PXRE Posts Q4 Gains, Net Loss for the Year, Approves Capital Increase

February 14, 2002

Bermuda’s PXRE Group Ltd. reported that its net income in the fourth quarter increased 56 percent to $8.342 million from $5.335 million for the same period in 2000. Revenues rose 18 percent to $59.964 million, while operating earnings were $8.484 million, almost triple the 2000 figure of $2.878 million. For the year, PXRE incurred a net loss of $17,967,000 or $1.55 per share compared with a loss of $10,800,000 or $0.95 per share in 2000.

The Company indicated that the loss for 2001 was mainly attributable to the WTC attacks, and added that it “continues to believe that the loss will not exceed the initial $35,300,000 estimate. Revenues for the year, which also were affected by the WTC event, totaled $201,970,000 versus $198,917,000 in 2000.”

Gerald L. Radke, Chairman, President CEO was optimistic about the future, stating that “PXRE was able to participate fully in the year-end renewal process, encountering the best terms that we have seen since the period following Hurricane Andrew. We expect our net written premiums for 2002 to more than double after adjusting for lines of business we exited in repositioning PXRE to focus on its core strengths in the Catastrophe and Risk Excess markets. This favorable business outlook, combined with the added financial strength made possible by the capital we expect to be contributed soon by new investors, positions the Company for profitable growth in 2002. We anticipate return on equity for 2002 to be in excess of our long-term target of 15%.”

The capital increase Radke mentioned was approved at a special meeting of the company’s stockholders. PXRE announced that “new investors, comprising Capital Z Financial Services Fund II, investment funds managed by Reservoir Capital Group, and Richard Rainwater, intend to invest $150 million for 15,000 shares of Series A, B and C Convertible Preferred Stock. PXRE expects to complete the issuance of these shares during the first quarter once regulatory approval of the investment is obtained. Upon completion of the transaction, PXRE expects that its total capital will exceed $500 million.”

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