HAMILTON, Bermuda (BUSINESS WIRE) - PXRE Group Ltd. (NYSE: PXT) yesterday announced that it has entered into a quota share reinsurance agreement with P-1 Re Ltd., a newly formed special purpose Bermuda reinsurer capitalised by a group of private institutional investors.

This reinsurance agreement provides PXRE with $194 million in funded reinsurance protection against property catastrophe, marine, aviation, satellite and per-risk losses over the next two years.

The transaction also is expected to generate significant underwriting management fee income for PXRE. Commenting on the announcement, Jeffrey L. Radke, President and Chief Operating Officer of PXRE Group, said, "In practice, this transaction will allow us to increase the capacity that we can offer to our clients and enhance our profile in the reinsurance market.

"Indeed, the transaction is consistent with our goal of gaining access to capital to better serve our existing and future clients while at the same time prudently managing our balance sheet and reducing the risk we retain. The additional fee income generated by the facility also should have a very positive impact on our bottom line.

"Clearly, this transaction will figure prominently in our growth strategy for the next two years as we seek to build on the substantial growth we have experienced in 2002," he continued.

"Hard market conditions persist for virtually all reinsurance and retrocessional products, and we see no indications of this easing in the near future.

"Consequently, we believe this reinsurance agreement represents an important resource for us during the year-end renewal season to help support the additional premiums we expect to write."

Radke noted that PXRE's net written premiums in the core Catastrophe and Risk Excess segment already have increased 266 percent through the first nine months of 2002 compared with the same period in 2001. Excluding the impact of the September 11th events, net written premiums in this segment increased more than 100 percent in that same period.

Salomon Smith Barney served as sole Placement Agent in connection with the private placement of the equity of P-1 Re Ltd. PXRE - with operations in Bermuda, Barbados, the United States and Europe - provides reinsurance products and services to a worldwide market place.

The company's primary focus is providing property catastrophe and retrocessional coverage, where it has been among the leading franchises for two decades.

The company also provides marine and aerospace and finite reinsurance products and services.