FIFTH AMENDMENT TO EMPLOYMENT AGREEMENT


This  Fifth  Amendment  to  the  Employment   Agreement   between  Chartwell  Re
Corporation and Richard E. Cole is entered into as of August 4, 1998.

                                    RECITALS

A.   Chartwell  Re  Corporation  (the  "Company")  entered  into  an  Employment
     Agreement (the "Agreement")  with Richard E. Cole (the  "Executive")  dated
     December 8, 1993; and

B.  The  Agreement  set  forth  the  terms  and  conditions  of the  Executive's
    employment with the Company.

NOW THEREFORE, for good and valuable consideration,  the receipt and sufficiency
of which are hereby  acknowledged,  the Company and Executive  hereby consent to
amend the Agreement as follows:

1.       Clause (i) in  Section 5(e) shall be deleted and the following shall be
         inserted in its place:

         "As soon as practicable  following the end of each calendar year ending
         on or prior to the end of the Term,  the Company shall  contribute to a
         separate account (the "Trust Account") established for the Executive in
         a rabbi  trust  (the  "Rabbi  Trust")  administered  by a bank or trust
         company  reasonably  satisfactory to the Executive (the "Trustee"),  an
         amount  equal to 20% of the Base  Salary paid to the  Executive  during
         such calendar year."

2.       The last sentence of clause (ii) in Section  5(e) shall be deleted  and
         the following shall be inserted in its place:

         "The  Trustee  shall  provide the Company  with  written  notice of any
         proposed  investment and a reasonable  period of time to respond to the
         Trustee with a written  statement that such proposed  investment  could
         reasonably  be  expected to have the adverse  effect  described  in the
         immediately  preceding  sentence.  Notwithstanding  the foregoing,  the
         Trustee shall have ultimate  investment  authority  with respect to all
         investments made of the amounts contributed to the Trust Account."

3.       The first sentence of clause (iii) in Section 5(e) shall be deleted and
         the following shall be inserted in its place:

         "For each taxable year of the Company, the Company shall be entitled to
         instruct the Trustee to deduct from the Trust Account and distribute to
         the Company as of the end of the first calendar quarter  following such
         taxable year an amount equal to the greater of zero and the following:

                                        Individual Trust Account Taxes
         (Aggregate Taxes - $50,000) x  ------------------------------
                                               Aggregate Taxes

         where  "Aggregate  Taxes" means all federal,  state and local income or
         franchise  taxes  deemed  payable by the  Company  with  respect to the
         aggregate  income or gains  (offset by losses  and loss  carryforwards)
         recognized  by the Trust  Account and each other trust  account held in
         the Rabbi Trust and "Individual Trust Account Taxes" means all federal,
         state and local income or franchise taxes deemed payable by the Company
         with respect to the income or gains  attributable  to the Trust Account
         (offset  by losses  and loss  carryforwards  of the Trust  Account on a
         separate basis)."

4.       Clause (iv) in Section 5(e) shall be deleted and the following shall be
         inserted in its place:

         "Within 10 calendar days following the Executive's attainment of age 65
         or, if earlier,  within the time periods following the Executive's Date
         of Termination  specified in Section 8, the Trustee shall make payments
         to the  Executive  in cash (or, if  consented to by the Company and the
         Executive, in kind) of the balance of the Trust Account less any amount
         which the  Trustee  may  deduct  pursuant  to clause  (iii)  above with
         respect to the period from the end of the immediately preceding taxable
         year of the  Company  to the  date  of the  payment  to the  Executive,
         including any taxes payable as a result of the distribution."

5.       Clause (v) in Section 5(e) shall be deleted and the following  shall be
         inserted in its place: 

         "For  purposes of  determining  Aggregate  Taxes and  Individual  Trust
         Account  Taxes  pursuant to this Section 5(e), it shall be assumed that
         the  Company  pays all taxes at the  maximum  marginal  rate of federal
         income taxes and state and local income and franchise taxes  applicable
         to business  corporations in the  jurisdictions in which the Company is
         subject  to state and  local  income  and  franchise  taxes,  with such
         federal and state taxes  reduced in order to reflect the  deductibility
         of any  state and  local  income  and  franchise  taxes in  determining
         federal taxes."

6.       The following shall be added to the end of clause (vi) in Section 5(e):

         "In the event that all or any portion of the  principal and interest in
         the Trust Account is not available to be  distributed  to the Executive
         for any reason,  the Company  shall be liable to the  Executive  for an
         amount equal to the amount contributed to the Trust Account,  increased
         (or  decreased)  by the  income  (or  loss)  attributable  to the Trust
         Account,  reduced by any amounts previously  distributed from the Trust
         Account  to the  Executive  or his  beneficiaries  and  reduced  by any
         amounts paid or payable to the Company pursuant to clause (iii) above."

7.       The following shall be added to the end of Section 5(h):

         "If the number of vacation, paid holiday or personal days is reduced as
         a result of a change in policy by the Company,  the Executive  shall be
         entitled to the highest  number of vacation,  paid holiday and personal
         days to which the  Executive was entitled  under Company  policy during
         any calendar year during the Term. Upon  termination in accordance with
         Section 8, the  Executive  shall be entitled  to receive  the  pro-rata
         portion of the  Executive's  then  current  Base  Salary for any of the
         Executive's  accrued and  unutilized  vacation and personal days during
         the Term."

8.       Section 6(b)shall be deleted and the following shall be inserted in its
         place:

         "Disability.  If,  as a result  of the  Executive's  incapacity  due to
         physical or mental  illness,  the Executive shall have been absent from
         his duties  hereunder on a full-time  basis for the entire period of 12
         consecutive  months,  and  within  30  days  after  written  Notice  of
         Termination  is given  (which  may occur  only after the end of such 12
         month period), the Executive shall not have returned to the performance
         of his duties hereunder on a full-time basis, the Company may terminate
         the Executive's employment hereunder for "Disability"."

9.       The last sentence of Section 6(c) shall be deleted and the following
         shall be inserted in its place:

         "Notwithstanding  the foregoing,  the Executive  shall not be deemed to
         have been terminated for Cause without (1) delivery to the Executive of
         a Notice of  Termination  (as  defined in Section  7(a)) from the Board
         finding  that in the good faith  opinion of a majority of the Board the
         Executive  was guilty of conduct  set forth above in clause (i) or (ii)
         hereof, and specifying the particulars thereof in detail, (2) providing
         a period of 30 calendar days from the date of delivery of the Notice of
         Termination  for the  Executive  to cure the  conduct  set forth in the
         Notice  of  Termination  and  (3) an  opportunity  for  the  Executive,
         together with his counsel, to be heard before the Board."

10.      Clause (i) of Section  6(d) shall be deleted and the following shall be
         inserted in its place:

         "a material and adverse change in the  Executive's  status,  authority,
         duties  or  function  or  in  the  Executive's  individual  ability  to
         participate in or receive  benefits  under any incentive  compensation,
         bonus,  stock  option,  stock  ownership,  employee  benefit  or  other
         employee  welfare  plan on the same basis as  employees  of the Company
         generally,"

11.      Clause (iii) of Section 7(b)shall be deleted and the following shall be
         inserted in its place:

         "if the Executive's  employment is terminated pursuant to Section 6(c),
         30 days after the Notice of  Termination  (provided  that the Executive
         shall not have cured the conduct set forth in the Notice of Termination
         during such 30 day period and the other  requirements  of Section  6(c)
         shall have been met), and"

12.      Section 8(a) shall be  deleted  and the following shall be inserted in 
         its place:

         "Death.  If the Executive's  employment is terminated by his death, the
         Company shall within 30 calendar days of the  Executive's  death pay to
         the   Executive's   estate  or  as  may  be   directed   by  the  legal
         representatives  of such  estate  any  amounts  accrued  and due to the
         Executive under Sections 5(a),  5(b),  5(d), 5(e), 5(f), 5(g), 5(h) and
         5(j)  through  the date of his  death,  and the  Company  shall have no
         further obligations hereunder."

13.      The number "180" in the first sentence of Section 8(b) shall be deleted
         and the number "365" shall be inserted in its place.

14.      The last sentence of Section 8(b) shall be deleted and  the  following 
         shall be inserted in its place:

         "Upon the Executive's termination of employment for Disability pursuant
         to Section 6(b),  the Company shall within 30 calendar days of the Date
         of  Termination  pay the Executive  any amounts  accrued and due to the
         Executive under Sections 5(a),  5(b),  5(d), 5(e), 5(f), 5(g), 5(h) and
         5(j)  through his Date of  Termination,  and the Company  shall have no
         further obligations hereunder."

15.      Section  8(c) shall be  deleted and the  following shall be inserted in
         its place:

         "Cause  or  By  Executive  Without  Good  Reason.  If  the  Executive's
         employment with the Company is terminated for Cause or by the Executive
         without Good Reason,  the Company  shall within 30 calendar days of the
         Date of  Termination  pay the Executive all amounts  accrued and due to
         the Executive under Sections 5(a),  5(d),  5(e),  5(f),  5(g), 5(h) and
         5(j)  through his Date of  Termination  and the  Company  shall have no
         further obligations hereunder."

16.      Clause (i) of Section  8(d) shall be  deleted  and the following  shall
         be inserted in its place:

         "within 30 calendar days of the Date of  Termination  pay the Executive
         all amounts accrued and due to the Executive under Sections 5(a), 5(b),
         5(d), 5(e), 5(f), 5(g), 5(h) and 5(j) through his Date of Termination,"

17.      Clause (ii) of Section 8(d) shall be deleted and the following shall be
         inserted in its place:

         "pay the  Executive  his Base Salary (at the highest  rate in effect at
         any time during the Term) for three years from the Date of  Termination
         (or  through  such  earlier  time  that  the  Executive   violates  the
         provisions  of Section 10) at the times such payments  would  otherwise
         have been made under Section 5(a),"

18.      Clause (iv) of Section 8(d) shall be deleted and the following shall be
         inserted in its place:

         "provide the Executive with outplacement  services having a value of at
         least $10,000 and  continuing for a period of one year from the Date of
         Termination (it being  understood and agreed that the Company shall not
         have any  obligation  to  purchase  outplacement  services in excess of
         $10,000 pursuant to this clause (iv))."

19.      The first paragraph of Section 8(e) shall be deleted and the following
         shall be inserted in its place:

         "Notwithstanding any other provisions in this Agreement,  if during the
         two year period  following a "Change of  Control" of the  Company,  the
         Executive's employment with the Company shall terminate as a result of:

                           (i) the termination of the Executive's  employment by
                  the Company  (including a failure by the Company to extend the
                  Term) other than for Disability or Cause, or

                           (ii) the Executive's termination for Good Reason,

         the Company shall pay to the Executive,  within five (5) days following
         the Date of Termination, the compensation set forth in Section 8(d)(i),
         plus (in lieu of the  compensation  set forth in Sections  8(d)(ii) and
         (iii)) a lump sum  payment  equal to the sum of (A) three (3) times the
         Executive's  Base  Salary  (at the  highest  rate in effect at any time
         during  the  Term) and (B) an amount  equal to the  greater  of (1) the
         highest annual bonus paid to the Executive  during the two fiscal years
         prior to the Change of Control or (2) the highest  annual bonus paid to
         the  Executive  after the  Change of  Control,  but only to the  extent
         payment of such amount does not subject the Executive to any Excise Tax
         (as  defined  below)  in  connection  therewith.  In  addition  to  the
         foregoing, for a period of two years following the Date of Termination,
         the Company shall provide the Executive  with  continued  participation
         (or equivalent  benefits if such participation is not permitted) in the
         employee  benefit plans  provided to the Executive  pursuant to Section
         5(c) as of the  Date of  Termination.  If  requested  by the  Executive
         within  30  calendar  days of the Date of  Termination,  in lieu of the
         obligation  of the  Company  set  forth  in the  immediately  preceding
         sentence,  the Company  shall pay to the  Executive  within 30 calendar
         days of receipt of such request the amount  needed by the  Executive to
         purchase  benefits  equivalent  to  those  provided  to  the  Executive
         pursuant to Section 5(c) as of the Date of Termination  for a period of
         two years from the Date of Termination."

20.      The fourth sentence of Section 8(f) shall be deleted and the following
         shall be inserted in its place:

         "If a  determination  (as defined in Section  1313 of the Code) is made
         that the  Executive  owes less  Excise Tax than the  amount  taken into
         account  hereunder  at the  time  of  termination  of  the  Executive's
         employment,  the  Executive  shall pay to the Company the amount of any
         refunded  Excise Tax (and any statutory  interest paid to the Executive
         by the Internal Revenue Service)  promptly upon receipt.  The Executive
         shall also pay to the Company  the value of any tax  savings  which the
         Executive  realizes as a result of the  repayment  of the Excise Tax to
         the Company."

21.      The following shall be added to the end of Section 9:

         "Except  as set forth in this  Section 9, the  Executive  shall have no
         duty to mitigate the effects of this  Agreement,  and the Company shall
         have no right to reduce the Executive's  severance  benefits under this
         Agreement."

22.      The last sentence of Section 10(d) shall be deleted and the following
         shall be inserted in its place:

         "Notwithstanding  the  foregoing  provisions  of this  Section  10, the
         Executive  (x) may  discuss  this  Agreement  with the  members  of his
         immediate family and with his personal legal and tax advisors, provided
         that,  prior to disclosing  any term or condition of this  Agreement to
         any such person,  the  Executive  shall obtain from such person for the
         benefit of the Company his or her  agreement  to observe the  foregoing
         provisions  and  (y)  may  disclose  any  information   regarding  this
         Agreement   or  other   information   regarding   the  Company  or  its
         majority-owned  subsidiaries  which,  in the opinion of the Executive's
         counsel, the Executive is legally compelled to disclose."

23.      The first paragraph of Section 11 shall be deleted and the following 
         shall be inserted in its place:

         "For the  purposes of this  Agreement,  notices,  demands and all other
         communications  provided for in this Agreement  shall be in writing and
         shall  be  deemed  to  have  been  duly  given  when  delivered  to the
         recipient, addressed as follows:"

24.      The following new paragraphs shall be added to the end of Section 13:

          "The  Executive  and  the  Company  shall  each  promptly   select  an
         arbitrator  and a third  arbitrator  shall be  selected  jointly by the
         arbitrators  selected by the parties within 15 days of their  selection
         by the  Executive  and the Company.  If the  arbitrators  are unable to
         agree on a third arbitrator within that period, then the Company or the
         Executive may request that the American Arbitration  Association select
         the third arbitrator.  The arbitrators shall possess  substantive legal
         experience in the principal  issues in dispute and shall be independent
         of the parties hereto.

         The  arbitration  shall  take  place  at a  location  selected  by  the
         arbitrators within the New York City metropolitan area. The arbitrators
         shall have the  authority to award any remedy or relief that a court of
         competent  jurisdiction  could  order  or  grant,  including,   without
         limitation, the issuance of an injunction.  Either party may apply to a
         court for enforcement of the remedy or relief the arbitrators  order or
         grant.

         Any  discovery  permitted  shall be  limited  to  information  directly
         relevant to the  controversy or claim in  arbitration.  In the event of
         discovery  disputes,  the arbitrators are directed to issue such orders
         as are  appropriate to limit discovery in accordance with the foregoing
         and as are reasonable in light of the issues in dispute,  the amount in
         controversy and other relevant considerations.

         The Company shall reimburse the Executive,  upon demand,  for all costs
         and expenses (including, without limitation attorneys' fees) reasonably
         incurred  by the  Executive  in good  faith  in  connection  with  this
         arbitration  provision,  including,  without limitation,  in connection
         with any such application  undertaken by the Executive in good faith as
         well as for all such  costs and  expenses  reasonably  incurred  by the
         Executive in connection  with entering or enforcing the award  rendered
         by the arbitrators.

         Except as necessary in court  proceedings  to enforce this  arbitration
         provision  or an  award  rendered  hereunder,  neither  a party  nor an
         arbitrator  may  disclose  the  existence,  content  or  results of any
         arbitration   hereunder  without  the  prior  written  consent  of  the
         Company."

25.      Except as expressly  amended  hereby,  the Agreement  shall continue in
         full force and effect in accordance with the provisions  thereof on the
         date hereof.

26.      This Fifth  Amendment shall inure to the benefit of and be binding upon
         the parties hereto and their respective successors and assigns.

27.      This Fifth Amendment may be executed in two or more counterparts,  each
         of which  shall  constitute  an  original,  but all of which when taken
         together shall constitute but one instrument.

28.      This Fifth  Amendment  shall be governed by and construed in accordance
         with the laws of the State of Delaware  without  regard to its conflict
         of law principles.

IN WITNESS  WHEREOF,  the Executive  has executed  this Fifth  Amendment and the
Company has caused this Fifth  Amendment  to be executed by its duly  authorized
representative.

                                            CHARTWELL RE CORPORATION


/s/ Richard E. Cole                         By: /s/ John V. Del Col
-----------------------                         --------------------------------
    Richard E. Cole                             John V. Del Col
                                                Vice President, General Counsel
                                                & Secretary