EXECUTIVE CONSULTING AGREEMENT


         EXECUTIVE CONSULTING AGREEMENT, entered into this 24th day of July,
1996, effective January 2, 1997, between USF&G CORPORATION, a Maryland
corporation (the "Corporation"), and PAUL B. INGREY (the "Consultant").

                               W I T N E S S E T H

         The Corporation and the Consultant have reached an agreement to enter
into a working arrangement whereby the Consultant shall serve as an executive
consultant to the Corporation and its Subsidiaries with respect to reinsurance
and such other matters as requested from time to time by the Chief Executive
Officer ("CEO") or other officers of the Corporation or its Subsidiaries, and as
agreed to from time to time by the Consultant. Accordingly, in consideration of
the mutual covenants and representations contained herein, the parties hereto
agree as follows:

         1.       STATUS AND DUTIES.

                  1.1 STATUS. The Corporation hereby engages the Consultant as
an executive consultant for the period specified in paragraph 3 (the "Consulting
Period"), and the Consultant accepts such arrangement on the terms and
conditions set forth in this Agreement. During the Consulting Period, the
Consultant shall not be treated as an employee of the Corporation for any
purpose.

                  1.2 DUTIES. During the Consulting Period, the Consultant shall
provide to the Corporation executive consultative services exclusively to the
Corporation and its Subsidiaries with respect to reinsurance and other matters
as needed and as agreed to by the Consultant. The foregoing shall not preclude
the Consultant from devoting a reasonable amount of his time to civic and
charitable affairs or to the supervision of his personal investments, nor from
serving on boards of directors of companies other than insurance or insurance
holding companies, and otherwise in accordance with policies which may be
established by the Board of Directors of the Corporation (the "Board") from time
to time, provided such activities do not interfere with the performance of the
Consultant's duties under this Agreement.

         2. COMPENSATION. For services rendered by the Consultant pursuant to
this Agreement, during the Consulting Period, the Consultant shall be
compensated as follows:

                  2.1 The Corporation shall pay the Consultant an annual
consulting fee of One Hundred Thousand Dollars ($100,000), payable in such
installments as shall be convenient for the Corporation but not less frequently
than monthly.

                  2.2 Subject to the discretion of the CEO, additional fees may
be negotiated for special projects.

                  2.3 The Consultant shall be entitled to receive additional
cash compensation under the Stock Appreciation Rights Plan and Agreement entered
into as of the date hereof.

         3. CONSULTING PERIOD; TERMINATION. The Consulting Period shall commence
on January 1, 1997, and shall continue for five (5) years, unless earlier
terminated by (i) either party hereto after not less than six (6) months prior
written notice to the other, (ii) written agreement of the parties, (iii) the
death or disability of the Consultant, or (iv) the Corporation for good cause or
upon violation by the Consultant of the provisions of paragraph 4 of this
Agreement.

         4. NON-COMPETITION; CONFIDENTIALITY. The Consultant and the Corporation
recognize that due to the nature of his employment with a Subsidiary of the
Corporation, his engagements hereunder and the relationship of the Consultant to
the Corporation and its Subsidiaries, the Consultant has access to, and has
acquired, and will acquire, and will assist in developing, confidential and
proprietary information relating to the business and operations of the
Corporation and its Subsidiaries. The Consultant acknowledges that such
information has been and will continue to be of central importance to the
business of the Corporation and its Subsidiaries and that disclosure of such
information or its use by others could cause substantial loss to the Corporation
and its Subsidiaries. The Consultant and the Corporation also recognize that an
important part of the Consultant's duties will be to develop good will for the
Corporation and its Subsidiaries through his personal contact with customers and
others having business relationships with the Corporation and its Subsidiaries
and that there is a danger that this good will, a proprietary asset of the
Corporation and its Subsidiaries, may follow the Consultant if and when his
relationship with the Corporation is terminated. The Consultant acknowledges
that the Corporation and its Subsidiaries in some respects have, and other
respects are developing, a significant international business and that in light
of the Corporation's and such Subsidiaries' business and plans, a worldwide
restriction on certain activities of the Consultant is fair and reasonable to
protect the interests of the Corporation and its Subsidiaries. The Consultant
accordingly agrees as follows:

                  4.1 NON-COMPETITION. On and after the date this Agreement is
entered into, and during the Consulting Period, the Consultant will not,
anywhere in the world, directly or indirectly, either individually or as owner,
partner, agent, director, employee, consultant, broker or otherwise, except for
the account of and on behalf of the Corporation or its Subsidiaries, engage in
any activity which is in any way competitive with the business of the
Corporation or its Subsidiaries, nor will he, in direct or indirect competition
with the Corporation or its Subsidiaries, solicit or otherwise attempt to
establish for himself or any other person, firm or entity, any business
relationships with any person, firm or entity which was, at any time during the
Consulting Period or during any of the Consultant's previous employment with the
Corporation or its Subsidiaries, a customer or reinsurer of the Corporation or
its Subsidiaries. Notwithstanding the foregoing, the Consultant may continue as
a passive investor in Service Insurance Company and as a non-employee director
of E.W. Blanch Co., Inc.

                  4.2 NON-SOLICITATION. On and after the date this Agreement is
entered into, and during the Consulting Period, the Consultant will not, on
behalf of himself or any other person or entity whatsoever, directly or
indirectly, solicit, hire, induce or arrange to hire any person who at the time
of such hire or other action, or within 24 months prior to the time of such hire
or other action, was an employee of the Corporation or its Subsidiaries and was
not involuntarily terminated by the Corporation or its Subsidiaries or otherwise
interfere with the retention of employees that the Corporation or its
Subsidiaries desire to retain as such.

                  4.3 CONFIDENTIALITY. On and after the date this Agreement is
entered into and without time or geographic limitation, the Consultant will keep
confidential any trade secrets or confidential or proprietary information of the
Corporation or its Subsidiaries which are now known to him or which hereafter
may become known to him as a result of his prior employment or continued
association with the Corporation or its Subsidiaries and shall not directly or
indirectly disclose any such information to any person, firm or entity, or use
the same other than in connection with the business of the Corporation or its
Subsidiaries. For the purposes of this Agreement, "trade secrets or confidential
or proprietary information" includes information unique to the Corporation or
any of its Subsidiaries which has a significant business purpose and is not
known or generally available from sources outside the Corporation or any of its
affiliates or typical of industry practice or other information which the
Corporation or its Subsidiaries regards as confidential or proprietary.

                  4.4 CORPORATION'S REMEDIES FOR BREACH. It is recognized that
damages in the event of breach of this paragraph 4 would be difficult, if not
impossible, to ascertain. It is therefore agreed that the Corporation and its
Subsidiaries, in addition to and without limiting any other remedy or right they
may have, shall have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and the Consultant
hereby waives any and all defenses he may have on the grounds of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right shall not preclude any other
rights or remedies at law or in equity which the Corporation and its
Subsidiaries may have.

         5.       MISCELLANEOUS.

                  5.1 BINDING AGREEMENT. This Agreement shall be binding upon
the Consultant and the Corporation as of the date of this Agreement. The rights
and obligations of the Corporation under this Agreement shall inure to the
benefit of, and shall be binding upon, the Corporation and its Subsidiaries and
any successor of the Corporation or its Subsidiaries as defined in the Maryland
General Corporation Law, as now in effect.

                  5.2 SUBSIDIARY DEFINED. For purposes of this Agreement,
"Subsidiary" shall mean any corporation of which the Corporation, directly or
indirectly, owns greater than thirty percent (30%) of the issued and outstanding
voting shares, or any partnership, trust or other entity with respect to which
the Corporation, directly or indirectly, has the power to determine fifty
percent or more of the board of directors thereof or other similar governing
group.

                  5.3 GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Maryland other than the conflicts of law provisions
thereof.

                  5.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the Consultant and the Corporation with respect to the subject
matter hereof and supersedes any and all prior understandings, written or oral.
This Agreement may not be changed, modified, or discharged orally, but only by a
written instrument, signed by the parties. The invalidity or unenforceability of
any provisions hereof shall in no way affect the validity or enforceability of
any other provision, and to the extent that any provision hereof is not
enforceable, the parties to this Agreement agree that that provision shall be
enforced to the maximum extent allowed by law and that this Agreement shall be
deemed to be modified to such extent without any further action by the parties
to this Agreement.

         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written


ATTEST                                 USF&G CORPORATION


                                       By: /s/NORMAN P. BLAKE, JR.
                                       Norman P. Blake, Jr.,
                                       Chief Executive Officer


WITNESS                                CONSULTANT


                                       /s/PAUL B. INGREY
                                       Paul B. Ingrey