<PAGE>

                                                                    EXHIBIT 10.3

                          MUTUAL RISK MANAGEMENT LTD.


                     WARRANT REGISTRATION RIGHTS AGREEMENT
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
1. Definitions...................................................................................       1

    1.1  Other Definitions.......................................................................       3

2. Registration Rights...........................................................................       3

    2.1  Demand Registration.....................................................................       3
    2.2  Piggyback Registration..................................................................       5
    2.3  Obligations of the Company..............................................................       5
    2.4  Furnish Information.....................................................................       7
    2.5  Expenses of Registration................................................................       7
    2.6  Underwriting Requirements...............................................................       8
    2.7  Indemnification.........................................................................       9
    2.8  Termination of Registration Rights......................................................      11
    2.9  "Lock-Up" Agreement.....................................................................      11

3. Miscellaneous.................................................................................      12

    3.1  Amendments; Waivers.....................................................................      12
    3.2  After-Acquired Shares...................................................................      12
    3.3  Successors and Assigns..................................................................      12
    3.4  Rights and Obligations of Transferees...................................................      12
    3.5  Further Assurances......................................................................      13
    3.6  Notices.................................................................................      13
    3.7  Governing Law; Waiver of Jury Trial.....................................................      15
    3.8  Severability; Interpretation............................................................      15
    3.9  Table of Contents; Headings.............................................................      16
    3.10 Entire Agreement........................................................................      16
    3.11 Counterparts............................................................................      16
    3.12 No Third-Party Beneficiaries............................................................      16
</TABLE>

                                      (i)
<PAGE>

                     WARRANT REGISTRATION RIGHTS AGREEMENT

         THIS WARRANT REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
                                                           ---------
as of May 17, 2001, by and among Mutual Risk Management Ltd., a company
organized under the laws of Bermuda (the "Company"), and XL Insurance Ltd
                                          -------
("XL"), First Union Merchant Banking 2001, LLC, High Ridge Capital Partners II,
  --
L.P., Century Capital Partners II, L.P. and Taracay Investors Company (each, a
"Purchaser" and, collectively, the "Purchasers").
 ---------                          ----------

                                    RECITALS

         WHEREAS, the Company and the Purchasers are parties to that certain
securities purchase agreement dated as of May 8, 2001 (the "Securities Purchase
                                                            -------------------
Agreement") pursuant to which the Purchasers and certain other purchasers have
---------
agreed to purchase 9 3/8% convertible exchangeable debentures due 2006 of the
Company (the "MRM Debentures") in an aggregate principal amount of $112,500,000;
              --------------

         WHEREAS, in connection with the purchase of MRM Debentures, the Company
has agreed to issue warrants (the "Warrants") to purchase an aggregate of
                                   --------
2,151,943 shares of Common Stock of the Company (the Common Stock issuable upon
exercise of the Warrants being referred to herein as the "Warrant Shares") to
                                                          --------------
the Purchasers; and

         WHEREAS, in order to induce the Purchasers to enter into the Securities
Purchase Agreement and to purchase the MRM Debentures, the Company and the
Purchasers desire to enter into this Agreement for the purpose, among others, of
establishing certain registration and other rights of the Holders (as defined
below);

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

         1.       Definitions.

                  (a)    "Act" means the Securities Act of 1933, as amended.
                          ---

                  (b)    "Agreement" shall have the meaning set forth in the
                          ---------
Preamble to this Agreement.

                  (c)    "Business Day" shall mean any day that is not a
                          ------------
Saturday, Sunday or a day on which (i) commercial banks in New York City are
authorized or required to close or (ii) the New York Stock Exchange is not open
for trading.
<PAGE>

                                      -2-



                  (d)    "Common Stock" shall mean the common stock or common
                          ------------
shares of the referenced Person.

                  (e)    "Common Stock Equivalents" shall mean securities
                          ------------------------
convertible into or exercisable or exchangeable for Common Stock of the
referenced Person.

                  (f)    "Company" shall have the meaning set forth in the
                          -------
Preamble to this Agreement.

                  (g)    "Holder" shall mean, as applicable, any Person owning
                          ------
or having the right to acquire a Registrable Security from time to time.

                  (h)    "1934 Act" shall mean the Securities Exchange Act of
                          --------
1934, as amended.

                  (i)    "Person" shall mean any individual or a corporation,
                          ------
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or agency
or political subdivision thereof) or other entity of any kind.

                  (j)    "Purchasers" shall have the meaning set forth in the
                          ----------
Preamble to this Agreement.

                  (k)    "register," "registered" and "registration" shall
                          --------    ----------       ------------
mean a registration effected by preparing and filing with the SEC a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.

                  (l)    "Registrable Securities" shall mean the Warrants and
                          ----------------------
the Warrant Shares, in each case until such time as such securities have been
sold pursuant to an effective registration statement or an applicable exemption
from registration under the Act and are no longer subject to restrictions on
transfer under the Act.

                  (m)    "Requisite Holders" shall mean the holders of a
                          -----------------
majority of the outstanding shares of Common Stock of the Company issued or
issuable upon exercise of the Warrants and constituting Registrable Securities.

                  (n)    "Rule 144" shall mean Rule 144 promulgated under the
                          --------
Act.

                  (o)    "SEC" shall mean the Securities and Exchange
                          ---
Commission.
<PAGE>

                                      -3-

                  (p)    "Securities Purchase Agreement" shall have the meaning
                          -----------------------------
set forth in the Recitals to this Agreement.

                  (q)    "Warrants" shall have the meaning set forth in the
                          --------
Recitals to this Agreement.

                  (r)    "Warrant Shares" shall have the meaning set forth in
                          --------------
the Recitals to this Agreement.

         1.1      Other Definitions
                                                                 Defined
         Term                                                    in Section
         ----                                                    ----------

         "Demand Registration".................................. Section 2.1(a)
          -------------------
         "Indemnified Party".................................... Section 2.7(a)
          -----------------
         "Indemnified Person(s)"................................ Section 2.7(b)
          ---------------------
         "Initiating Holders"................................... Section 2.1(c)
          ------------------
         "selling security holder".............................. Section 2.6
          -----------------------
         "Violation"............................................ Section 2.7(a)
          ---------

Other capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Securities Purchase Agreement.

         2.       Registration Rights. The Company covenants and agrees as
                  follows:

         2.1      Demand Registration.

                  (a)    The Holders of a majority of the then outstanding
Registrable Securities shall have the right at any time to make a written
request of the Company to register and, upon the receipt of such written
request, the Company shall register under the Act the number or aggregate
principal amount, as applicable, of Registrable Securities which are the subject
of such request (each, a "Demand Registration").
                          -------------------

                  (b)    In connection with a Demand Registration made pursuant
to Section 2.1, the Company shall:

                  (i)    within ten (10) days of the receipt thereof, give
         written notice of such request to all Holders of Warrants and Warrant
         Shares; and

                  (ii)   file as soon as practicable, and in any event within
         ninety (90) days of the receipt of such request, a registration
         statement under the Act covering all War-
<PAGE>

                                      -4-

         rants or Warrant Shares, as the case may be, constituting Registrable
         Securities (subject to the limitations of Section 2.1(c) and subject to
         the provisions of Section 2.6), which the Holders of the applicable
         Registrable Securities request to be registered, within twenty (20)
         days of the mailing of such notice by the Company in accordance with
         Section 3.6.

                  (c)    If the Holders initiating a registration request
pursuant to Section 2.1(a) (any such Holders, the "Initiating Holders") intend
                                                   ------------------
to distribute the applicable Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2.1(a) and the Company shall include such
information in the applicable written notice referred to in Section 2.1(b)(i).
The managing underwriter will be selected by the majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company, or, if
such Initiating Holders so direct, the Company shall select the managing
underwriter, which shall be reasonably acceptable to the Initiating Holders. In
any such event, the right of any Holder to include such Holder's Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement, a custody
agreement and a power of attorney, each in customary form with the underwriter
or underwriters selected for such underwriting and deliver an opinion of counsel
in customary form to such underwriter or underwriters.

                  (d)    Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
2.1 a certificate signed by the president or chief executive officer of the
Company stating that in the good faith judgment of its board of directors it
would be materially adverse to the Company and its security holders for such
registration statement to be filed at that time and it is therefore essential to
defer the filing of such registration statement, or the filing of such
registration statement would materially interfere with or otherwise adversely
affect in any material respect any financing, acquisition, corporate
reorganization or other material transaction or development involving the
Company, the Company shall have the right to defer such filing for a period of
not more than 90 days after receipt of the request of the Initiating Holders;
provided, however, that the Company may utilize this right no more than once in
--------  -------
any twelve-month period.

                  (e)    Notwithstanding anything else in this Agreement to the
contrary, (i) the Company shall not be obligated to effect, or to take any
action to effect, any Demand Registration pursuant to this Section 2.1 for an
Initiating Holder after the Company has effected one (1) Demand Registration
pursuant to this Section 2.1 in response to a registration request by such
Initiating Holder and such Demand Registration has been declared or ordered
<PAGE>

                                      -5-

such Initiating Holder and such Demand Registration has been declared or ordered
effective; provided, however, that such registration remains effective under the
           --------  -------
Act until the earlier of (x) an aggregate of 120 days after the effective date
thereof or (y) the consummation of the distribution by the Holders participating
in such registration of all of the Registrable Securities covered thereby;
provided, further, that a registration shall not constitute a Demand
--------- -------
Registration if (A) after such Demand Registration has become effective such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason not attributable to the Initiating Holders and such interference is not
thereafter eliminated or (B) the conditions specified in the underwriting
agreement, if any, entered into in connection with such Demand Registration are
not satisfied or waived (other than any conditions, the satisfaction of which is
solely within the control of the selling Holders).

                  (f)    A registration will not count as a Demand Registration
until it has become effective (unless the Initiating Holders withdraw the
Registrable Securities or if such failure to become effective results solely
from the failure of the Initiating Holders to fulfill an obligation or satisfy a
condition under this Agreement, in which cases such demand will count as a
Demand Registration unless the Initiating Holders agree to pay all expenses of
such registration (as described in Section 2.5)). Except as provided above, the
Company will pay all expenses in connection with any registration initiated as a
Demand Registration, whether or not it becomes effective.

         2.2      Piggyback Registration.

                  (a)    Company Shares. If the Company proposes to register any
                         --------------
of its Common Stock or Common Stock Equivalents under the Act in connection with
the public offering of Common Stock or Common Stock Equivalents solely for cash,
then the Company shall, at such time, promptly give each Holder of Registrable
Securities written notice of such registration setting forth the date on which
the Company proposes to file such registration statement (which date shall be no
earlier than 20 days from the date of such notice). Upon the written request of
any such Holder given within twenty (20) days after mailing of such notice by
the Company in accordance with Section 3.6, the Company shall cause to be
registered under the Act and include in the same registration statement all of
the Registrable Securities that each such Holder has requested to be registered
and take any and all other actions reasonably necessary under United States
federal or state laws or otherwise to permit such Holders to effect the proposed
sale or other disposition of the Registrable Securities.

         2.3      Obligations of the Company. Whenever required under this
Section 2 to effect the registration of any Registrable Securities, the Company
shall promptly:
<PAGE>

                                      -6-

                  (a)    prepare and file with the SEC a registration statement
         with respect to such Registrable Securities and use its best efforts to
         cause such registration statement to become effective, and keep such
         registration statement effective for a period of up to one hundred
         twenty (120) days or until the distribution contemplated in the
         Registration Statement has been completed; provided, however, that
                                                    --------  -------
         before filing any such registration statement or amendments thereto,
         the Company will furnish to the Holders of Registrable Securities
         proposed to be included in any such registration statement copies of
         all such documents proposed to be filed and afford such Holders a
         reasonable opportunity to comment thereon;

                  (b)    prepare and file with the SEC such amendments and
         supplements to such registration statement and the prospectus used in
         connection with such registration statement as may be necessary to
         comply with the provisions of the Act with respect to the disposition
         of all securities covered by such registration statement;

                  (c)    furnish to the Holders of Registrable Securities
         proposed to be included in any such registration statement such numbers
         of copies of a prospectus, including a preliminary prospectus, in
         conformity with the requirements of the Act, and such other documents
         as they may reasonably request in order to facilitate the disposition
         of Registrable Securities owned by them;

                  (d)    use its best efforts to register and qualify the
         securities covered by such registration statement under the securities
         or Blue Sky laws of such jurisdictions as shall be reasonably requested
         by the Holders; provided, however, that the Company shall not be
                         --------  -------
         required in connection therewith or as a condition thereto to qualify
         to do business or to file a general consent to service of process in
         any such jurisdictions;

                  (e)    in the event of any underwritten public offering, enter
         into and perform its obligations under an underwriting agreement in
         usual and customary form with the managing underwriter of such offering
         and, in connection therewith, the applicable Company shall cooperate
         with the managing underwriter and shall attend such meetings and travel
         to such places to aid in the marketing of such underwritten public
         offering as the underwriters may reasonably request;

                  (f)    notify each Holder of Registrable Securities covered by
         such registration statement at any time when a prospectus relating
         thereto is required to be delivered under the Act of the happening of
         any event as a result of which the prospectus included in such
         registration statement, as then in effect, includes an untrue statement
         of a material fact or omits to state a material fact required to be
         stated therein or necessary to make the statements therein not
         misleading in the light of the circumstances then existing;
<PAGE>

                                      -7-

                  (g)    use its best efforts to cause all such Registrable
         Securities registered pursuant hereunder to be listed on each
         securities exchange on which similar securities issued by the Company
         are then listed;

                  (h)    provide a transfer agent and registrar for all
         Registrable Securities registered pursuant hereunder and a CUSIP number
         for all such Registrable Securities, in each case not later than the
         effective date of such registration statement;

                  (i)    in the event of an underwritten public offering, use
         its best efforts to obtain, at the request of any Holder requesting
         registration of Registrable Securities pursuant to this Section 2, (i)
         an opinion, dated such date, of the counsel representing the Company
         for the purposes of such registration, in form and substance as is
         customarily given to underwriters in an underwritten public offering,
         addressed to the underwriters, if any, and to the Holders requesting
         registration of Registrable Securities and (ii) a letter, dated such
         date, from the independent certified public accountants of the
         applicable Company, in form and substance as is customarily given by
         independent certified public accountants to underwriters in an
         underwritten public offering, addressed to the underwriters, if any,
         and to the Holders requesting registration of Registrable Securities;
         and

                  (j)    take such other customary and reasonable actions as the
         Holders of a majority of the Registrable Securities to be included in
         such registration statement or the underwriters, if any, reasonably
         request in order to facilitate the distribution of such Registrable
         Securities.

         2.4      Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2 with
respect to the Registrable Securities of any selling Holder that the Holder
shall furnish to such Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities as shall be reasonably required to effect the registration of such
Holder's Registrable Securities.

         2.5      Expenses of Registration. All expenses (other than
underwriting discounts and commissions) incurred in connection with
registrations, filings or qualifications pursuant to Section 2.1 or 2.2,
including (without limitation) all registration, filing and qualification fees,
SEC and state "Blue Sky" filings, printers' and accounting fees (including the
cost of "cold comfort" letters, if required), fees and disbursements of counsel
for the Company and the reasonable fees and disbursements of one counsel for the
Holders of Registrable Securities (selected by the Holders of a majority of
Registrable Securities to be registered) included in each registration made
pursuant to this Agreement shall be borne by the Company; provided, however,
                                                          --------  -------
that the Company shall not be required to pay for any expenses of any
registration
<PAGE>

                                      -8-

proceeding begun pursuant to Section 2.1 if the registration request is
subsequently withdrawn or the registration statement does not become effective,
in each case, in the circumstances described in Section 2.1(f) (in which case
all participating Holders shall severally and proportionately bear such
expenses), unless the Requisite Holders agree to forfeit their right to one (1)
demand registration right pursuant to Section 2.1(f).

         2.6      Underwriting Requirements. (a) In connection with any offering
involving an underwriting of Registrable Securities, the Company shall not be
required under Section 2.2 to include any Registrable Securities of a Holder in
such underwriting unless such Holder accepts the terms of the underwriting as
agreed upon between the Company and the underwriters; provided, however, that
                                                      --------  -------
under no circumstances will any Holder be obligated to make representations or
provide indemnities except with respect to information reasonably required to be
furnished pursuant to Section 2.4.

                  (b)    With respect to a registration pursuant to Section 2.1,
if the total amount of securities, including Registrable Securities, requested
by security holders to be included in such offering exceeds the amount of
securities that the managing underwriters with respect to such registration
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities which the managing underwriters determine in
their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Holders according to
the total amount of securities entitled to be included therein owned by each
such Holder or in such other proportions as shall be mutually agreed to by such
Holders); provided, however, that in no event shall any Registrable Securities
          --------  -------
proposed to be included in any registration be excluded from such offering if
the securities of any selling security holder other than a Holder of Registrable
Securities or any securities offered by the Company are included.

                  (c)    With respect to a registration pursuant to Section 2.2,
if the total amount of securities, including Registrable Securities, requested
by security holders to be included in such offering exceeds the amount of
securities that the managing underwriters with respect to such registration
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities which the managing underwriters determine in
their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Company and the
selling security holders, including the Registrable Securities, according to the
total amount of securities entitled to be included therein owned by each such
selling security holder or in such other proportions as shall mutually be agreed
to by such selling security holders).
<PAGE>

                                      -9-


         2.7      Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 2:

                  (a)    To the extent permitted by law, the Company will
         indemnify and hold harmless each selling Holder, and each officer,
         director, employee, affiliate and each person, if any, who controls
         such Holder within the meaning of the Act or the 1934 Act (any of the
         foregoing persons, an "Indemnified Party"), against any losses, claims,
                                -----------------
         damages, or liabilities (joint or several) to which they may become
         subject under the Act, or the 1934 Act or other federal or state
         securities law, insofar as such losses, claims, damages, or liabilities
         (or actions in respect thereof) arise out of or are based upon any of
         the following statements, omissions or violations (collectively, a
         "Violation"): (i) any untrue statement or alleged untrue statement of a
          ---------
         material fact contained in such registration statement, including any
         preliminary prospectus or final prospectus contained therein or any
         amendments or supplements thereto, (ii) the omission or alleged
         omission to state therein a material fact required to be stated
         therein, or necessary to make the statements therein not misleading, or
         (iii) any violation or alleged violation by the Company of the Act, the
         1934 Act, any state securities law or any rule or regulation
         promulgated under the Act, or the 1934 Act or any state securities law;
         and the Company will pay to each Indemnified Party, as incurred, any
         legal or other expenses reasonably incurred by them in connection with
         investigating or defending any such loss, claim, damage, liability, or
         action; provided, however, that the indemnity agreement contained in
                 --------  -------
         this Section 2.7(a) shall not apply to amounts paid in settlement of
         any such loss, claim, damage, liability or action if such settlement is
         effected without the consent of the Company (which consent shall not be
         unreasonably withheld or delayed). Nor shall the Company be liable in
         any such case for any such loss, claim, damage, liability or action to
         the extent that it arises out of or is directly based upon a Violation
         which occurs in reliance upon and in conformity with written
         information reasonably required by Section 2.4 furnished for use in
         connection with such registration by any Indemnified Party, or which
         results from the failure of an Indemnified Party to deliver a final,
         amended or supplemental prospectus furnished an Indemnified Party and
         required to be delivered if the Violation would not have occurred if
         the delivery had been made.

                  (b)    To the extent permitted by law, each selling Holder
         will indemnify and hold harmless the Company, each of its directors,
         officers, employees and affiliates, and each person, if any, who
         controls the Company within the meaning of the Act or the 1934 Act, any
         other Holder selling securities in such registration statement and any
         controlling person of any such other Holder (any of the foregoing
         persons, an "Indemnified Person(s)"), against any losses, claims,
                      ---------------------
         damages or liabilities (joint or several) to which any of such
         Indemnified Persons may become subject under the Act, or the
<PAGE>

                                      -10-

         1934 Act or other federal or state securities law, insofar as such
         losses, claims, damages or liabilities (or actions in respect thereto)
         arise out of or are directly based upon any Violation, in each case to
         the extent (and only to the extent) that such Violation occurs in
         reliance upon and in conformity with written information reasonably
         required by Section 2.4 furnished by such Holder for use in connection
         with such registration; and each such Holder will pay, as incurred, any
         legal or other expenses reasonably incurred by any such Indemnified
         Person in connection with investigating or defending any such loss,
         claim, damage, liability, or action; provided, however, that the
                                              --------  -------
         indemnity agreement contained in this Section 2.7(b) shall not apply to
         amounts paid in settlement of any such loss, claim, damage, liability
         or action if such settlement is effected without the consent of the
         Holder, which consent shall not be unreasonably withheld or delayed.
         Nor shall such Holder be liable in any such case for any such loss,
         claim, damage, liability, or action to the extent that it arises out of
         or is based upon a Violation which results from the failure of any
         Indemnified Person to deliver a final, amended or supplemental
         prospectus furnished to any Indemnified Person, and required to be
         delivered, if the Violation would not have occurred if the delivery had
         been made; provided, however, that in no event shall any indemnity
                    --------  -------
         under this Section 2.7(b) exceed the gross proceeds from the offering
         received by such Holder.

                  (c)    Promptly after receipt by an indemnified party under
         this Section 2.7 of notice of the commencement of any action (including
         any governmental action), such indemnified party will, if a claim in
         respect thereof is to be made against any indemnifying party under this
         Section 2.7, deliver to the indemnifying party a written notice of the
         commencement thereof and the indemnifying party shall have the right to
         participate in, and, to the extent the indemnifying party so desires,
         jointly with any other indemnifying party similarly noticed, to assume
         the defense thereof with counsel mutually and reasonably satisfactory
         to the parties; provided, however, that an indemnified party (together
                         --------  -------
         with all other indemnified parties which may be represented without
         conflict by one counsel) shall have the right to retain one separate
         counsel, reasonably acceptable to the indemnifying party, with the
         reasonable fees and expenses of such counsel to be paid by the
         indemnifying party, if representation of such indemnified party by the
         counsel retained by the indemnifying party would be inappropriate due
         to actual or potential differing interests between such indemnified
         party and any other party represented by such counsel in such
         proceeding. The failure to deliver written notice to the indemnifying
         party within a reasonable time of the commencement of any such action,
         if prejudicial to its ability to defend such action, shall relieve such
         indemnifying party of any liability to the indemnified party under this
         Section 2.7, but the omission so to deliver written notice to the
         indemnifying party will not relieve the indemnifying party of any
         liability that the indemnifying party may have to any indemnified party
         otherwise under this Section 2.7.
<PAGE>

                                      -11-


          (d)  If the indemnification provided for in this Section 2.7 is
     held by a court of competent jurisdiction to be unavailable to an
     indemnified party or is insufficient to hold any indemnified party harmless
     with respect to any loss, liability, claim, damage, or expense referred to
     herein, then the indemnifying party, in lieu of indemnifying such
     indemnified party hereunder, shall contribute to the amount paid or payable
     by such indemnified party as a result of such loss, liability, claim,
     damage, or expense in such proportion as is appropriate to reflect the
     relative benefits received by the indemnified party on the one hand and the
     indemnifying party on the other, and the relative fault of the indemnifying
     party on the one hand and of the indemnified party on the other in
     connection with the statements or omissions that resulted in such loss,
     liability, claim, damage, or expense as well as any other relevant
     equitable considerations. The relative fault of the indemnifying party and
     of the indemnified party shall be determined by reference to, among other
     things, whether the untrue or alleged untrue statement of a material fact
     or the omission to state a material fact relates to information supplied by
     the indemnifying party or by the indemnified party and the parties'
     relative intent, knowledge, access to information, and opportunity to
     correct or prevent such statement or omission.

          (e)  Notwithstanding the foregoing, to the extent that the provisions
     on indemnification and contribution contained in the underwriting agreement
     entered into in connection with the underwritten public offering are in
     conflict with the foregoing provisions, the provisions in the underwriting
     agreement shall control; provided, however, that any party hereto who is
                              --------  -------
     adversely affected thereby has consented in writing to such provisions in
     the underwriting agreement.

          (f)  The obligations of the Company and the Holders under this Section
     2.7 shall survive the completion of any offering of Registrable Securities
     in a registration statement under this Section 2, and otherwise.

     2.8  Termination of Registration Rights. This Agreement (other than the
provisions of Sections 2.7, 2.9, 3.6 and 3.7) shall terminate and be of no
further force and effect on the first date on which no Registrable Securities
are outstanding.

     2.9  "Lock-Up" Agreement. The Company hereby acknowledges and agrees
that for a period of 90 days after any date upon which any Holders have made a
Demand Registration, it shall not (i) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, in respect of any
of its debt securities or capital stock, or any securities convertible into or
exercisable or exchangeable therefor or (ii) enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of such se-
<PAGE>

                                      -12-

curities, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of such securities, in cash or otherwise or (iii) file
or cause to become effective any registration statement under the Act other than
that related solely to a Demand Registration, in each case, other than such
securities to be sold pursuant to the Securities Purchase Agreement and other
than any securities issued pursuant to an employee benefit or employee stock
option plan of the Company.

     3.   Miscellaneous.

     3.1  Amendments; Waivers. The provisions of this Agreement may be modified
or amended, and waivers and consents to the performance and observance of the
terms hereof may be given, only by written instrument executed and delivered by
each of the Company and the Requisite Holders; provided, however, that any
                                               --------  -------
modification or amendment which adversely affects the rights of any Holder shall
require the consent of such Holder unless the modification or amendment
adversely affects the rights of all Holders in the same manner. The failure at
any time to require performance of any provision hereof shall in no way affect
the full right to require such performance at any time thereafter (unless
performance thereof has been waived in accordance with the terms hereof for all
purposes and at all times by the party to whom the benefit of such performance
is to be rendered). The waiver by any party to this Agreement of a breach of any
provision hereof shall not be taken or held to be a waiver of any succeeding
breach of such provision or any other provision or as a waiver of the provision
itself.

     3.2  After-Acquired Shares. All provisions of this Agreement shall apply to
all securities and instruments (i) received by a Holder as a dividend on or
other payment made to holders of shares of capital stock of the Company, or (ii)
issued in connection with a split of shares of capital stock of the Company, or
as a result of any exchange for or reclassification of shares of capital stock
of the Company, or a reorganization, recapitalization consolidation or merger.

     3.3  Successors and Assigns. This Agreement and all covenants and
agreements contained in this Agreement by or on behalf of the parties hereto
shall bind, and inure to the benefit of, the respective successors and permitted
assigns of the parties hereto.

     3.4  Rights and Obligations of Transferees. If a Holder transfers any or
all of its Registrable Securities to any person in accordance with the terms of
the Warrants and the Securities Purchase Agreement, such person and each
subsequent transferee shall have the same rights hereunder as are given to such
Holder, and shall be subject to the same obligations as are imposed upon such
Holder by the terms hereof (and all references herein to a Holder shall include
such transferee), unless otherwise provided herein. Any such transferee shall
execute
<PAGE>

                                      -13-

and deliver to the Company an instrument acknowledging such transferee's rights
and obligations hereunder to be consistent with this Section 3.4.

     3.5  Further Assurances. (a) Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable legal requirements, to
consummate and make effective the transactions contemplated by this Agreement.

          (b)  If at any time after the closing any further action is necessary
or reasonably desirable to carry out the purposes of this Agreement, the parties
hereto shall take or cause to be taken all such necessary or convenient action
and execute, and deliver and file, or cause to be executed, delivered and filed,
all necessary or convenient documentation.

          (c)  The Company agrees that after the date of this Agreement it shall
not grant any Person registration rights other than piggyback registration
rights which are subordinate to those of the Holders hereunder with respect to
any class of equity security of the Company without the consent of the Requisite
Holders, which consent shall not be unreasonably withheld.

     3.6  Notices. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three Business Days after mailing (two Business Days in the case of
express mail or overnight courier service), as follows:

          (i)  If to the Company:

               Mutual Risk Management Ltd.
               44 Church Street
               Hamilton  HM12
               Bermuda
               Attention: Chief Executive Officer
               Telephone: (441) 295-5688
               Facsimile: (441) 292-1867

          with a copy to:
<PAGE>

                                      -14-

                Mayer, Brown & Platt
                190 South LaSalle Street
                Chicago, Illinios  60603
                Attention: Richard W. Shepro
                Telephone: (312) 782-0600
                Facsimile: (312) 701-7711

          (ii)  If to the Purchasers:

                XL Insurance Ltd
                c/o XL Capital Ltd.
                XL House
                One Bermudiana Road
                Hamilton HM 11
                Bermuda
                Attention: Paul Giordano
                Telephone: (441) 294-7162
                Facsimile: (441) 292-5280

                First Union Merchant Banking 2001, LLC
                One First Union Center - 12th Floor
                301 South College Street
                Charlotte, North Carolina 28288-0732
                Attention: Wellford Tabor
                Telephone: (704) 374-4540
                Facsimile: (704) 374-6711

                High Ridge Capital Partners II, L.P.
                105 Rowayton Avenue
                Rowayton, Connecticut 06853
                Attention: James L. Zech
                Telephone: (203) 831-0104
                Facsimile: (203) 831-0480

                Century Capital Partners II, L.P.
                c/o Century Capital Management, Inc.
                One Liberty Square
                Boston, Massachusetts 02019
                Attention: Craig Eisenacher
                Telephone: (617) 482-3060
                Facsimile: (617) 542-9398
<PAGE>

                                      -15-

               Taracay Investors Company
               104 Wallacks Point
               Stamford, Connecticut 06902
               Attention: Robert Clements
               Telephone: (202) 862-4343
               Facsimile: (203) 625-8366

     3.7  Governing Law; Waiver of Jury Trial. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK. ANY DISPUTE UNDER THIS AGREEMENT THAT IS NOT SETTLED BY MUTUAL CONSENT
SHALL BE FINALLY ADJUDICATED BY ANY FEDERAL OR STATE COURT SITTING IN THE CITY,
COUNTY AND STATE OF NEW YORK, AND THE COMPANY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUCH
DISPUTE. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN NEW YORK COUNTY IN CONNECTION
WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE
MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

     3.8  Severability; Interpretation. If any provision in this Agreement is
agreed by the parties hereto to be, is deemed to be or becomes invalid, illegal,
void or unenforceable under any law that is applicable hereto, (i) such
provision will be deemed amended to conform to applicable laws so as to be valid
and enforceable or, if it cannot be so amended without materially altering the
intention of the parties hereto, it will be deleted, with effect from the date
of such agreement or such earlier date as the parties hereto may agree, and (ii)
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be impaired or affected in any way.
<PAGE>

                                      -16-

     3.9   Table of Contents; Headings. The table of contents and section
headings herein are for convenience only and shall not affect the construction
hereof.

     3.10  Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto relating to the subject matter hereof and supersedes
any and all prior oral or written agreements, representations or warranties,
contracts, understandings, correspondence, conversations and memoranda, whether
written or oral, between the parties hereto, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest, with respect to the subject matter hereof.

     3.11  Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.

     3.12  No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and the Holders and is not intended to confer any
benefit upon any other person or entity or infringe upon any rights or remedies,
except as contemplated in this Section 3.


                           [Signature Pages Follow]
<PAGE>

                                      -17-

     IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Registration Rights Agreement as of the date first above written.

                                  MUTUAL RISK MANAGEMENT LTD.


                                  By:  /s/ Elizabeth B. Price
                                      ------------------------------------------
                                      Name:  Elizabeth B. Price
                                      Title: Secretary


                                  XL INSURANCE LTD


                                  By:  /s/ Clive Tobin
                                      ------------------------------------------
                                      Name:  Clive Tobin
                                      Title: President & Chief Executive Officer


                                  FIRST UNION MERCHANT BANKING 2001, LLC


                                  By:  /s/ Frederick W. Eubank, II
                                      ------------------------------------------
                                      Name:  Frederick W. Eubank, II
                                      Title: Partner


                                  HIGH RIDGE CAPITAL PARTNERS II, L.P.


                                  By:  /s/ Steve Tynan
                                      ------------------------------------------
                                      Name:  Steve Tynan
                                      Title: President, Liberty Street Corp.,
                                                Street Partners, LP,
                                             as member of High Ridge GP II LLC,
                                             as general partner of High Ridge
                                                Capital Partners II, L.P.
<PAGE>

                                      -18-

                                  CENTURY CAPITAL PARTNERS II, L.P.
                                  BY: CCP CAPITAL II LLC, its general partner


                                  By:  /s/ Craig Eisenacher
                                      ------------------------------------------
                                      Name:  Craig Eisenacher
                                      Title: Managing Member
<PAGE>

                                      -19-

                                  TARACAY INVESTORS COMPANY


                                  By:  /s/ Robert Clements
                                      ---------------------------------------
                                      Name:  Robert Clements
                                      Title: