PXRE Reports Second Quarter Results Net Loss of $11.6 Million

HAMILTON, Bermuda, Aug. 6  /PRNewswire-FirstCall/ -- PXRE Group Ltd. (NYSE:PXT) today announced results for the second quarter ended June 30, 2007.  Notable items for the quarter included:

  -- On a fully diluted basis, book value per share decreased during the
     quarter by $0.18 to $6.12 at June 30, 2007
  -- Net loss before convertible preferred share dividends was $11.6 million
     for the second quarter of 2007 compared to net income before
     convertible preferred share dividends of $2.1 million for the second
     quarter of 2006
  -- On a fully diluted basis, book value per share decreased during the
     first six months of 2007 by $0.29 to $6.12 at June 30, 2007
  -- Net loss before convertible preferred share dividends was $18.8 million
     for the first six months of 2007 compared to net income before
     convertible preferred share dividends of $43.8 million for the first
     six months of 2006



All conditions to the closing of the pending merger between PXRE and Argonaut Group have been satisfied and the merger transaction is expected to close shortly.

The net loss before convertible preferred shares for the second quarter of 2007 was largely due to a decrease in net premiums earned, as virtually all of the policies written by the Company in 2006 expired as of December 31, 2006. Additionally, PXRE has written only a limited number of new property catastrophe reinsurance contracts during the second quarter of 2007 through its newly formed Bermuda subsidiary Peleus Reinsurance Ltd.

Net premiums earned in the second quarter of 2007 decreased 146%, or $22.4 million, to negative $7.1 million from $15.3 million for the same period of 2006.  The negative net premiums earned in the second quarter of 2007 are the result of $5.9 million of ceded premiums earned primarily on two multi-year ceded reinsurance treaties, which will be utilized by Peleus Re in future periods, and $1.2 million of adjustments of prior-year reinstatement premiums and estimated premiums receivable.

                     Revenues and Net Premiums Earned

                Three Months Ended               Six Months Ended
  ($000's)            June 30,                       June 30,
                  2007       2006    Change %     2007      2006   Change %
  Revenues       $5,764    $25,206       (77)   $12,041  $115,737       (90)

  Net Premiums
   Earned:
    Cat &
     Risk
     Excess     $(7,139)   $15,442      (146)  $(12,347)  $92,438      (113)
    Exited           28       (133)      121         42       (42)      200
                $(7,111)   $15,309      (146)  $(12,305)  $92,396      (113)



Net premiums written in the second quarter of 2007 increased 102%, or $28.4 million, to $0.5 million from negative $27.9 million for the same period of 2006 due to the fact that PXRE has written a limited number of new property catastrophe reinsurance contracts during the second quarter of 2007.

                           Net Premiums Written

                  Three Months Ended            Six Months Ended
  ($000's)             June 30,                      June 30,
                   2007       2006  Change %     2007      2006     Change %
  Net
   Premiums
   Written:
    Cat &
     Risk
     Excess        $454   $(27,772)      102   $(16,098)  $51,034      (132)
    Exited           28       (134)      121         42       (47)      189
                   $482   $(27,906)      102   $(16,056)  $50,987      (131)




Net investment income for the second quarter of 2007 decreased 1%, or $0.1 million, to $13.1 million for the three months ended June 30, 2007 from $13.2 million in the comparable period of 2006.  The slight decrease in net investment income was due to a $3.1 million decrease in income from our fixed maturity and short-term investment portfolios, which was caused by a decrease in invested assets attributable to cash flow used principally for the payment of claims.  The net return on the fixed maturity and short-term investment portfolios increased to 5.3% for the second quarter of 2007, on an annualized basis, compared to 5.1% during the comparable prior year period due to improved yields throughout the portfolio.  This decrease in income from our fixed maturity and short-term investment portfolios was offset by a $2.4 million decrease in investment expenses as a result of the commutation of several reinsurance contracts that required PXRE to credit interest to the counterparties to these transactions, when these contracts were in place in 2006, and a $0.6 million increase in income from our hedge fund and other invested asset portfolios during the second quarter of 2007.  As previously communicated, PXRE submitted redemption notices for its entire hedge fund portfolio in February 2006, and as a result income from hedge funds will continue to decrease in future quarters as we receive the remaining proceeds from our various hedge fund investments.  As of June 30, 2007 we have received redemption proceeds from 99.4% of the hedge fund assets held as of December 31, 2005 and the balance is expected to be received in full by the end of 2007.

Net realized investment losses for the second quarter of 2007 were $0.2 million compared to $3.4 million for the second quarter of 2006.  For both periods the losses were caused by write-downs of investment securities due to other than temporary impairment charges.

The Company had losses and loss expenses incurred for the quarter of $1.0 million.  The losses and loss expenses incurred were almost entirely due to net adverse development on prior-year losses and loss expenses during the quarter.    Losses and loss expenses incurred in the second quarter of 2006 were $0.9 million.  There were no significant property catastrophe losses during the second quarter of both 2007 and 2006.

Operating expenses decreased 13%, or $1.5 million, to $9.9 million in the second quarter of 2007 compared to $11.4 million in the second quarter of 2006 principally due to reduced human resource and facility related costs.

On a fully diluted basis, book value per share decreased for the second quarter of 2007 by $0.18 to $6.12 at June 30, 2007 primarily due to the net loss in the quarter.  During the second quarter of 2007, PXRE recorded a change in net after-tax unrealized depreciation in investments of $2.1 million in other comprehensive income.

PXRE - with operations in Bermuda, Europe and the United States - provides reinsurance products and services to a worldwide marketplace.  The Company's primary focus is providing property catastrophe reinsurance and retrocessional coverage.  The Company also provides marine, aviation and aerospace products and services.  The Company's shares trade on the New York Stock Exchange under the symbol "PXT."

PXRE Group Ltd. will conduct an investor call on Tuesday, August 7, 2007 at 9:00 a.m. Eastern Time.  The conference call can be accessed by visiting the investor relations section of PXRE Group's Web page, which can be found at http://www.pxre.com/.  The dial-in numbers are [phone], passcode 6741562, for U.S. and Canadian callers and [phone] for international callers, passcode 6741562.  Following the conclusion of the presentation, the webcast replay of the conference call will be available online approximately one hour after the call's completion at http://www.pxre.com/ or by telephone at [phone], passcode 6741562.  International callers can access the conference call replay by dialing [phone], passcode 6741562.

Quarterly financial statements are expected to be available on the Company's website under the press release section of News and Events on August 7, 2007.  To request other printed investor material from PXRE or additional copies of this news release, please call [phone], send e-mail to , or visit http://www.pxre.com/.

Statements in this release that are not strictly historical are forward- looking and are based upon current expectations and assumptions of management. Statements included herein, as well as statements made by or on behalf of PXRE in its communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements, identified by words such as "intend," "believe," "anticipate," or "expects" or variations of such words or similar expressions are based on current expectations, speak only as of the date thereof, and are subject to risk and uncertainties.  In light of the risks and uncertainties inherent in all future projections, the forward-looking statements in this report should not be considered as a representation by us or any other person that the Company's objectives or plans will be achieved. The Company cautions investors and analysts that actual results or events could differ materially from those set forth or implied by the forward-looking statements and related assumptions, depending on the outcome of certain important factors including, but not limited to, the following: (i) we face risks related to our proposed merger with Argonaut; (ii) if the merger with Argonaut is not completed, unless the Board of Directors identifies and implements a different operating strategic solution, we will not write or earn any material premiums in the future and, as a result, we expect to incur material operating losses since our remaining revenue is insufficient to cover our projected operating and other expenses; (iii) if the merger is not consummated, we may not be able to identify or implement a strategic alternative for PXRE; (iv) if the merger is not consummated and our Board of Directors concludes that no other feasible strategic alternative would be in the best interests of our shareholders, it may determine that the best course of action is to place the reinsurance operations of PXRE into runoff and eventually commence an orderly winding up and liquidation of PXRE operations over some period of time that is not currently determinable; (v) if the merger is not consummated and the Board of Directors elects to pursue a strategic alternative that does not involve the continuation of meaningful property catastrophe reinsurance business, there is a risk that the Company could incur additional material charges or termination fees in connection with our collateralized catastrophe facility and certain multiyear ceded reinsurance agreements; (vi) our ability to continue to operate our business, consummate the merger and to identify, evaluate and complete any other strategic alternative is dependent on our ability to retain our management and other key employees, and we may not be able to do so; (vii) adverse events in 2006 negatively have affected the market price of our common shares, which may lead to further securities litigation, administrative proceedings or both being brought against us; (viii) reserving for losses includes significant estimates, which are also subject to inherent uncertainties;  (ix) because of potential exposure to catastrophes in the future, our financial results may vary significantly from period to period; (x) we operate in a highly competitive environment and no assurance can be given that we will be able to compete effectively in this environment; (xi) reinsurance prices may decline, which could affect our profitability; (xii) we may require additional capital in the future; (xiii) our investment portfolio is subject to significant market and credit risks which could result in an adverse impact on our financial position or results; (xiv) we have exited the finite reinsurance business, but claims in respect of finite reinsurance could have an adverse effect on our results of operations; (xv) our reliance on reinsurance brokers exposes us to their credit risk; (xvi) we may be adversely affected by foreign currency fluctuations; (xvii) retrocessional reinsurance subjects us to credit risk and may become unavailable on acceptable terms; (xviii) we have exhausted our retrocessional coverage with respect to Hurricane Katrina, leaving us exposed to further losses; (xix) recoveries under our collateralized facility are triggered by modeled loss to a notional portfolio, rather than our actual losses arising from a catastrophe event, which creates a potential mismatch between the risks assumed through our inwards reinsurance business and the protection afforded by this facility; (xx) our inability to provide the necessary collateral could affect our ability to offer reinsurance in certain markets; (xxi) the insurance and reinsurance business is historically cyclical, and we may experience periods with excess underwriting capacity and unfavorable premium rates; conversely, we may have a shortage of underwriting capacity when premium rates are strong; (xxii) regulatory constraints may restrict our ability to operate our business; (xxiii) any determination by the United States Internal Revenue Service ("IRS") that we or our offshore subsidiaries are subject to U.S. taxation could result in a material adverse impact on the our financial position or results; and (xxiv) any changes in tax laws, tax treaties, tax rules and interpretations could result in a material adverse impact on our financial position or results.  In addition to the factors outlined above that are directly related to PXRE's business, PXRE is also subject to general business risks, including, but not limited to, adverse state, federal or foreign legislation and regulation, adverse publicity or news coverage, changes in general economic factors, the loss of key employees and other factors set forth in PXRE's SEC filings.  The factors listed above should not be construed as exhaustive.  Therefore, actual results or outcomes may differ materially from what is expressed or forecasted in such forward- looking statements.

PXRE undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events (including catastrophe events), or otherwise.

                             PXRE Group Ltd.
                      Unaudited Financial Highlights
                       (Dollars in thousands except
                            per share amounts)

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                    2007      2006       2007        2006
  Gross premiums written            ($474) ($22,098)    ($2,553)    $99,287
  Net premiums written               $482  ($27,906)   ($16,056)    $50,987

  Revenues                         $5,764   $25,206     $12,041    $115,737
  Losses and expenses             (17,261)  (23,066)    (30,734)    (71,985)
  (Loss) income before income
   taxes and convertible
   preferred share dividends      (11,497)    2,140     (18,693)     43,752
  Income tax expense                   68          -         69           -
  Net (loss) income before
   convertible preferred share
   dividends                     ($11,565)   $2,140    ($18,762)    $43,752
  Net (loss) income per diluted
   common share                    ($0.18)    $0.01      ($0.29)      $0.57
  Average diluted shares
   outstanding (000's)             72,147    71,986      72,095      77,025
  Average diluted shares
   outstanding when antidilutive
   (000's)                         72,147    71,986      72,095           -



                                                June 30,       Dec. 31,
                                                  2007           2006
  Cash and investments                         $1,022,074     $1,216,392
  Total assets                                  1,168,748      1,401,343
  Reserve for losses and loss expenses            425,343        603,241
  Shareholders' equity                            476,086        496,767
  Book value per common share (1)                    6.12           6.41
  Statutory surplus:
   Peleus Reinsurance Ltd.                        214,550 (2)          -
   PXRE Reinsurance Ltd.                          386,423 (2)    564,209 (3)
   PXRE Reinsurance Company                       138,994 (4)    137,974



                                  Three Months Ended      Six Months Ended
                                        June 30,              June 30,
                                     2007     2006        2007        2006
  GAAP Ratios: (5)
  Loss ratio                           NM      5.6%          NM       20.2%
  Expense ratio                        NM    104.5%          NM       41.8%
  Combined ratio                       NM    110.1%          NM       62.0%

  Losses Incurred by Segment:
  Cat & Risk Excess                  $493    $1,654     ($4,070)    $17,533
  Exited                              475      (804)      1,856       1,117
                                     $968      $850     ($2,214)    $18,650


  Commission and Brokerage, Net
   of Fee Income by Segment: (6)
  Cat & Risk Excess                  ($62)   $4,336       ($474)    $16,078
  Exited                               11       267          12         229
                                     ($51)   $4,603       ($462)    $16,307

  Underwriting (Loss) Income by
   Segment: (7)
  Cat & Risk Excess               ($7,570)   $9,452     ($7,803)    $58,827
  Exited                             (458)      404      (1,826)     (1,388)
                                  ($8,028)   $9,856     ($9,629)    $57,439



                                  Three Months Ended      Six Months Ended
                                       June 30,                June 30,
                                     2007      2006        2007        2006
  Underwriting (Loss) Income
   Reconciled to (Loss) Income
   Before Income Taxes and
   Convertible Preferred Share
   Dividends:
  Underwriting (loss) income (7)  ($8,028)   $9,856     ($9,629)    $57,439
  Net investment income            13,078    13,249      26,758      31,161
  Net realized investment losses     (219)   (3,379)     (2,491)     (8,038)
  Other fee income                       -         -         45            -
  Other reinsurance related
   expense                         (2,965)   (2,255)     (4,738)     (5,976)
  Operating expenses               (9,937)  (11,392)    (21,778)    (22,357)
  Foreign exchange gains (losses)     199      (338)        377      (1,265)
  Interest expense                 (3,625)   (3,601)     (7,237)     (7,212)
  (Loss) income before income
   taxes and  convertible
   preferred share dividends     ($11,497)   $2,140    ($18,693)    $43,752


  (1) After considering convertible preferred shares.
  (2) Estimated and before inter-company eliminations.
  (3) Before inter-company eliminations.
  (4) Estimated.
  (5) The loss ratio, expense ratio and combined ratio are not meaningful
      for the three and six months ended June 30, 2007.
  (6) Commission and Brokerage, Net of Fee Income by Segment excludes fee
      income earned by a consulting subsidiary.
  (7) Underwriting (Loss) Income by Segment (a GAAP financial measure):  The
      Company's reported underwriting results are its best measure of
      profitability for its individual underwriting segments and accordingly
      are disclosed in the footnotes to the Company's financial statements
      required by SFAS 131, Disclosures about Segments of an Enterprise and
      Related Information.  Underwriting (Loss) Income by Segment is
      calculated by subtracting losses and loss expenses incurred and
      commission and brokerage, net of fee income from net earned premiums.
      PXRE does not allocate net investment income, net realized investment
      gains (losses), other fee income, other reinsurance related expense,
      operating expenses, foreign exchange gains or losses, or interest
      expense to its respective underwriting segments.



These preliminary financial statements are unaudited and do not include footnotes that customarily accompany a complete set of financial statements; these footnotes will be furnished when the Company makes its filing on Form 10-Q for the quarter ended June 30, 2007.

  PXRE        Consolidated Balance Sheets
  Group Ltd.  (Dollars in thousands, except par value per share)

                                                June 30,        December 31,
                                                  2007              2006
                                              (Unaudited)

  Assets
            Investments:
              Fixed maturities, at fair value:
              Available-for-sale
               (amortized cost $461,714
               and $502,307, respectively)      $460,858          $502,254
              Trading (cost $12,848 and
               $14,794, respectively)             13,720            15,497
              Short-term investments, at
               fair value                        532,229           671,197
              Hedge funds, at fair value
               (cost $762 and $11,583,
               respectively)                       1,077            12,766
              Other invested assets, at
               fair value (cost $1,068
               and $1,717, respectively)           1,722             2,427
                Total investments              1,009,606         1,204,141
            Cash                                  12,468            12,251
            Accrued investment income              3,806             3,830
            Premiums receivable, net              57,391            93,325
            Other receivables                      6,192             7,321
            Reinsurance recoverable on
             paid losses                           4,861             3,324
            Reinsurance recoverable on
             unpaid losses                        34,874            35,327
            Ceded unearned premiums                4,375                 -
            Deferred acquisition costs                76                 8
            Other assets                          35,099            41,816
                Total assets                  $1,168,748        $1,401,343

  Liabilities
            Losses and loss expenses            $425,343          $603,241
            Unearned premiums                        737               113
            Subordinated debt                    167,095           167,089
            Reinsurance balances payable           8,930            34,649
            Deposit liabilities                   52,001            54,425
            Income tax payable                       575               597
            Other liabilities                     37,981            44,462
                Total liabilities                692,662           904,576

  Shareholders' Equity
            Serial convertible
             preferred shares, $1.00
             par value, $10,000 stated
             value -- 30 million shares
             authorized, 0.01 million
             and 0.01 million shares
             issued and outstanding,
             respectively                         58,132            58,132
            Common shares, $1.00 par
             value -- 350 million
             shares authorized, 72.6
             million and 72.4 million
             shares issued and
             outstanding, respectively            72,568            72,351
            Additional paid-in capital           873,824           873,142
            Accumulated other
             comprehensive loss                     (650)             (100)
            Accumulated deficit                 (524,798)         (503,711)
            Restricted shares at cost
             (0.4 million and 0.4
             million shares,
             respectively)                        (2,990)           (3,047)
                Total shareholders' equity       476,086           496,767
                Total liabilities and
                 shareholders' equity         $1,168,748        $1,401,343




  PXRE    Consolidated Statements of Operations and Comprehensive Operations
  Group    (Dollars in thousands, except per share amounts)
  Ltd.

                                    Three Months Ended    Six Months Ended
                                          June 30,             June 30,
                                        2007     2006        2007     2006
                                                  (Unaudited)


  Revenues
           Net premiums earned        $(7,111) $15,309    $(12,305) $92,396
           Net investment income       13,078   13,249      26,758   31,161
           Net realized investment
            losses                       (219)  (3,379)     (2,491)  (8,038)
           Fee income                      16       27          79      218
                                        5,764   25,206      12,041  115,737
  Losses and Expenses
           Losses and loss expenses
            incurred                      968      850      (2,214)  18,650
           Commission and brokerage       (35)   4,630        (428)  16,525
           Other reinsurance related
            expense                     2,965    2,255       4,738    5,976
           Operating expenses           9,937   11,392      21,778   22,357
           Foreign exchange (gains)
            losses                       (199)     338        (377)   1,265
           Interest expense             3,625    3,601       7,237    7,212
                                       17,261   23,066      30,734   71,985


           (Loss) income before
            income taxes and
            convertible preferred
            share dividends           (11,497)   2,140     (18,693)  43,752
           Income tax provision            68        -          69        -
           Net (loss) income before
            convertible preferred
            share dividends          $(11,565)  $2,140    $(18,762) $43,752
           Convertible preferred
            share dividends             1,162    1,375       2,325    2,538
           Net (loss) income to
            common shareholders      $(12,727)    $765    $(21,087) $41,214

  Comprehensive Operations, Net of Tax
           Net (loss) income before
            convertible preferred
            share dividends          $(11,565)  $2,140    $(18,762) $43,752
           Net change in unrealized
            depreciation on
            investments                (2,278)  (4,087)     (3,037) (11,715)
           Reclassification
            adjustments for losses
            included in net (loss)
            income                        215    3,374       2,487    8,033
           Minimum additional
            pension liability               -        -           -      123
           Comprehensive (loss)
            income                   $(13,628)  $1,427    $(19,312) $40,193

  Per Share
           Basic:
           (Loss) income before
            convertible preferred
            share dividends            $(0.16)   $0.03      $(0.26)   $0.61
           Net (loss) income to
            common shareholders        $(0.18)   $0.01      $(0.29)   $0.57
           Average shares
            outstanding (000's)        72,147   71,986      72,095   71,927


           Diluted:
           Net (loss) income           $(0.18)   $0.01      $(0.29)   $0.57
           Average shares
            outstanding (000's)        72,147   71,986      72,095   77,025




  PXRE     Consolidated Statements of Shareholders' Equity
  Group    (Dollars in thousands)
  Ltd.
                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  2007       2006         2007       2006
                                               (Unaudited)

  Convertible Preferred Shares
           Balance at
            beginning and end
            of period            $58,132    $58,132      $58,132    $58,132

  Common Shares
           Balance at
            beginning of
            period               $72,588    $72,410      $72,351    $72,281
           (Cancellation)
            issuance of common
            shares, net              (20)        (2)         217        127
                 Balance at
                  end of
                  period         $72,568    $72,408      $72,568    $72,408

  Additional Paid-in Capital
           Balance at
            beginning of
            period              $873,929   $875,228     $873,142   $875,224
           (Cancellation)
            issuance of common
            shares, net             (105)      (580)         682       (576)
           Balance at end of
            period              $873,824   $874,648     $873,824   $874,648

  Accumulated Other
   Comprehensive Operations
           Balance at
            beginning of
            period                $1,413    $(8,314)       $(100)   $(5,468)
           Change in
            unrealized losses
            on investments        (2,063)      (713)        (550)    (3,682)
           Change in minimum
            additional pension
            liability                  -          -            -        123
           Balance at end of
            period                 $(650)   $(9,027)       $(650)   $(9,027)

  (Accumulated Deficit)
           Balance at
            beginning of
            period             $(512,071) $(486,900)   $(503,711) $(527,349)
           Net (loss) income
            before convertible
            preferred share
            dividends            (11,565)     2,140      (18,762)    43,752
           Dividends to
            convertible
            preferred
            shareholders          (1,162)    (1,375)      (2,325)    (2,538)
           Balance at end of
            period             $(524,798) $(486,135)   $(524,798) $(486,135)

  Restricted Shares
           Balance at
            beginning of
            period               $(3,694)   $(6,846)     $(3,047)   $(7,502)
           Cancellation
            (issuance) of
            restricted shares,
            net                      204        743         (825)       603
           Amortization of
            restricted shares        500        615          882      1,411
           Balance at end of
            period               $(2,990)   $(5,488)     $(2,990)   $(5,488)

  Total Shareholders' Equity
           Balance at
            beginning of
            period              $490,297   $503,710     $496,767   $465,318
           (Cancellation)
            issuance of common
            shares, net             (125)      (582)         899       (449)
           Restricted shares,
            net                      704      1,358           57      2,014
           Unrealized
            depreciation on
            investments           (2,063)      (713)        (550)    (3,682)
           Minimum additional
            pension liability          -          -            -        123
           Net (loss) income
            before convertible
            preferred share
            dividends            (11,565)     2,140      (18,762)    43,752
           Dividends to
            convertible
            preferred
            shareholders          (1,162)    (1,375)      (2,325)    (2,538)
           Balance at end of
            period              $476,086   $504,538     $476,086   $504,538



  PXRE   Consolidated Statements of Cash Flows
  Group  (Dollars in thousands)
  Ltd.


                                Three Months Ended       Six Months Ended
                                     June 30,                June 30,
                                  2007       2006        2007        2006
                                               (Unaudited)

  Cash Flows from Operating
   Activities
         Premiums collected,
          net of reinsurance   $(17,383)    $(6,157)    $(5,841)   $136,501
         Losses and loss
          adjustment expenses
          paid, net of
          reinsurance           (47,496)   (139,269)   (176,768)   (402,590)
         Commission and
          brokerage (paid)
          received, net of fee
          income                   (247)      4,179          41      (4,816)
         Operating expenses
          paid                  (10,782)    (14,560)    (23,042)    (27,701)
         Net investment income
          received               11,959       9,472      24,075      27,400
         Interest paid           (1,372)     (1,360)     (7,166)     (7,154)
         Income taxes (paid)
          recovered                   -        (123)        (91)         91
         Trading portfolio
          purchased                   -     (52,175)          -    (101,714)
         Trading portfolio
          disposed                2,042      52,445       2,042      92,566
         Deposit liabilities
          paid                   (1,462)     (8,275)     (2,424)    (11,812)
         Other                      488        (726)     (2,521)     (3,607)
         Net cash used by
          operating activities  (64,253)   (156,549)   (191,695)   (302,836)


  Cash Flows from Investing
   Activities
         Fixed maturities
          available for sale
          purchased             (43,099)        (47)    (43,248)    (67,038)
         Fixed maturities
          available for sale
          disposed or matured    66,658      34,304      82,491     603,837
         Hedge funds purchased        -           -           -      (4,000)
         Hedge funds disposed     4,893     104,248      12,173     117,364
         Other invested assets
          purchased                   -         (35)          -         (35)
         Other invested assets
          disposed                  654         598       1,410       1,171
         Net change in short-
          term investments       38,001      19,704     138,968    (342,334)
         Payable for
          securities                  -         100           -         100
         Net cash provided by
          investing activities   67,107     158,872     191,794     309,065


  Cash Flows from Financing
   Activities
         Proceeds from
          issuance of common
          shares                    124         162         217         419
         Cash dividends paid
          to preferred
          shareholders                -      (1,375)          -      (2,538)
         Cost of shares
          repurchased                 -           -         (99)       (263)
         Net cash provided
          (used) by financing
          activities                124      (1,213)        118      (2,382)

         Net change in cash       2,978       1,110         217       3,847
         Cash, beginning of
          period                  9,490      17,241      12,251      14,504
         Cash, end of period    $12,468     $18,351     $12,468     $18,351

         Reconciliation of net
          (loss) income to net
          cash used by
          operating
          activities:
         Net (loss) income
          before convertible
          preferred share
          dividends            $(11,565)     $2,140    $(18,762)    $43,752
         Adjustments to
          reconcile net (loss)
          income to net cash
          used by operating
          activities:
         Losses and loss
          expenses              (44,639)   (168,131)   (177,898)   (478,217)
         Unearned premiums        7,593     (43,215)     (3,751)    (41,408)
         Deferred acquisition
          costs                     (76)      9,825         (68)      5,106
         Receivables              7,706      24,902      37,063     102,161
         Reinsurance balances
          payable               (25,043)     (2,365)    (25,719)     (7,916)
         Reinsurance
          recoverable            (1,889)     29,711      (1,084)     59,125
         Income taxes                68        (123)        (22)         91
         Equity in earnings of
          limited partnerships     (654)       (167)     (1,188)     (6,039)
         Trading portfolio
          purchased                   -     (52,175)          -    (101,714)
         Trading portfolio
          disposed                2,042      52,445       2,042      92,566
         Deposit liability       (1,462)     (8,275)     (2,424)    (11,812)
         Receivable on
          commutation                 -           -           -      35,154
         Other                    3,666      (1,121)        116       6,315
         Net cash used by
          operating activities $(64,253)  $(156,549)  $(191,695)  $(302,836)


DATASOURCE: PXRE Group Ltd.



CONTACT:  Robert P. Myron, Chief Financial Officer, PXRE Group Ltd.,

[phone], ; or Investors, Jamie Tully or Lesley

Bogdanow, Sard Verbinnen & Co, [phone], , for PXRE

Group Ltd.



Web site:  http://www.pxre.com/ 

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