In what should be the last set of quarterly results before the finalisation of its merger with US-based Argonaut Group, PXRE has reported a net loss of $11.6 million for the second quarter of the year.

The loss was expected as the Pitts Bay Road-based company completes reorganisation of its business in preparation for the completion of the merger, which is expected to be sealed today.

It is anticipated shares of PXRE will cease trading on the NYSE today and begin trading on the NASDAQ exchange instead.

Since suffering serious losses as a result of hurricanes Katrina, Rita and Wilma in 2005, PXRE has been in a relative state of limbo. However, its underwriters have started to write new business recently for a new vehicle, Peleus Re, which has been formed between it and the Texas-based Argonaut group.

A merger between PXRE and Argonaut, which is primarily an insurance business, had been in the making before the 2005 body-blow struck the Bermuda reinsurance company. An announcement was made in March this year that the merge would take place during the third quarter, creating a company with a combined market capitalisation of just over $1.6 billion.

PXRE issued its second-quarter results late yesterday. It reported operating costs have been clipped by $1.5m (13 percent) to $9.9m mostly due to a reduction in staff and overheads.

For the quarter it made losses and loss expenses of $1m, almost totally due to net adverse development on prior-year losses, the fully diluted book value per share decreased $0.18 to $6.12.

However, PXRE said in a statement that all conditions to the closing of the pending merger with Argonaut Group have been satisfied.

"The net loss was largely due to the decrease in net premiums earned, as virtually all of the policies written by the company in 2006 expired as of December 31, 2006. PXRE has written only a limited number of new property catastrophe reinsurance contracts during the second quarter of 2007 through its newly formed Bermuda subsidiary Peleus Reinsurance," said the company in a statement.

Net premiums earned decreased 146 percent to (minus) $7.1m compared with $15.3m for the same period in 2006, however net premiums written moved into positive territory, albeit only $0.5m, during the quarter - that was a $28.4m (102 percent) jump from the (minus) $27.9m during the second quarter of 2006.