financial officer with Tambrands Inc. and Dekalb Corporation.

DONALD L. SEELEY, 50, has served as a senior vice president of the Company
since May 1992 and as chief executive officer of the Alexander Consulting Group
Inc., the Company's human resource management subsidiary, since October 1993.
From September 1988 to September 1993 he was responsible for the management of
the Company's treasury, tax, strategic planning and corporate secretary
functions, having served as vice president from September 1988 to April 1992.
From 1982 until joining the Company, he held various executive financial
management positions, including treasurer, with United Airlines and G.D. Searle
& Company.

THOMAS SOPER III, 44, has served as senior vice president of corporate
human resources since May 1991 and as vice president from April 1986 to April
1991. From 1982 until joining the Company, Mr.
9

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Soper held various human resource management positions with General Electric
Financial Services and International Playtex Inc.

MICHAEL K. WHITE, 55, has served as president and chief operating officer
of the Company since May 1993. Since January 1993, he has had executive
management responsibility for the Company's global operations. From September
1990 to May 1993, he served as a deputy chairman of the Company and from May
1987 to May 1993 as an executive vice president. He has held various executive
and operating positions with the Company since 1983 and various managerial
positions with the Company and its predecessor entities since 1970. Mr. White
has been a director of the Company since 1983, and of RSC since January 1989.

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS

Information included under the caption "Executive Compensation" in the
Company's 1994 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information included under the caption "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Directors and Executive Officers"
in the 1994 Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information included under the caption "Certain Transactions" in the 1994
Proxy Statement is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) and (a)(2): The financial statements, supplemental schedules and
related information are listed in the accompanying table of contents on page 15
of this report.

(a)(3) Exhibits:

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3.1 --Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference
to the Company's Annual Report on Form 10-K for the year ended December 31, 1991).
3.2 --Articles Supplementary of the Company, dated March 18, 1993 (incorporated herein by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1992).
3.3 --Articles Supplementary of the Company, dated December 3, 1993.
3.4 --Amended and Restated Bylaws of the Company, dated as of January 14, 1994.
4.1 --Indenture, dated as of February 1, 1982, between the Company and Morgan Guaranty Trust Company of
New York, as Trustee, establishing the Company's 11% Convertible Subordinated Debentures due 2007
(incorporated herein by reference to Amendment No. 1 to Registration Statement on Form S-7,
Registration No. 2-74794 filed with the Commission on November 10, 1981).
4.2 --Rights Agreement dated as of June 11, 1987, amended and restated as of March 27, 1990, between
the Company and First Chicago Trust Company of New York, formerly Morgan Shareholder Services
Trust Company, as Rights Agent (incorporated herein by reference to Registration Statement on
Form 8-A filed with the Commission on

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June 19, 1987, as amended by Amendment No. 1 on Form 8 filed on March 28, 1990 and Amendment No.
2 on Form 8 filed on April 23, 1992).
4.3 --Form of Trust Agreement dated as of June 11, 1987, amended and restated as of March 28, 1990,
between the Company and Montreal Trust Company of Canada, as successor to The Canada Trust
Company (incorporated herein by reference to Registration Statement on Form 8-A filed with the
Commission on June 19, 1987 as amended by Amendment No. 1 on Form 8 filed on March 28, 1990).
The Company hereby agrees, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, to furnish to the
Commission upon request a copy of each instrument with respect to long-term debt of the Company
or its subsidiaries.
10.1* --Description of the Company's Incentive Compensation Program, amended and restated as of September
22, 1988 (incorporated herein by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.2* --The Company's 1988 Long Term Incentive Compensation Plan, as amended (the "1988 Plan") and U.K.
Executive Share Option Scheme under the 1988 Plan (incorporated herein by reference to the
Company's Registration Statement on Form S-8 Registration No. 33-60054 filed with the Commission
on March 26, 1993).
10.3* --1993 Optionplan of Alexander & Alexander B.V. under the 1988 Plan.
10.4* --Form of the Company's 1988 Plan Stock Option Award Agreement, as amended and restated
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1990).
10.5* --Form of the Company's 1988 Plan Restricted Stock Award Agreement (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.6* --Form of the Company's 1988 Plan Other Stock Based Award Agreement (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.7* --Form of the Company's 1988 Plan Performance Share/Unit Award Agreement (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.8* --The Company's 1982 Key Employee Stock Option Plan, as amended (the "1982 Plan") (incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31,
1987), as amended by resolutions of the Board of Directors of the Company, dated September 22,
1988 (incorporated herein by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1988); and U.K. Executive Share Option Scheme within the 1982 Plan, as amended
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1988).
10.9* --Form of the Company's 1982 Plan Stock Option Agreement (incorporated herein by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.10* --Form of the Company's 1982 Plan Limited Stock Appreciation Rights Agreement (incorporated herein
by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.11* --Alexander & Alexander Services Inc. and Subsidiaries Supplemental Executive Retirement Plan for
Senior Management, amended and restated as of January 1, 1989 (the "SERP") (incorporated herein
by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1989).
10.12* --Resolution of the Compensation and Benefits Committee of the Company, dated December 8, 1988,
amending the benefits of Tinsley H. Irvin under the SERP

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(incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992).
10.13* --Alexander & Alexander U.K. Pension Scheme (formerly, Alexander Stenhouse Pension Scheme) and
Alexander & Alexander U.K. Voluntary Equity Scheme (formerly Alexander Stenhouse Voluntary Equity
Scheme) (incorporated herein by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1985).
10.14* --Amendment to Alexander & Alexander U.K. Pension Scheme, effective as of February 1, 1991
(incorporated by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991).
10.15* --The Company's Senior Executive Severance Plan, effective January 1, 1989 (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1988), as
amended by resolutions of the Compensation and Benefits Committee of the Company, dated November
16, 1989, adopting Option C to the Company's Senior Executive Severance Plan (incorporated herein
by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1989).
10.16* --Form of Termination Protection Agreement, effective as of July 1, 1989, amending Exhibit D to
Exhibit 10.8 (incorporated herein by reference to the Company's Report on Form 10-K for the year
ended December 31, 1989).
10.17* --Non-Employee Director Retirement Plan, effective as of June 1, 1990 (incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1989).
10.18* --Employment Agreement between Michael K. White and the Company effective as of June 1, 1990
together with amendment dated October 1, 1990 (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1990).
10.19* --Employment Agreement between Ronald W. Forrest and A.R. Stenhouse Reed Shaw & Partners Limited,
dated October 22, 1979, together with amendments dated March 11, 1992 and dated March 12, 1992
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991).
10.20* --Retirement Agreement between Ronald W. Forrest and the Company, dated November 18, 1993.
10.21* --Contingent Agreement between Ronald A. Iles and the Company, dated January 5, 1988 (incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year ended December 31,
1992).
10.22* --Consulting Agreement between William M. Wilson and Alexander & Alexander Services UK plc, dated
as of March 18, 1993 (incorporated herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1992).
10.23* --Transition Employment, Retirement and Consulting Agreement between Tinsley H. Irvin and the
Company, dated March 16, 1994.
10.24* --Employment Agreement among Lawrence E. Burk, Alexander & Alexander Inc. and the Company, dated
October 25, 1993.
10.25 --Agreement relating to the Company's indemnification in connection with the sale of Shand Morahan
& Co. by the Company: (i) Stock Purchase Agreement, dated as of October 7, 1987 by and between
F-M Acquisition Corporation and Alexander & Alexander Inc. (including certain exhibits thereto);
(ii) Amendment No. 1 to the Stock Purchase Agreement, dated as of February 15, 1989 between F-M
Acquisition Corporation and Alexander & Alexander Inc.; (iii) Waiver and Consent, dated December
18, 1990, by Alexander & Alexander Inc. to a merger of F-M Acquisition Corporation with
Shand/Evanston Group, Inc.; (iv) Confirmation and Assumption Agreement, dated as of December 18,
1990, by Shand/Evanston Group for the benefit

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of Alexander & Alexander Inc.; and (v) Letter Agreement, dated December 18, 1990 among Alexander
& Alexander Inc., F-M Acquisition Corporation, Shand/Evanston Group, Inc. and Markel Corporation.
10.26 --Agreement relating to the Company's indemnification in connection with the sale of Sphere Drake
Insurance Group plc: Share Purchase Agreement between Sphere Drake Acquisitions (U.K.) Limited
and Alexander Stenhouse & Partners Ltd., dated as of October 9, 1987, including all exhibits and
schedules thereto.
13.0 --1993 Annual Report to Stockholders.
21.0 --Subsidiaries of the Registrant.
23.0 --Independent Auditors' Consent.

(b) Reports on Form 8-K:

In a report filed on Form 8-K, dated December 15, 1993, the Company reported the
acquisition by the Company of all of the partnership interests of Clay &
Partners, a U.K.-based actuarial consulting operation in exchange for
2.27 million shares of the Company's Common Stock.

In a report filed on Form 8-K, dated January 17, 1994, the Company noticed
certain management and corporate governance changes, including the appointment
of Robert E. Boni as chairman of the Board of Directors of the Company
and the retirement of T.H. Irvin, chairman and chief executive officer.

In a report filed on Form 8-K, dated February 25, 1994, the Company reported
earnings for the year ended and the quarter ended December 31, 1993.

---------------

* The referenced exhibit is a management contract or compensation plan or
arrangement described in Item 601(b)(10)(iii) of Regulation S-K.

10-K 15th Page of 22 TOC 1st Previous Next ↓Bottom Just 15th
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 31st day of
March, 1994.

ALEXANDER & ALEXANDER SERVICES INC.

By: /s/ TINSLEY H. IRVIN March 31, 1994
_____________________________________________
TINSLEY H. IRVIN DATE
Chief Executive Office and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacity and on the dates indicated.

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/s/ TINSLEY H. IRVIN March 31, 1994 /s/ PETER C. GODSOE March 31, 1994
----------------------------------------- -------------------------------------------
TINSLEY H. IRVIN DATE PETER C. GODSOE DATE
Chief Executive Officer and Director Director

/s/ PAUL E. ROHNER March 31, 1994 /s/ ANGUS M.M. GROSSART March 31, 1994
----------------------------------------- --------------------------------------------
PAUL E. ROHNER DATE ANGUS M.M. GROSSART DATE
Senior Vice President and Chief Financial Officer Director

/s/ RONALD L. HENDRICK March 31, 1994 /s/ VINCENT R. MCLEAN March 31, 1994
----------------------------------------- --------------------------------------------
RONALD L. HENDRICK DATE VINCENT R. MCLEAN DATE
Vice President and Controller Director

/s/ ROBERT E. BONI March 31, 1994 /s/ MICHAEL K. WHITE March 31, 1994
----------------------------------------- --------------------------------------------
ROBERT E. BONI DATE MICHAEL K. WHITE DATE
Chairman of the Board of Directors and Director Director

/s/ KENNETH BLACK, JR. March 31, 1994 /s/ WILLIAM M. WILSON March 31, 1994
----------------------------------------- -------------------------------------------
KENNETH BLACK, JR. DATE WILLIAM M. WILSON DATE
Director Director

/s/ JOHN A. BOGARDUS, JR. March 31, 1994
-----------------------------------------
JOHN A. BOGARDUS, JR. DATE
Director

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ALEXANDER & ALEXANDER SERVICES INC. AND SUBSIDIARIES
TABLE OF CONTENTS
FINANCIAL STATEMENTS AND RELATED INFORMATION

The following consolidated financial statements and related information of
Alexander & Alexander Services Inc. and subsidiaries, included in the Company's
1993 Annual Report to Stockholders, are incorporated by reference to Item 8 of
this report:

Independent Auditors' Report

Consolidated Statements of Operations for each of the three years in
the period ended December 31, 1993

Consolidated Balance Sheets, December 31, 1993 and 1992

Consolidated Statements of Cash Flows for each of the three years in
the period ended December 31, 1993

Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended December 31, 1993

Notes to Financial Statements, including unaudited quarterly financial
data

The following supplemental schedules and related information of Alexander &
Alexander Services Inc. and its consolidated subsidiaries are included in pages
16 through 20 of this report:

Independent Auditors' Report

Schedule II-- Amounts Receivable from Officers and Employees of the
Company and Its Affiliates

Schedule VIII--Valuation and Qualifying Accounts

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INDEPENDENT AUDITORS' REPORT

To ALEXANDER & ALEXANDER SERVICES INC.:

We have audited the consolidated financial statements of Alexander &
Alexander Services Inc. and Subsidiaries as of December 31, 1993 and 1992, and
for each of the three years in the period ended December 31, 1993, and have
issued our report thereon dated February 25, 1994; such consolidated financial
statements and report are included in your 1993 Annual Report to Stockholders
and are incorporated herein by reference. Our audits also included the
consolidated financial statement schedules of Alexander & Alexander Services
Inc. and Subsidiaries, listed in the accompanying table of contents referred to
under Item 14. These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such consolidated financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.

DELOITTE & TOUCHE

Baltimore, Maryland
February 25, 1994

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SCHEDULE II

ALEXANDER & ALEXANDER SERVICES INC. AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
OF THE COMPANY AND ITS AFFILIATES
FOR THE YEAR ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS)

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COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
--------------------------------------------- ----------- ----------- ---------------------------- ----------------------
DEDUCTIONS BALANCE AT
---------------------------- END OF YEAR
BALANCE AT FOREIGN ----------------------
BEGINNING AMOUNTS CURRENCY NON-
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED TRANSLATION CURRENT CURRENT
--------------------------------------------- ----------- ----------- ----------- --------------- ----------- ---------

Ball, G.(1).................................. $ 150 $ -- $ 9 $ -- $ 9 $ 132
Caputo, C.(1)................................ 150 -- -- -- -- 150
Clay, R.(1).................................. 200 -- 200 -- -- --
Gunnin, T.(1)................................ 274 -- 8 -- 8 258
Fotheringham, S.(1).......................... -- 366 -- 6 360 --
Hands, K.(1)................................. 111 -- 111 -- -- --
Horrick, J.S.(1)............................. 168 -- 10 8 9 141
Kiessling, E.(1)............................. 500 -- -- -- -- 500
Osterhout, D.R.(1)........................... 184 11 -- -- 195 --
Reece, J.(1)................................. 300 24 24 -- 300 --
Swartout, D.(1).............................. 234 -- 5 11 4 214
----------- ----------- ----------- ----- ----------- ---------
Total................................... $ 2,271 $ 401 $ 367 $ 25 $ 885 $ 1,395
----------- ----------- ----------- ----- ----------- ---------
----------- ----------- ----------- ----- ----------- ---------

---------------

Notes:

(1) Represents housing loan due to employee relocation.

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SCHEDULE II

ALEXANDER & ALEXANDER SERVICES INC. AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
OF THE COMPANY AND ITS AFFILIATES
FOR THE YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)

[Enlarge/Download Table]

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
---------------------------------- ----------- ----------- ----------------------------------------- ----------------------
DEDUCTIONS BALANCE AT
----------------------------------------- END OF YEAR
BALANCE AT AMOUNTS FOREIGN ----------------------
BEGINNING AMOUNTS WRITTEN CURRENCY NON-
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED OFF(2) TRANSLATION CURRENT CURRENT
---------------------------------- ----------- ----------- ----------- ----------- --------------- ----------- ---------

Ball, G. (1)...................... $ 150 $ -- $ -- $ -- $ -- $ 4 $ 146
Caputo, C. (1).................... 150 -- -- -- -- -- 150
Clay, R.(1)....................... 210 -- -- 10 -- -- 200
Greig, W.D.(1).................... 187 -- 176 -- 11 -- --
Gunnin, T.(1)..................... 275 -- 1 -- -- -- 274
Hands, K.(1)...................... -- 111 -- -- -- -- 111
Horrick, J.S.(1).................. 194 -- 9 -- 17 9 159
Kiessling, E.(1).................. 500 -- -- -- -- -- 500
Osterhout, D.R.(1)................ 184 12 12 -- -- 4 180
Paulding, J.(1)................... 250 -- 250 -- -- -- --
Reece, J.(1)...................... 324 24 48 -- -- -- 300
Swartout, D.(1)................... -- 248 2 -- 12 4 230
----------- ----------- ----------- ----- ----- ----- ---------
Total........................ $ 2,424 $ 395 $ 498 $ 10 $ 40 $ 21 $ 2,250
----------- ----------- ----------- ----- ----- ----- ---------
----------- ----------- ----------- ----- ----- ----- ---------

---------------

Notes:

(1) Represents housing loan due to employee relocation.

(2) Represents portion of debt forgiven.

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SCHEDULE II

ALEXANDER & ALEXANDER SERVICES INC. AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
OF THE COMPANY AND ITS AFFILIATES
FOR THE YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)

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Ball, G.(1).................................. $ -- $ 150 $ -- $ -- $ -- $ 150
Berrio, A.D.(2).............................. 108 30 51 2 85 --
Broadbent, A.(1)............................. 231 -- 213 18 -- --
Buck, K.(1).................................. 100 7 25 -- 26 56
Caputo, C.(1)................................ 150 -- -- -- -- 150
Clay, R.(1).................................. 210 -- -- -- 10 200
Greig, W.D.(1)............................... 193 -- -- 6 187 --
Gunnin, T.(1)................................ 26 249 -- -- -- 275
Hester, A.(1)................................ 173 -- 149 24 -- --
Horrick, J.S.(1)............................. 201 -- 8 (1) 8 186
Kemp, J.(3).................................. 176 -- 176 -- -- --
Kiessling, E.(1)............................. -- 500 -- -- -- 500
Mills, M.F.(1)............................... 101 -- 10 -- 10 81
Murphy, J.(1)................................ 159 3 162 -- -- --
Osterhout, D.R.(1)........................... 184 12 12 -- 184 --
Paulding, J.(1).............................. -- 250 -- -- 250 --
Reece, J.(1)................................. 300 24 -- -- 24 300
----------- ----------- ----------- ----- ----------- ---------
Total................................... $ 2,312 $ 1,225 $ 806 $ 49 $ 784 $ 1,898
----------- ----------- ----------- ----- ----------- ---------
----------- ----------- ----------- ----- ----------- ---------

---------------

Notes:

(1) Represents housing loan due to employee relocation.

(2) Represents personal assistance loan.

(3) Represents obligation for compensation advanced to employee.

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SCHEDULE VIII

ALEXANDER & ALEXANDER SERVICES INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS)

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COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
------------------------------------------------ ----------- ------------------------ ------------- -----------
ADDITIONS
------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS(1) DEDUCTIONS(2) OF YEAR
------------------------------------------------ ----------- ----------- ----------- ------------- -----------

Allowance for doubtful accounts receivable:
Year Ended December 31, 1991(3)............... $ 24,350 $ 4,114 $ (2,160) $ 1,896 $ 24,408
----------- ----------- ----------- ------------- -----------
----------- ----------- ----------- ------------- -----------
Year Ended December 31, 1992(3)............... $ 24,408 $ 5,424 $ (5,081) $ 2,632 $ 22,119
----------- ----------- ----------- ------------- -----------
----------- ----------- ----------- ------------- -----------
Year Ended December 31, 1993.................. $ 22,119 $ 3,793 $ (2,019) $ 3,566 $ 20,327
----------- ----------- ----------- ------------- -----------
----------- ----------- ----------- ------------- -----------

---------------

Notes:

(1) Recoveries and adjustments for foreign currency translation.

(2) Writeoffs of receivables which are not recoverable.

(3) Restated to reflect acquisition of Clay & Partners.

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ALEXANDER & ALEXANDER SERVICES INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1993
INDEX TO EXHIBITS

Certain exhibits to this Report on Form 10-K have been incorporated by
reference. For a list of these Exhibits see Item 14 hereof. The following
exhibits are being filed herewith:

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EXHIBIT PAGE NO.
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3.3 Articles Supplementary of Alexander & Alexander Services Inc., dated December 3, 1993........
3.4 Amended and Restated Bylaws of The Company, dated as of January 14, 1994.....................
10.3 1993 Optionplan of Alexander & Alexander B.V. under Alexander & Alexander's 1988 Long Term
Incentive Compensation Plan..................................................................
10.20 Retirement Agreement between Ronald W. Forrest and the Company, dated November 18, 1993......
10.23 Transition Employment, Retirement and Consulting Agreement between Tinsley H. Irvin and
Alexander & Alexander Services Inc., dated March 16, 1994....................................
10.24 Employment Agreement among Lawrence E. Burk, Alexander & Alexander Inc. and Alexander &
Alexander Services Inc., dated October 25, 1993..............................................
10.25 Agreement relating to the Company's indemnification in connection with the sale of Shand
Morahan & Co. by the Company: (i) Stock Purchase Agreement, dated as of October 7, 1987 by
and between F-M Acquisition Corporation and Alexander & Alexander Inc. (including certain
exhibits thereto); (ii) Amendment No. 1 to the Stock Purchase Agreement, dated as of
February 15, 1989 between F-M Acquisition Corporation and Alexander & Alexander Inc.; (iii)
Waiver and Consent, dated December 18, 1990, by Alexander & Alexander Inc. to a merger of
F-M Acquisition Corporation with Shand/Evanston Group, Inc.; (iv) Confirmation and
Assumption Agreement, dated as of December 18, 1990, by Shand/Evanston Group for the
benefit of Alexander & Alexander Inc.; and (v) Letter Agreement, dated December 18, 1990
among Alexander & Alexander Inc., F-M Acquisition Corporation, Shand/Evanston Group, Inc.
and Markel Corporation.....................................................................
10.26 Agreement relating to the Company's indemnification in connection with the sale of Sphere
Drake Insurance Group plc: Share Purchase Agreement between Sphere Drake Acquisitions
(U.K.) Limited and Alexander Stenhouse & Partners Ltd., dated as of October 8, 1987,
including all exhibits and schedules thereto...............................................
13.0 1993 Annual Report to Stockholders...........................................................
21.0 Subsidiaries of the Registrant...............................................................
23.0 Independent Auditors' Consent................................................................

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-K’ Filing	Date	First	Last	Other Filings

	1/1/01	4
	4/1/94	10
Filed on:	3/31/94	15		10-Q, DEF 14A
	3/17/94	1
	3/16/94	8	22
	3/14/94	7
	2/25/94	14	17	8-K
	2/16/94	7
	1/17/94	14
	1/14/94	11	22
	1/1/94	9
For Period End:	12/31/93	1	22	11-K
	12/15/93	14
	12/3/93	11	22
	11/30/93	4
	11/18/93	13	22
	11/4/93	7
	10/25/93	13	22
	9/28/93	7
	7/1/93	4
	3/26/93	12
	3/18/93	11	13
	12/31/92	2	21
	4/23/92	12
	3/12/92	13
	3/11/92	13
				List all Filings

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Alexander & Alexander Services Inc – ‘10-K’ for 12/31/93

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Annual Report — Form 10-KFiling Table of Contents

10-K — Alexander & AlexanderDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Annual Report — Form 10-K
Filing Table of Contents

10-K — Alexander & Alexander
Document Table of Contents