Two more Bermuda-based insurance and reinsurance companies ? Arch Capital Group and Imagine Group Holdings ? on Friday said they expect to pay out millions of dollars to settle Hurricane Katrina claims.

And Montpelier Re Holdings boosted its capital by about $600 million through a secondary share offering.

PXRE Group Ltd., which earlier this month announced a preliminary estimate of $235 million in net losses from Katrina, on Friday said it had filed a shelf registration statement with the Securities and Exchange Commission to register the offer and sale by the Company of up to $300 million of securities.

Arch, which is listed on US stock exchange Nasdaq, said it expected its earnings in the third quarter to be $110 million to $160 million lower, after tax, because of Hurricane Katrina claims. The figure takes into account the reinstated premiums the company expects to sell.

Arch's preliminary estimate represents roughly four to six percent of the company's $2.8 billion capitalisation.

Imagine Group Holdings Ltd., a privately-held group owned largely by closely-held Canadian investment firm Brascan Corporation, said it expected net losses of $17 million from Katrina. The estimate takes into account reinsurance payments and reinstatement premiums Imagine expects to sell.

Imagine was one of ten Bermuda companies put under watch by AM Best, one of the most closely followed one of the most widely followed insurance rating agencies, on Thursday night. The group's financial strength rating of A- (Excellent) and its issuer credit rating of "a-" was placed under review with negative implications.

A rating on negative watch is effectively on warning for a downgrade unless rating analysts can be satisfied the company has addressed concerns, which generally relate to a company's financial state or management.

Imagine's ratings, and those of 19 other insurers, are on negative watch because of AM Best's concerns Hurricane Katrina losses could have a negative affect on its financial position.

Katrina is likely to be the costliest ever insured disaster with a bill of up to as much as $60 billion, according to estimates from risk modeller Risk Management Solutions Inc. Bermuda reinsurance and insurance companies, based on estimates posted by the companies to date, could pay up to $5 billion in Katrina claims.

Imagine, in a statement, said its preliminary estimate of $17 million represented about three percent of shareholders' equity of $524.2 million, at the end of 2004.

The loss estimate includes exposure the company has through its Danish Re acquisition ? a purchase last year to boost Imagine's participation in the Lloyd's of London market.

Lloyd's has announced separately that its syndicates expect to pay out in the region of 1.4 billion ($2.55 billion) in Katrina claims ? roughly half of what the Bermuda market may pay out.

Another Bermuda reinsurer, Montpelier Re Holdings Ltd., said on Friday it sold 25.9 million shares of its common stock at $24 a share. This will raise about $600 million in additional capital for the company, which said on September 12 that it expects to sustain losses from Katrina between $450 million and $675 million.

The capital raising, which was underwritten by Lehman Brothers, could help keep the company's ratings after concerns were raised by AM Best analysts. On Thursday, Montpelier's financial strength rating of A (Excellent) and issuer credit rating of "A" and all debt securities were placed under review with negative implications.

Montpelier's capital raising follows its having returned $390 million in capital to shareholders, through a special dividend, earlier in the year. The company reduced its capital position after a slump in the insurance cycle resulted in fewer opportunities to sell policies for a profit. After Katrina, insurers and reinsurers expect rates, especially for property-catastrophe policies, to rise.