Insurance rating agencies issued more ratings warnings on Friday on concerns that insured losses from Hurricane Katrina may cause some companies to experience capital shortfalls relative to their current rating level.

PXRE was the latest Bermuda-based company to have its ratings downgraded over concern on losses from recent hurricanes in the United States.

PXRE Group Ltd. shares fell 9.05 percent to $13.46 at close of markets on Friday, a day after the company announced plans to issue more than $450 million of stock.

PXRE plans to use proceeds from the issuance of the $100 million in common stock to support the underwriting of reinsurance during the renewal period next year.

It also plans to sell approximately $375 million in perpetual preferred shares that will be mandatorily exchanged for common shares upon shareholder approval.

On Friday, Standard & Poor?s lowered its counterparty credit and financial strength ratings on PXRE from ?A? to ?A-?.

A.M. Best Co. downgraded the financial-strength rating and issuer credit ratings of the reinsurance subsidiaries of PXRE to A- from A and downgraded the issuer credit rating and all existing debt ratings.

All ratings remain under review with negative implications, Best said.

?The downgrades reflect the deterioration in PXRE?s risk-adjusted capital position due to the group sustaining net losses from hurricanes Katrina and Rita in the $265 million to $340 million range.

The group?s reported shareholders? equity at June 30, 2005 was $763 million,? Best said.

A.M. Best does not believe that successful execution of PXRE?s plan to raise approximately $450 million in capital will be sufficient to support the volatility of the group?s monoline property catastrophe focus at its former A (Excellent) financial strength rating level.

The group?s A- rating will remain under review with negative implications pending PXRE?s successful completion of its capital plan.

?If the plan is executed in accordance with A.M. Best?s expectations, which include the exchange of preferred shares to common shares, the financial strength ratings of A- (Excellent) will likely be affirmed,? Best said.

As a result of recent events in 2005, property catastrophe pricing is expected to increase, which should benefit returns, barring any other catastrophic events, A.M. Best said adding that it expects PXRE to manage its risk-adjusted capital and financial leverage ratios within acceptable ranges to support its new financial strength and debt ratings.

Jeffrey L. Radke, president & chief executive officer of PXRE responded with disappointment on Friday to the ratings agencies? decisions.

?The strong market position we have earned through our dedication to customer service and strong claims paying record over the past 23 years gives us confidence in our ability to thrive in the wake of Hurricanes Katrina and Rita and recent feedback from communications with brokers validates that confidence. We remain committed to the focused strategy that is the core of our franchise, superior historical operating performance and proven record of prompt and certain claims payments,? he said pointing to the steps his company has taken to improve its financial position and benefit from favourable market conditions following Katrina and Rita.

?Upon completion of our capital raising plan, we expect to enter the key January 1, 2006 renewal period with our strongest balance sheet ever,? he said.

The financial strength rating of of A+ (Superior) for Allied World Assurance Company Ltd. and its reinsured operating subsidiaries was also placed under review with negative implications yesterday. The financial strength rating of A+ (Superior) and the issuer credit rating of ?aa-? have been placed under review with negative implications for Allied World Assurance Company (Reinsurance) Limited.

Best?s review of AWAC came after the assessment of Hurricane Katrina losses on the company?s risk-based capital position and the potential shortfall relative to its rating level, Best said.

The ratings firm is currently in discussions with AWAC?s management concerning capitalisation plans and expects to conclude its analysis in the short term.

DOWNGRADED

PXRE

September 30: A.M. Best downgraded the financial strength rating of the reinsurance subsidiaries of PXRE Group Ltd. to A- (Excellent) from A (Excellent) and issuer credit ratings to ?a-? from ?a?. Best also downgraded the issuer credit rating to ?bbb-? from ?bbb? of PXRE and downgraded all existing debt ratings. All ratings remain under review with negative implications.

Standard & Poor?s lowered its counterparty credit and financial strength ratings on PXRE from ?A? (Strong) to ?A-? (Strong).

Olympus Re

September 15: The privately-held company does not plan to release an estimate on its Katrina losses.

A.M. Best downgraded its financial strength rating to B+ from A- on concerns that claims could threaten its financial stability.

Alea Group

September 9: Estimated a $20-$30 million pre-tax net loss from Hurricane Katrina or around three to four percent of its $706.4 million in shareholders? equity at the end of 2004..

S&P downgraded its financial strength rating September 9 from A- to BBB+, based on non-Katrina related concerns.

A.M. Best confirmed Alea?s financial strength rating of A- (Excellent) and issuer credit rating of ?a-? will remain under review with negative implications, and will now include an evaluation of the impact of Hurricane Katrina.

UNDER REVIEW WITH NEGATIVE IMPLICATIONS

PartnerRe Ltd.

September 8: Estimated third quarter losses at up to ten percent of shareholders? equity at June 30 of $3.482 billion. The estimate includes Partner Re?s exposure to Hurricane Katrina losses and other third-quarter catastrophes.

A.M. Best placed PartnerRe?s financial strength rating of A+ (Superior) and issuer credit rating of ?aa-? and all debt securities under review with negative implications.

Rosemont Holdings Ltd., a unit of by UK insurer Goshawk

September 8: Estimated Hurricane Katrina claims to be between $25 million and $30 million or ten to 12 percent of its year-end shareholders? equity of $242 million.

A.M. Best placed Rosemont?s financial strength rating of A- (Excellent) and issuer credit rating of ?a-? under review with negative implications because of Hurricane Katrina and concerns over growing claims from last year?s Hurricane Ivan.

XL Capital

September 12: Estimated it would pay around 1.75 percent of the industry?s total loss from Hurricane Katrina. Based on a total industry loss of $40 billion, XL Capital could sustain losses from Katrina of $700 million or about eight percent of XL?s total shareholders? equity of $8.37 billion at June 30.

A.M. Best placed XL?s financial strength rating of A+ (Superior) and issuer credit rating of ?aa-? and all debt securities under review with negative implications, indicating a possible downgrade.

S&P placed its ratings on CreditWatch negative.

Montpelier Re Holdings Ltd.

September 12: Estimated Katrina losses in the range of $450 million to $675 million.

A.M. Best placed Montpelier?s financial strength rating of of A (Excellent) and its issuer credit rating of ?a? and all debt securities under review with negative implications. The company raised about $600 million in additional capital in a secondary share offering closed on September 16 - a move that may have addressed concerns AM Best had on Katrina losses undermining the company?s capital base. At June 30, Montpelier had $1.46 billion in shareholders? equity.

Endurance Specialty Holdings Ltd.

September 13: Estimated net Katrina losses are $375 million and $450 million or 19 to 23 percent of its $1.98 billion in shareholders? equity at June 30.

A.M. Best placed Endurance?s financial strength rating of A (Excellent) and issuer credit rating of ?a? under review with negative implications.

IPC Re

September 15: IPC Re has not released an estimate of exposure to Katrina losses.

A.M. Best placed the company?s financial strength rating A+ (Superior) and the issuer credit rating of ?aa-? under review with negative implications.

Imagine Re

On September 16: Estimates its Katrina losses to be $17 million which represents three percent of $524.2 million in shareholders? equity at the end of 2004.

A.M. Best placed the company?s financial strength rating of A- (Excellent) and the issuer credit rating of ?a-? under review with negative implications.

RenaissanceRe Holdings Ltd.

September 9: Estimated Hurricane Katrina losses equal to one percent of the total insurance sector loss. Based on a total industry loss of $40 billion, RenRe could pay out around $400 million, or 14 percent of its $2.8 billion in shareholders? equity at June 30.

Earlier in the week, A.M. Best placed the financial strength and debt ratings of RenRe?s operating subsidiaries under review with negative implications after the company said it received a ?Wells Notice? from the Securities and Exchange Commission in connection with its February restatement of its financial results 2001-2003.

DaVinci Reinsurance Ltd. which is partially owned by RenaissanceRe and whose financial results are consolidated into RenaissanceRe, will also remain under review with negative implications pending the resolution of the ?Wells Notice? to RenaissanceRe.

September 15: A.M. Best put the financial strength rating of A (Excellent) and issuer credit rating of ?a+? under review with negative implications as it evaluates the its risk-adjusted capital position following Hurricane Katrina. Best expects that any capital issues for DaVinci will be resolved in the short term.

September 30: A.M. Best placed the financial strength rating of of A+ (Superior) for Allied World Assurance Company Ltd. and its reinsured operating subsidiaries under review with negative implications. The financial strength rating of A+ (Superior) and the issuer credit rating of ?aa-? have been placed under review with negative implications for Allied World Assurance Company (Reinsurance) Limited.