Bermuda-based PXRE yesterday reported higher than average loss ratios with the company saying that operating expenses had outpaced revenue growth.

But the company said it reported significantly higher revenues in its third quarter results and claimed that this was due to diversification over the past year which has added new lines of business and expanded operations.

The company's net loss on a diluted per share basis was $0.49 for the third quarter of 1999 compared with a net loss before extraordinary item of $0.93 in the year-earlier period.

An extraordinary item in the third quarter of 1998, related to the early extinguishment of debt, resulted in a net loss for that period of $13,479,000 or $0.99 per share.

The company said that the operating expenses being larger than revenue growth was typical for start-up ventures. It also said that worldwide industry loss events in the third quarter continued with unusual frequency, resulting in a net loss for PXRE in the third quarter.

Revenues for the third quarter increased 43% to $40,259,000 from $28,088,000 in the same period last year. Net loss for the quarter narrowed to $5,563,000 versus a net loss, before an extraordinary item, of $12,636,000 last year.

Year-to-date 1999 revenues increased 31% to $110,825,000. The net loss for the period was $3,279,000 or $0.28 per diluted share compared with net income before an extraordinary item of $6,539,000 or $0.48 per diluted share (net income after the extraordinary item was $5,696,000 or $0.42 per diluted share).

For the third quarter, net premiums earned increased 17 percent to $32,459,000 from $27,645,000 in the year-earlier period, reflecting the contribution of new business lines over the past two years.

These new lines of business included PXRE's Lloyd's Syndicate and other expanded international operations, its direct writing reinsurance unit, and the Company's new entry into casualty underwriting.

Losses and loss expenses incurred in the third quarter declined to $29,327,000 compared with $32,937,000 last year. These losses included approximately $15.0 million of losses and loss expenses reflecting the impact of new business units established in connection with the Company's recent diversification efforts, including PXRE's Lloyd's Syndicate.

Losses and loss expenses also included the impact of a number of third quarter catastrophes, including the earthquake in Turkey, Hurricane Floyd, Typhoon Bart, and the Taiwan earthquake, which resulted in approximately $11.0 million of losses.