PXRE Group and its subsidiaries remain on Fitch?s Rating Watch Negative after a successful $474 million capital raising in the form of common stock and the private placement of perpetual preferred shares.

PXRE?s new capital is a ?positive credit event? as the amount raised exceeding PXRE?s current estimate of its net loss from Hurricanes Katrina and Rita of between $265 million and $340 million, the ratings agency said in a release yesterday.

It also also noted that past, major insurance losses have spurred significant increases in insurance and/or reinsurance prices and PXRE?s ability to successfully raise capital indicates the capital market?s confidence in both the organisation and future reinsurance pricing.

Fitch said however that PXRE?s loss estimates are significant with losses from Hurricane Katrina alone representing between 30 percent and 40 percent of PXRE?s June 30, 2005 shareholders? equity.

?This represents a greater loss than Fitch had expected from a single event. The additional capital raised will help to replenish losses and replace capital; however, the onus will be on the company to manage risks appropriately so as to not unduly expose the new or existing capital to further loss,? the ratings firm said.

Fitch adds that significant uncertainties remain as Hurricane Katrina insurance risks are unprecedented and it may take longer than normal for these losses to fully develop.

Since PXRE?s loss estimates are based on an industry loss estimate of $30 billion-$40 billion with some estimates of the industry loss as high as $60 billion, it is very possible that PXRE?s loss could grow beyond the high end of its estimated range, the ratings firm said.

Fitch said that some catastrophe reinsurers may be materially under-estimating overall catastrophe exposure based in part on extensive reliance on catastrophe modelling and assumptions.

It expects to be able to resolve the Rating Watch Negative once it believes there is a reasonably stable estimate of the industry?s and PXRE?s ultimate loss from Hurricane Katrina.

Given the very unusual nature of the losses, this could take an extended period of time but no sooner than the reporting of third-quarter 2005 financial results.