PXRe suffered another downgrade on Friday with A.M. Best cutting the Bermuda-based property-catastrophe reinsurer?s financial strength rating to B+ from B++ and the issuer credit ratings to ?bbb-? from ?bbb?. Best also downgraded PXRe?s ICR to ?bb-? from ?bb? and all its existing and indicative debt ratings. All ratings have been placed under review with negative implications.

The actions follow A.M. Best?s previous downgrade of PXRe?s ratings on February 16, 2006 after the company disclosed it had increased its pretax cost estimates for the Gulf Coast hurricanes.

Best noted that in addition to those losses PXRe has also recorded a material valuation allowance against its income tax recoverables due to the uncertainty that they will be ultimately realised and received notices from two of its retrocessionaires that they will commute their coverages with PXRe.

This has resulted in pre-tax losses from the hurricanes being revised slightly upward from the high end of previous estimates, Best noted.

Standard & Poor?s also took further action last week, cutting PXRe?s financial strength rating two notches to BBB- from BBB+, a week after it downgraded the company to BBB+ from A-.

Best said it will continue to analyse the impact on PXRE of the additional capital loss to both the group and to the individual operating subsidiaries as well as any strategic alternatives that may be developed and the impact of rating agency triggers on PXRE?s ability to continue to do business.