PXRE Group Ltd. has secured $250 million of new risk capital from a Cayman Island reinsurance company to provide coverage for second event losses arising from hurricanes in the Eastern and Gulf coasts of the United States, windstorms in northern Europe and earthquakes in California.

The completion of the transaction with Atlantic & Western Re II Limited brings the total additional risk capital that PXRE has raised in the fourth quarter to $1 billion.

The funds will support underwriting and allow the company to take advantage of the current favourable underwriting environment in its core lines of business. ?The $250 million of new risk capital provided by this collateralised transaction, when combined with our existing capital and prior catastrophe bond transaction, provides us with significant additional resources to meet our obligations to our clients,? said Jeffrey L. Radke, President and Chief Executive Officer of PXRE.

He added that the company?s recent November catastrophe bond transaction provided PXRE with significant additional resources to protect against the risk of a single extreme catastrophe event.

?The unprecedented frequency of hurricanes over the last two years and the recent changes to rating agency capital adequacy models further emphasise the importance of a capital base that can absorb losses from more than one large catastrophe.

?We were able to leverage the knowledge and modelling from our November catastrophe bond transaction to quickly and efficiently create a structure that would provide us with significant additional protection at an average annual cost of capital of only 6.2 percent.

?We expect that this will provide us with a further competitive advantage in the current renewal cycle,? said Mr. Radke.

Atlantic & Western Re financed the coverage through the issuance of $250 million in catastrophe bonds which have not been registered. Goldman, Sachs & Co. acted as sole manager for this transaction.

The Cayman transaction provides two tranches of protection. The first tranche provides $125 million of protection from January 1, 2006 through December 31, 2006. The second tranche provides $125 million of protection from January 1, 2006 through December 31, 2008. The coverage is based on a modelled loss trigger.