this year to provide quota share reinsurance to the Merrett underwriting syndicates at Lloyd's, is in danger of losing its only client.

Merrett Holdings Plc is fighting to save its Lloyd's of London syndicates after two recent failed attempts to boost its capital, according to publications in the US and the UK.

Travelers Corporation has withdrawn from a consortium planning to buy a controlling stake in Merrett.

And a reported attempt by Merrett to merge with fellow managing agency A.J.

Archer has been rejected.

Mr. Rory Gorman, assistant vice president of Marsh & McLennan in Bermuda and also head of the accounting team of UCM, said yesterday: "We are well aware of the problems Merrett has had.

"We have worked and will continue to work with Merrett's in relation to these problems but, at the moment, we are weighing up our options.'' UCM, which is capitalised at $70 million, is owned by Marsh & McLennan, J.P.

Morgan and 30 other private institutional investors and corporate entities.

The Merrett syndicates have, from 1993 on, exclusive access to UCM to provide whole account quota share reinsurance on an annual basis with a minimum commitment of five years.

If Merrett's problems prove insurmountable, the group may go into run-off, which would leave UCM with many millions of dollars of capital without any immediate use.

The rules of Lloyd's are believed to preclude the company from using its capital to provide reinsurance for other syndicates.