PXRE Group Ltd. on Wednesday reported a 412 percent increase in net income and significantly higher profits for the quarter and six months ended June 30 2002.

Gerald L. Radke, chairman and CEO, said, “We are pleased with PXRE's growth in business and profits during the second quarter. The catastrophe reinsurance market has remained firm, with higher rates, improved terms and favourable conditions that are largely unchanged from those witnessed at the January 1 renewals. In addition to strong premium growth in our core lines, our strategy of investing in high-quality bonds and a well-diversified hedge fund portfolio has enabled PXRE to produce attractive investment returns despite the current turmoil in the financial markets.” Mr. Radke also said PXRE's net loss related to the events of September 11 remain below the original estimate of $35 million.

Mr. Radke added, “Our decision to refocus on our core catastrophe business has enabled us to take full advantage of favourable reinsurance market conditions. Against this backdrop, our Catastrophe and Risk Excess segment continues to provide strong, profitable growth, and we have written a substantial amount of new business with the July 1 renewals. As a result, absent any significant catastrophe loss activity in the second half of the year, we believe we can anticipate a return on equity for 2002 of at least 20 percent.”

PXRE reported net income for the quarter of $19.0 million compared to $3.7 million in the second quarter of 2001. On a diluted per share basis, net income increased 184 percent to $0.88 from $0.31 in the year-earlier period.

For the six months ended June 30, 2002, net income increased 397 percent to $37.3 million from $7.5 million in the prior-year period. On a diluted per share basis, net income for the first half increased 251 percent to $2.21 from $0.63 in the same period last year.

PXRE's annualised return on equity for the quarter was 19.9 percent.

The company's book value per share, on a fully converted basis, was $19.48 per share at June 30, 2002 which represented an increase of 5 percent over the pro forma amount reported for the first quarter of 2002, which reflected the closing of a $150 million preferred share offering on April 4, 2002. Pro forma diluted earnings per share for the first half of 2002 were $1.76. These pro forma figures assume that the preferred shares were issued on January 1, 2002, and the company had achieved a 4 percent annualised yield on the new capital during the first quarter of 2002.

Revenues rose 5 percent to $55.3 million in the second quarter from $52.8 million in the year-earlier quarter. Net premiums earned, the largest component of revenues, increased 6 percent in the second quarter to $45.8 million from $43.3 million in the second quarter last year. Net premiums earned on the Company's core Catastrophe and Risk Excess segment for the second quarter of 2002 increased 104 percent to $38.0 million in the quarter. This growth was partially offset by lower net premiums earned from the company's Finite and Exited Lines segments.

Gross premiums written in the second quarter declined 14 percent to $41.8 million from $48.5 million in the same period last year, obscuring a $11.2 million 47 percent increase ($11.2 million) in the Catastrophe and Risk Excess segment. Net premiums written in the second quarter declined 44 percent to $20.7 million from $37.0 million in the same quarter last year, obscuring a 62 percent increase in the Catastrophe and Risk Excess segment. The company announced that its board of directors has declared a regular quarterly cash dividend of $0.06 per common share which will be paid on August 30, to stockholders of record as of August 16.