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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

[ ] 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: 1-11794

E. W. BLANCH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 41-1741779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

500 NORTH AKARD, SUITE 4500, DALLAS, TEXAS 75201
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (214) 756-7000

NONE
(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 shares of the Registrant's common stock outstanding as of April
20, 2001 was 13,070,184.

Part 1. Financial Information
Item 1. Financial Statements

E. W. Blanch Holdings, Inc.

Consolidated Statements of Income
(in thousands, except per share amounts)

Unaudited

THREE MONTHS ENDED
MARCH 31,
--------------------
2001 2000
--------------------
Revenues:
Operations $ 44,343 $ 51,488
Interest income 2,968 3,172
Other income 40 2,255
--------------------
Total revenues 47,351 56,915

Expenses:
Salaries and benefits 25,555 32,549
Travel and marketing 1,965 4,670
General and administrative 13,438 13,689
Amortization of intangibles 1,328 1,440
Interest expense 1,359 1,432
--------------------
Total expenses 43,645 53,780
--------------------

Income before taxes 3,706 3,135

Income taxes 1,574 1,300
--------------------
Net income before minority interest and
equity in (gain) loss of unconsolidated
subsidiaries, net of tax 2,132 1,835

Minority interest, net of tax 3 (45)
Equity interest in (gain) loss of unconsolidated
subsidiaries, net of tax 380 (280)
--------------------
Net income $ 1,749 $ 2,160
====================

Earnings per share - basic $ 0.14 $ 0.16
Earnings per share - assuming dilution $ 0.13 $ 0.16

Cash dividends declared per share $ 0.14 $ 0.14

SEE ACCOMPANYING NOTES.

E. W. Blanch Holdings, Inc.
Consolidated Balance Sheets
(in thousands)

MARCH 31, DECEMBER 31,
2001 2000
---------------------------
(Unaudited)

ASSETS:
Cash and cash equivalents $ 17,688 $ 8,642
Due from fiduciary accounts (net of allowance for
doubtful accounts of $9,199 in 2001 and $9,781 in 2000) 22,651 27,106
Prepaid insurance 939 1,610
Investments, trading portfolio 5,848 5,903
Other current assets 20,581 27,283
---------------------------
Total current assets 67,707 70,544

Long-term investments 21,042 20,995
Investments in unconsolidated subsidiaries 14,834 14,962
Property and equipment, net 36,632 39,521
Intangibles, net 64,600 67,271
Other assets 13,782 15,950
Fiduciary accounts--assets 1,083,861 1,023,329
---------------------------
Total assets $ 1,302,458 $ 1,252,572
===========================

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Current liabilities:
Accrued compensation $ 6,603 $ 11,575
Notes payable to banks under lines of credit 55,500 60,600
Accounts payable 6,760 7,047
Accrued severance and contract terminations 3,923 5,525
Current portion of long-term liabilities 597 781
Other current liabilities 7,339 6,224
---------------------------
Total current liabilities 80,722 91,752

Long-term debt, less current portion 1,034 1,072
Other liabilities, less current portion 4,713 4,729
Commitments and contingencies -- --
Fiduciary accounts--liabilities 1,083,861 1,023,329
---------------------------
Total liabilities 1,170,330 1,120,882

MINORITY INTEREST: 409 401

SHAREHOLDERS' EQUITY:
Common stock - par value $0.01 per share (authorized
60,000,000 shares; issued and outstanding: 14,141,671
shares in 2001 and 2000) 141 141
Additional paid-in capital 69,486 70,179
Treasury stock (1,096,237 shares in 2001 and 1,169,168
shares in 2000) (26,514) (28,809)
Accumulated other comprehensive loss (6,490) (5,381)
Retained earnings 95,096 95,159
---------------------------
Total shareholders' equity 131,719 131,289
---------------------------
Total liabilities, minority interest and shareholders' equity $ 1,302,458 $ 1,252,572
===========================

SEE ACCOMPANYING NOTES.

E. W. Blanch Holdings, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Unaudited

THREE MONTHS ENDED
MARCH 31,
---------------------
2001 2000
---------------------

OPERATING ACTIVITIES:
Net income $ 1,749 $ 2,160
Adjustments to reconcile net income to net cash provided by
operating activities:
(Gain) loss on investments 333 (1,957)
Depreciation and amortization 4,407 3,940
Deferred income tax provision 295 930
Undistributed (earnings) losses of unconsolidated
subsidiaries 380 (280)
Non-cash compensation expense 907 1,096
Changes in operating assets and liabilities:
Due from fiduciary accounts 6,637 (1,794)
Other current assets 7,302 2,137
Accrued compensation (4,972) (3,296)
Accounts payable and other current liabilities 815 (829)
Accrued severance and contract terminations (1,601) --
Purchases of trading portfolio investments (1,598) (1,673)
Sales of trading portfolio investments 1,422 1,482
Effect of exchange rate changes, net (1,249) (57)
Other operating activities, net 1,351 (1,665)
---------------------
Net cash provided by operating activities 16,178 194

INVESTING ACTIVITIES:
Purchases of long-term investments (470) (220)
Proceeds from long-term investments 47 4,875
Purchases of property and equipment, net (744) (4,276)
Acquisition of consolidated and unconsolidated subsidiaries,
net of cash acquired (253) --
Other investing activities, net 496 406
---------------------
Net cash provided by (used in) investing activities (924) 785

FINANCING ACTIVITIES:
Dividends paid (1,812) (1,840)
Proceeds from issuance of treasury shares related to
employee stock plans 696 2,753
Purchases of treasury stock -- (2,440)
Net repayments on lines of credit (5,100) (6,803)
Net payments on long-term debt (210) (247)
Other financing activities, net 218 76
---------------------
Net cash used in financing activities (6,208) (8,501)
---------------------

Net increase (decrease) in cash and cash equivalents 9,046 (7,522)
Cash and cash equivalents at beginning of period 8,642 20,819
---------------------
Cash and cash equivalents at end of period $ 17,688 $ 13,297
=====================

SEE ACCOMPANYING NOTES.

E. W. Blanch Holdings, Inc.

Notes to Consolidated Financial Statements
March 31, 2001

1. ORGANIZATION AND BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and in accordance with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the interim periods are
not necessarily indicative of the results for the full year. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report to shareholders for the year
ended December 31, 2000.

E.W. Blanch Holdings, Inc. and its subsidiaries ("the Company") and its
predecessor organizations have been in operation since 1957. The Company is a
leading provider of risk management and distribution services including
reinsurance intermediation and technical, analytical, and financial consulting
services. These services are sold both on bundled and component bases. The
consolidated financial statements include the accounts of the Company and its
wholly and majority owned subsidiaries.

Certain prior year amounts have been reclassified to conform with current year
presentation.

2. ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and
operations of the Company and its wholly and majority owned subsidiaries. All
material intercompany accounts and transactions have been eliminated.

Foreign Currency Translation

The Company's primary functional currency is the U.S. dollar. The functional
currency of the Company's foreign operations is the currency of the primary
economic environment in which the subsidiary operates. The Company translates
income and expense accounts at the average rate in effect for the period.
Balance sheet accounts are translated at the period end exchange rate.
Adjustments resulting from the balance sheet translation are reflected in
Shareholders' Equity. The cumulative translation adjustment at March 31, 2001,
is an unrealized $6,414,000 loss as compared to an unrealized loss of $5,165,000
at December 31, 2000. The change in the cumulative translation adjustment is
primarily due to the decline in the exchange rate for the British Pound Sterling
in 2001.

3. NEW ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which was
required to be adopted in years beginning after June 15, 1999. In June 1999, the
FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement

No. 133," which modified the required adoption date of SFAS No. 133 to years
beginning after June 15, 2000. The Statement permits early adoption as of the
beginning of any fiscal quarter after its issuance. In June 2000, the FASB
issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities" as an amendment to SFAS No. 133. These Statements require
the Company to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change in fair
value of the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings.

Management has completed the adoption of SFAS No. 133, 137 and 138. The Company
is occasionally a party to free-standing derivatives, primarily foreign currency
contracts entered into to hedge foreign brokerage revenues. All such contracts
entered into will be recorded on the balance sheet at fair value and marked to
market throughout the term of the contract with the change in fair value
immediately recognized in earnings. No such forward currency contract exists as
of March 31, 2001. The effect of adopting SFAS No. 133, 137 and 138 had no
effect on the operating results or the financial position of the Company.

4. EARNINGS PER SHARE

The following table sets forth basic and diluted weighted average shares
outstanding for the period ended March 31 (in thousands):

THREE MONTHS ENDED
MARCH 31,
-------------------------
2001 2000
-------------------------
Weighted average shares - basic 12,953 13,184
Effect of dilutive securities 140 631
-------------------------
Weighted average shares- assuming dilution 13,093 13,815
=========================

5. BUSINESS SEGMENT INFORMATION

The following is additional business segment information for the three months
ended March 31 (in thousands):

Profit (loss), net of tax 2001 2000
- -------------------------------------------------------------------------
Domestic operations $2,281 $2,459
Foreign operations (532) (299)
---------------------------------
Consolidated $1,749 $2,160
=================================

REVENUES 2001 2000
- -------------------------------------------------------------------------
Domestic operations $31,592 $37,640
Foreign operations 15,759 19,275
---------------------------------
Consolidated $47,351 $56,915
=================================

6. COMPREHENSIVE INCOME (LOSS)

During the three months ended March 31, 2001 and 2000, total other comprehensive
income (loss) amounted to ($1,109,000) and ($1,184,000), respectively. Total
comprehensive income for the three months ended March 31, 2001 and 2000 amounted
to $640,000 and $976,000, respectively.

7. RESTRUCTURING CHARGE

During the fourth quarter of 2000, the Company recorded a $9.5 million
restructuring charge related to its expense realignment program. Under the
program, management identified and divested non-performing or non-core assets
and significantly lowered anticipated future operating costs and corporate
overhead. The restructuring charge was made up of $4.5 million in
employee-related charges, $4.6 million in occupancy/lease related charges, and
$0.4 million in asset impairment charges. This charge was shown as a separate
pre-tax expense item in the Consolidated Statements of Operations in 2000.

The employee-related charge represented severance and related benefits such as
outplacement counseling, vacation and medical coverage to be paid to terminated
employees. The charge related to the anticipated termination of approximately
114 employees at all levels throughout the Company. As of March 31, 2001,
approximately 96 employees had been terminated under this program.

The restructuring plan identified offices to be closed in the following cities
around the globe: Hoboken, Kansas City, Chicago, Singapore, Hong Kong, Labuan,
Beijing, Shanghai, Hanoi, Ho Chi Minh, New Castle, Brisbane, Adelaide and
Melbourne. As of March 31, 2001, all of these offices have been closed except
for Hanoi which the Company plans to close by June 30, 2001. The occupancy/lease
related charge included the cost of future contractual lease commitments related
to the office space which will no longer be occupied by the Company.
Additionally, the occupancy/lease related charge included the costs paid prior
to December 31, 2000 to terminate an existing lease obligation. The amounts
payable under the existing leases were not discounted, and anticipated sublease
income was included in the calculation. The charge also included write-offs of
fixed assets and leasehold improvements calculated by location. The asset
impairment charge represented the amount written off in relation to an impaired
asset. All actions to be taken under this plan are expected to be completed in
2001.

The following presents a rollforward of activity related to the restructuring
charge:

4th Qtr 2000
Pre-tax 2000 Reserve at 2001 Reserve at
(In millions) Charge Payments December 31, 2000 Payments March 31, 2001
- --------------------------------------------------------------------------------------------------

Employee-related $4.5 $0.2 $4.3 $1.5 $2.8
Occupancy/lease
related 4.6 3.4 1.2 0.1 1.1
Asset impairment 0.4 n/a n/a n/a n/a
--------------------------------------------------------------------------------

Total $9.5 $5.5 $3.9

8. SUBSEQUENT EVENT

On April 16, 2001, the Company and Benfield Greig Group plc ("Benfield"), the
leading U.K. based independent reinsurance intermediary, announced that they had
entered into a merger agreement. The boards of directors of both companies
approved the transaction. On April 30, 2001, a wholly owned subsidiary of
Benfield commenced a tender offer for all of the outstanding shares of the
Company at the purchase price of $13.50 per share in cash. The tender offer is
scheduled to expire on May 25, 2001 unless extended. Following the completion of
the tender offer, Benfield will acquire any remaining publicly held shares of
the Company at the offer price of $13.50 per share through a merger. Upon
completion of the transaction, which is still subject to financing, certain
regulatory approvals and other customary conditions, the combined group's U.S.
operations will be renamed Benfield Blanch.

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations

FORWARD-LOOKING STATEMENTS

Statements other than historical information contained herein are considered
forward-looking and involve a number of risks and uncertainties. Forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. There are certain important factors
that could cause results to differ materially from those anticipated by some of
the statements made herein. Some of the factors that could cause actual results
to differ materially are the following: world-wide and national economic
conditions; market dynamics within the world-wide and national insurance and
reinsurance markets; interest rate changes; regulatory changes; competition;
ability to effectively and efficiently integrate operations; timing and
completion of non-recurring transactions; inability to collect receivables; loss
of key personnel; refinancing risk of credit facility; the possibility that the
anticipated merger with Benfield may not close, or may not close within the time
period currently contemplated; and legal proceedings. See Part II, Item 1. Legal
Proceedings, below. Additional information concerning risk factors are contained
in the Company's Securities and Exchange Commission filings, including but not
limited to the most recent Form 10-K, copies of which are available from the
Company without charge.

EUROPEAN MONETARY UNIT

The Company completed its analysis of the new European Monetary Unit ("EMU") and
its effects on the Company's business processes and IT system requirements in
the second quarter of 1999. The Company's core back office processing and
financial systems are currently capable of handling multiple currencies and will
therefore be able to handle the EMU as another currency. However, the Company
did identify several minor system modifications to accommodate decimalization
and rounding issues, currency conversions, and the new reporting requirements of
the EMU. The modifications in the business processing systems have been
completed. Required modifications to the general ledger system are currently
being evaluated by the Company's management. The costs associated with upgrading
the IT systems and the impact on business processes were immaterial to the
Company's results of operations, liquidity and financial condition. The
Company's management anticipates that the cost to modify the general ledger
system will also be immaterial to the Company's results of operations, liquidity
and financial condition.

LITIGATION RISKS

The Company is party to various lawsuits, as described in Part II, Item 1. Legal
Proceedings, below. The Company also could be adversely impacted by lawsuits and
arbitrations to which it is not a party, as described in the Unicover Litigation
and Workers' Compensation Reinsurance Issues discussion below. These lawsuits
and arbitrations, depending on their outcome, could have a material impact on
the Company.

UNICOVER LITIGATION AND WORKERS' COMPENSATION REINSURANCE ISSUES

The workers' compensation reinsurance industry was impacted in 1999 by certain
events principally surrounding an entity called Unicover Managers, Inc.
("Unicover"). Unicover served as a managing general underwriter for various
insurance companies that provided reinsurance coverage to the workers'
compensation primary insurance industry. It has been alleged that Unicover, on
behalf of companies it represented, assumed reinsurance exposures at prices and
volume levels that were imprudent for those companies and their
retrocessionaires, and that correspondingly were advantageous to the customers
who procured reinsurance coverage through Unicover. Various clients of the
Company, employing the Company's reinsurance intermediary services, procured

workers' compensation reinsurance coverage through Unicover in late 1998 and
early 1999.

One client that the Company assisted in procuring reinsurance through Unicover
was the "AIG" group of insurance companies. A lawsuit was commenced in 1999
relating to that reinsurance program. The Company is the third-party defendant
and cross-claimant in that litigation, which is described in more detail in Part
II, Item 1. Legal Proceedings. In the third quarter of 2000, the Company
established a reserve against the amount of reinsurance brokerage it has
recognized as revenue in prior years for these AIG placements, because of an
adverse court ruling against AIG in that lawsuit.

The Company also assisted various other clients in procuring workers'
compensation reinsurance coverage with Reliance Insurance Company ("Reliance")
through Unicover. In 1999, Reliance engaged in negotiations with those clients
of the Company to settle Reliance's reinsurance obligations to those clients of
the Company. In January 2000, Reliance announced that those settlement
negotiations had been successfully concluded. Also in January 2000, Reliance and
the Company reached an agreement concerning the Company's brokerage revenue
associated with these settled reinsurance placements. As a result of this
agreement, the Company did not experience any material adverse impact with
respect to revenues the Company has previously recognized for these placements.

The Company also assisted another client company, EBI Companies ("EBI"), in
procuring workers' compensation reinsurance coverage through Unicover. The
Company has been advised that the reinsurance companies represented by Unicover
settled their obligations to EBI in January 2000. The Company has reached an
agreement with EBI concerning the brokerage revenues the Company is to receive
for these reinsurance placements. Pursuant to this agreement, the Company has
received an amount less than the amount the Company recognized as revenue in
prior years. The Company established a reserve in the third quarter of 2000 for
the difference between what it has received under this agreement and what has
been previously recognized.

The total reserves recorded in the third quarter 2000, related to the AIG and
EBI matters described above, of approximately $3.2 million were included in
general and administrative expense.

The Company also assisted a client, Superior National Insurance Group ("SNIG"),
in procuring workers' compensation reinsurance coverage. This coverage was
procured through a competitor of Unicover, Web Management LLC ("WEB"), which
represented a reinsurer named United States Life Insurance Co. of the City of
New York ("U.S. Life"). The Company is advised that U.S. Life in late 1999
commenced an arbitration proceeding against SNIG, which in March of 2000 was
placed into conservatorship by the California Department of Insurance. The
Company is advised that U.S. Life alleges, possibly among other things, that
this reinsurance program should be rescinded for alleged nondisclosure of
material information. The Company is not a party to this arbitration proceeding.
However, it is possible that in the event U.S. Life is successful in that
proceeding, the Company may be required to return reinsurance brokerage
previously received and recognized. If the Company were required to return all
of its previously recognized and received brokerage for this program, the amount
would have a material adverse impact on the Company's financial position and
results of operations. However, based on currently available information, the
Company does not believe that this is likely to occur. The Company is advised
that various lawsuits are pending relating to SNIG and involving reinsurance
placements for which the Company served as reinsurance intermediary. The Company
is not a party to any of these lawsuits.

2000 RESTRUCTURING

corporate overhead. The restructuring charge was made up of $4.5 million in
employee-related charges, $4.6 million in occupancy/lease related charges, and
$0.4 million in asset impairment charges. This charge was shown as a separate
pre-tax expense item in the Consolidated Statements of Operations in 2000.

All actions to be taken under this plan are expected to be completed in 2001.
Management anticipates that the program will deliver at least $17 million in
total expense reductions, primarily in salaries and benefits expense and lease
expense, with most savings targeted to occur in the last three quarters of 2001.

Of the $9.5 million restructuring charge taken in the fourth quarter of 2000,
$3.9 million of accrued severance and contract terminations liability remains as
of March 31, 2001. The liability has been reduced by payments of $1.7 million
and $3.5 million and write-offs of $0.4 million related to employee-related
expenses, occupancy/lease related expenses and asset impairment expense,
respectively.

GENERAL

The Company is a leading provider of integrated risk management and distribution
services, including reinsurance intermediation and technical, analytical, and
financial consulting services.

The following is a summary of revenues and income (loss) before taxes by
geographic area for the three months ended March 31 (in thousands):

2001 2000
------------------------- -------------------------
Income Income
Revenues before taxes Revenues Before taxes
------------ ------------ ------------ ------------
Domestic operations $31,592 $ 3,942 $37,640 $ 3,223
Foreign operations 15,759 (236) 19,275 (88)
------------ ------------ ----------- ------------
$47,351 $ 3,706 $56,915 $ 3,135
============ ============ =========== ============

FIRST QUARTER 2001 COMPARED WITH FIRST QUARTER 2000

OPERATIONS

The following are the components of revenue from operations for the three months
ended March 31 (in thousands):

2001 2000
------- -------
Domestic operations $29,645 $33,216
Foreign operations 14,698 18,272
------- -------
$44,343 $51,488
======= =======

Domestic operations decreased $3.6 million, or 10.8%, from the prior year
primarily due to the disposal of various subsidiaries in 2000 and revenue not
recognized since the first quarter of 2000 on the HomePlus contract which is in
litigation. See Part II, Item 1. Legal Proceedings for information on this
litigation.

Foreign operations decreased $3.6 million or 19.6% from the prior year,
primarily as a result of the effect of the closure/sale of Australasian
offices in the first quarter of 2001 and the timing of revenue recognition by
the Company's Argentinean operations in the first quarter of 2000.

INTEREST INCOME

The following are the components of interest income for the three months ended
March 31 (in thousands):

2001 2000
------- -------
Domestic operations $ 1,947 $ 2,169
Foreign operations 1,021 1,003
------- -------
$ 2,968 $ 3,172
======= =======

Interest income is $3.0 million for the three months ended March 31, 2001
compared to $3.2 million the prior year, a decrease of $0.2 million or 6.4%.
This decrease is primarily due to non-accrual of dividends in 2001 related to a
strategic investment.

OTHER INCOME

The following are the components of revenue from other income for the three
months ended March 31 (in thousands):

2001 2000
------- -------
Domestic operations $ 0 $ 2,255
Foreign operations 40 0
------- -------
$ 40 $ 2,255
======= =======

Domestic operations decreased $2.3 million for the three months ended March 31,
2001 as compared to the prior year. The first quarter 2000 results included a
$1.9 million gain from the sale of a long-term investment.

EXPENSES

Domestic operating expenses, including allocation of central costs, decreased
$6.8 million to $27.1 million, or 20.0%, for the three months ended March 31,
2001 compared to $33.9 million the prior year.

Foreign operating expenses, including allocation of central costs, decreased
$3.3 million to $16.6 million, or 16.9% for the three months ended March 31,
2001 compared to $19.9 million the prior year.

The decrease in operating expenses is primarily due to the implementation of the
fourth quarter 2000 restructuring plan and the disposal of various subsidiaries
in 2000.

PROFIT MARGINS

Operating profit margins, calculated as income before taxes and allocation of
central costs as a percentage of total revenues, were 12.5% for domestic
operations for the three months ended March 31, 2001, compared to 8.6% for the
same period in the prior year.

Operating profit margins, calculated as income before taxes and allocation of
central costs as a percentage of total revenues, were (1.5)% for foreign
operations for the three months ended March 31, 2001, compared to (0.5)% for the
same period in the prior year.

INCOME TAXES

The Company's combined federal and state effective tax rate was 42.5% for the
three months ended March 31, 2001 as compared to 41.5% for the same period the
prior year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's sources of funds consist primarily of brokerage commissions and
fees and interest income. Funds are applied generally to the payment of
operating expenses, the purchase of equipment used in the ordinary course of
business, the repayment of outstanding indebtedness, and the distribution of
earnings. The Company's cash and cash equivalents were $17.7 million at March
31, 2001.

The Company generated $16.2 million of cash from operations during the first
three months of 2001 compared with $0.2 million for the same period in 2000. The
increase in operating cash flow in 2001 is primarily due to the timing of
changes in various operating assets and liabilities.

Cash flow used in investing activities was $0.9 million for the three months
ended March 31, 2001. The Company used $0.7 million of cash for the purchase of
property and equipment, $0.5 million for the purchase of long-term investments
and $0.3 million additional consideration for the acquisition in 2000 of a
controlling interest in MSTC Blanch S.A.

Cash flow used in financing activities was $6.2 million for the three months
ended March 31, 2001. The primary uses of cash for financing activities were
$5.1 million for the repayment on lines of credit, $1.8 million of dividends
paid to shareholders and $0.2 million for payments on long-term debt. The
primary source of cash from financing activities were proceeds of $0.7 million
from the issuance of treasury shares to fund employee benefit plans.

The Company's long-term investment portfolio at March 31, 2001 was $21.0
million, comprised of equity and debt instruments. The market value of the
Company's investment portfolio at March 31, 2001, was $0.5 million below cost.
The Company's investment in unconsolidated subsidiaries at March 31, 2001 was
$14.8 million. The Company's trading portfolio at March 31, 2001 was $5.8
million, which is comprised of debt investments. The market value of the
Company's trading portfolio at March 31, 2001 was $0.2 million above cost. Cash,
investments and the Company's line of credit are available and managed for the
payment of its operating and capital expenditures. The Company is not subject to
any significant regulatory capital requirements in connection with its business.

On January 29, 2001, the Board of Directors declared a regular quarterly cash
dividend of $0.14 per share, payable March 1, 2001 to shareholders of record as
of February 8, 2001. Historically, the Board of Directors reviewed and declared
dividends on a quarterly basis. The Company paid a quarterly dividend of $0.12
per share in the first three quarters of 1999. In October 1999, the Board of
Directors increased the quarterly dividend to $0.14 per share. The Company paid
quarterly dividends of $0.14 per share in the fourth quarter of 1999, all four
quarters in 2000 and in the first quarter of 2001. In accordance with the credit
facility, quarterly dividends are currently limited to $0.07 per share, subject
to reduction of the borrowings under the credit facility to at least $40
million. The Company's Board of Directors has determined that no dividend will
be declared in the second quarter of 2001.

The Company has an unsecured revolving credit facility that is used to fund
general corporate requirements. As of December 31, 2000, this was a $100 million
facility carrying market rates of interest, which varied depending upon the
Company's commitment level. Commitment fees of 0.200% to 0.375% were payable on
any unused portion. The facility contained several financial covenants and
restrictions related to acquisitions, payment of dividends and sales of assets.
Covenants contained in the agreement as of December 31, 2000 required the
Company to exceed minimum levels of net worth and meet a fixed charge ratio. The
Company was not in compliance with all of its covenants governing its
indebtedness as of December 31, 2000. However, a waiver was obtained on the
non-compliance in conjunction with the February 20, 2001 amendment to this
credit facility. Effective February 20, 2001, the credit facility was amended to
a $62.5 million unsecured revolving credit facility. The facility, which expires
on November 3, 2001, carries market rates of interest, which varies depending
upon the Company's commitment level. Commitment fees of 0.375% to 0.500% are
payable on any unused portion. The facility contains financial covenants for
Adjusted EBITDA and Minimum Net Worth. The agreement also contains scheduled
commitment reductions, maximum levels of capital expenditures and certain
limitations on quarterly dividend payments. The scheduled commitment reductions
are as follows: $2.5 million on March 31, 2001; $5.0 million on June 30, 2001;
$5.0 million on September 30, 2001; and on September 30, 2001, the greater of
$10 million or the amount of Asset Sale Proceeds, as defined, collected by the
Company during the period from February 20, 2001 through and including September
30, 2001. Quarterly dividends are limited to $0.07 per share, subject to
reduction of the facility to at least $40 million. The Company is currently in
compliance with all terms and covenants governing its indebtedness. The Company
had a $55.5 million balance outstanding under this facility as of March 31, 2001
with an average rate of interest during the first quarter of 2001 of 7.7%. If
the merger with Benfield occurs, it is Benfield's intention that this facility
will be refinanced. Benfield obtained a $390 million debt facility in April 2001
through Barclays Capital for the purposes of financing the acquisition of the
Company, refinancing existing indebtedness of both Benfield and the Company, and
to provide working capital for the enlarged merged group going forward.

The Company also has a foreign credit facility. During the first quarter of
2001, the Company's (pound)4.0 million secured overdraft facility was amended to
a (pound)2.0 million secured overdraft facility, which would have translated to
$2.8 million at March 31, 2001. As of March 31, 2001, the Company had no
outstanding balance under this facility and the interest rate was 1.0% above the

Hong Kong and Shanghai Banking Corporation ("HSBC") base rate. This overdraft
facility is available for general corporate funding requirements. The Company's
HK$7.1 million and HK$5.0 million overdraft facilities with HSBC, which were
repaid in 2000, are no longer needed by the Company and have expired.

The Board of Directors of the Company authorized a stock repurchase program on
April 17, 2000 to purchase up to 20% of the Company's then outstanding common
stock. The purchases may be made from time-to-time at prevailing prices in the
open market, by block purchases or in private transactions for a two-year
period, subject to possible renewal at the end of that period. The shares
repurchased will be available for reissuance to satisfy employee stock plans and
for other corporate purposes. In the second quarter of 2000, the Company
repurchased 522,000 shares of common stock. No additional repurchases have been
made since the second quarter of 2000. The Company does not anticipate buying
any additional shares and such purchases are subject to terms of the credit
facility.

The Company anticipates that its cash and investments, combined with its
borrowing facilities and internally generated funds, will be sufficient to meet
its present and reasonably foreseeable long-term capital needs, subject to
successful renegotiation or replacement of the Company's bank line of credit
that is currently scheduled to expire on November 3, 2001.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in market risk for the Company during the first
three months of 2001.

Part II. Other Information

Item 1. Legal Proceedings

The various lawsuits to which the Company is a party are routine in nature and
incidental to the Company's business, with the following exceptions:

(1) E.W. Blanch Co. ("Blanch"), a subsidiary of the Company, is a third-party
defendant in a lawsuit venued in the Supreme Court of the State of New York,
County of New York. This lawsuit was instituted on February 16, 1999, and Blanch
was added as a third-party defendant on March 23, 1999. Plaintiffs are AIU
Insurance Company and various other insurance companies, all of whom are part of
the "AIG" group of companies. Defendants are Unicover Managers, Inc.
("Unicover") and ReliaStar Life Insurance Company ("ReliaStar"). Blanch was
joined in the lawsuit as a third-party defendant by ReliaStar.

In this lawsuit, AIG as plaintiff alleges that ReliaStar, through its agent
Unicover, agreed to provide certain reinsurance protection to AIG, relating to
workers' compensation insurance policies issued by the plaintiff AIG companies
in California and elsewhere in the United States. Defendants assert that the
reinsurance coverages in issue never were bound, and defendant ReliaStar further
asserts that if defendant Unicover in fact did bind those coverages, it acted
beyond the authority granted by ReliaStar.

In ReliaStar's third-party complaint against Blanch, ReliaStar alleges that
Blanch, as AIG's reinsurance broker on the reinsurance placements in issue, knew
or should have known that the reinsurance coverages were not bound and knew or
should have known that Unicover did not have the authority to bind ReliaStar to
those coverages.

The relief being sought by AIG in its complaint against ReliaStar and Unicover
is that defendants be required to honor the reinsurance commitments that AIG
alleges were made, and be required to pay an unspecified amount of money damages
for alleged breach of those reinsurance commitments and (with respect to
Unicover) for negligent misrepresentation.

The relief being sought by ReliaStar in its third-party complaint against Blanch
is that, in the event ReliaStar is found to be liable to AIG, Blanch be required
to indemnify and hold ReliaStar harmless for that liability, or in the
alternative, Blanch be required to make a contribution for a portion of that
liability in an amount to be determined by the Court.

Blanch, in turn, has filed a counterclaim against ReliaStar and Unicover. The
counterclaim alleges that ReliaStar and Unicover, in fact, did bind the
reinsurance coverages in issue, and therefore, they owe Blanch the reinsurance
brokerage to which Blanch is entitled under those reinsurance contracts.
Alternatively, if it is determined that Unicover misrepresented its authority to
bind ReliaStar, Blanch should be awarded money damages resulting from its
reliance on those misrepresentations.

Discovery has been completed in this lawsuit. In an Order filed on July 19,
2000, the trial court granted ReliaStar's motion for summary judgement against
AIG. As part of that Order, the trial

court dismissed ReliaStar's third-party complaint against Blanch as moot. The
trial court did not rule on Blanch's counterclaims against ReliaStar and
Unicover, but the effect of the ruling was to dismiss Blanch's counterclaims.
Both AIG and Blanch appealed this ruling. On April 10, 2001, the appellate court
affirmed the ruling of the trial court. The Company has established a reserve
for revenues recognized for these AIG reinsurance placements in prior years.

(2) The Company is a defendant and counterclaimant in a lawsuit venued in the
United States District Court for the District of Minnesota.
Plaintiffs/Counterdefendants are HomePlus Insurance Agency, Inc. and Securian
Financial Group, Inc. This lawsuit was instituted on May 1, 2000. Plaintiffs
allege that the Company is in breach of contract, with respect to an agreement
whereby the Company was to provide plaintiff with certain software products and
services, and certain other related services. The lawsuit asserts that as a
result of the Company's alleged breach of contract and breach of warranty,
plaintiffs have suffered damages in an amount to be proven at trial, which would
include, but not be limited to, $1.5 million allegedly paid by plaintiffs to the
Company to date. The Company has counterclaimed, asserting that the Company is
not in material breach under the contract in issue, and seeking damages for the
counterdefendants' failure and refusal to honor the agreement. Those damages
would include, but not be limited to, the account receivable currently on the
Company's books for this transaction, which is $4.1 million. This lawsuit is in
the pre-trial, discovery stage. The Company intends vigorously to defend the
claims against it and vigorously to pursue its counterclaims.

(3) On March 20, 2000, the Company was sued in Dallas, Texas County Court, by
Rodman Fox, a director and executive officer of the Company who resigned the
same day. The lawsuit seeks a declaration that the restrictive covenants in his
employment agreement are unenforceable. The Company has counterclaimed against
Mr. Fox and filed third-party claims against Paul Karon, Benfield Greig Group
plc, and various related Benfield Greig entities. Paul Karon was an executive
vice president of E.W. Blanch Co., who resigned with Mr. Fox on March 20, 2000.
Benfield Greig is the current employer of Mr. Fox and Mr. Karon. The Company's
counterclaim and third-party claims are based principally on alleged breach of
fiduciary duty, misappropriation of confidential information, and violation of
restrictive covenants. The trial court in an Order dated June 13, 2000, granted
the Company's motion for a temporary injunction, restraining Fox and Karon from
soliciting or assisting in the solicitation of Company employees, and
restraining Fox, Karon and Benfield Greig from disseminating trade secrets or
confidential information of the Company. The trial court denied the Company's
motion with respect to enforcement of the other restrictive covenants in Fox and
Karon's employment contract, finding them to be unenforceable, and also denied
the motion with respect to breach of fiduciary duty. The Company has appealed
the June 13, 2000 Order to the extent it denies the Company's temporary
injunction request. This lawsuit has been stayed in light of the anticipated
merger with Benfield. If the merger occurs, the lawsuit will be dismissed.

(4) In a Complaint dated February 12, 2001, Andrew Baur as plaintiff, on behalf
of himself and others similarly situated, filed a shareholder derivative in the
United States District Court for the District of Minnesota, against the Company,
E. W. Blanch Co., Inc., Edgar W. Blanch, Jr., Chris L. Walker, Frank S.
Wilkinson, Jr. (a retired officer and director), and Ian D. Packer (former CFO).
The Complaint alleges that the defendants made certain false and misleading
statements to the investing public during the October 19, 1999 through March 20,
2000 time period, and that the individual defendants profited from these
statements by engaging in certain insider trading activities during that time
period. The Complaint alleges that the Company's stock traded at artificially

inflated prices during that time period, and seeks recovery on behalf of class
members for resulting damages. This Complaint has been followed by the filing of
another shareholder derivative lawsuit dated March 13, 2001, by William
Hauenstein as plaintiff, also in the United States District Court for the
District of Minnesota. This Complaint is identical to the Baur Complaint, except
that it expands the class period to February 25, 1999 through March 20, 2000.
The Company and the other defendants have not yet responded to these Complaints.
The Company intends to vigorously defend the allegations of the Complaint in
these lawsuits.

The Company is engaged in other legal proceedings in the ordinary course of
business, none of which are likely to have a material adverse effect on the
consolidated financial position of the Company or the results of its operations,
in the opinion of management.

Item 2. Changes in Securities and Use of Proceeds.

(a.) Not applicable.
(b.) Restrictions on the use of Asset Sale Proceeds, scheduled line of
credit commitment reductions and amount of quarterly dividends that may
be declared are described in Part I., Item 2., in the Liquidity and
Capital Resources section of this Report. Additional information may be
found in the most recent Form 10-K filed, copies of which are available
from the Company without charge.
(c.) Not applicable.
(d.) Not applicable.

Items 3, 4, and 5 are not applicable and have been omitted.

Item 6. Exhibits and Reports on Form 8-K.

(a.) There are no Exhibits required to be a part of this Report.

(b.) The registrant filed a current report on Form 8-K on February 2, 2001.
The report contained the Company's press release reporting the
appointment of Chris L. Walker, President and Chief Operating Officer,
to the additional posts of Chief Executive Officer and Chairman of the
Board, replacing Edgar W. Blanch, Jr., who was named Chairman Emeritus.

SIGNATURES

Pursuant to the requirements 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.

E. W. BLANCH HOLDINGS, INC.

Dated: May 11, 2001 /s/ Susan B. Wollenberg
------------ --------------------------------
Susan B. Wollenberg
Executive Vice President
and Chief Financial Officer