Exhibit 99.1
[LETTERHEAD OF A.M. BEST COMPANY]
A.M. Best Affirms Ratings of PXRE and Revises Outlook to Stable
FOR IMMEDIATE RELEASE
CONTACTS: Public Relations Analysts
Jim Peavy Robert DeRose
(908) 439-2200, ext. 5644 (908) 439-2200, ext. 5453
james.peavy@ambest.com robert.derose@ambest.com
Rachelle Striegel Keith Lennox
(908) 439-2200, ext. 5378 (908) 439-2200, ext. 5062
rachelle.striegel@ambest.com keith.lennox@ambest.com
OLDWICK, NEW JERSEY, U.S.A., May 18, 2004--A.M. Best Co. has affirmed
the financial strength rating of A (Excellent) for the reinsurance subsidiaries
of PXRE Group Ltd. (PXRE) [NYSE: PXT] (Bermuda). This rating action applies to
PXRE Reinsurance Company (Hartford, CT) and PXRE Reinsurance Ltd. (Bermuda).
Concurrently, A.M. Best has upgraded the group's debt ratings to "bb+" from "bb"
for preferred stock issues available under the company's shelf registration and
affirmed all remaining debt ratings. The outlook for all ratings has been
revised to stable from negative.
The ratings reflect PXRE's improved capitalization and strong
underwriting performance experienced since the group refocused its business
strategy in 2001 to concentrate on its core competencies in property catastrophe
reinsurance.
Since the September 11 attacks, the group has benefited from
significant rate increases experienced in its markets while a relatively low
level of catastrophic events have occurred during the same period. In 2003, PXRE
produced a 74.7% combined ratio, which, along with investment returns, generated
a return on equity of 19.2% for the year. These earnings have been further
augmented by the group's capital raising initiatives, which included $150
million in equity capital through private investors in early 2002, $62 million
in capital trust pass-through securities sold in 2003 and $27 million from the
issuance of common stock in late 2003 and early 2004. At
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[LETTERHEAD OF A.M. BEST COMPANY]
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March 2004, shareholder's equity increased to $613 million with total
capitalization now being in excess of $780 million.
Offsetting these favorable rating factors was the continued slippage in
PXRE's prior year loss reserves reported in 2003, which was largely the result
of its exit from the direct casualty reinsurance operation. The group's
management believes that it has now adequately provided reserves for its exited
lines of business. Additionally, as a global property catastrophe reinsurer,
PXRE is exposed to high impact, low frequency losses associated with
catastrophic events on a worldwide basis. PXRE manages these exposures to a
maximum threshold for any single event and, for the most part, has excluded
coverages related to terrorism.
The revised outlook reflects A.M. Best's view that PXRE has improved
its risk-adjusted capital position to a level more supportive of its financial
strength and debt ratings. Through earnings and capital raising, the group has
increased its capital base to a level that is supportive of the premium growth
experienced over the last two years and the corresponding increase in risk
exposure. A.M. Best will continue to monitor PXRE to ensure that as rates begin
to decline in its core markets, PXRE continues to execute its business strategy
in accordance with A.M. Best's expectations.
For a complete list of PXRE Group Ltd.'s financial strength and debt
ratings, please visit www.ambest.com/press/051802pxre.pdf.
For current Best's Ratings, independent data and analysis on more than
470 reinsurance companies, please visit http://www.ambest.com/reinsurance/.
For a list of A.M. Best's debt ratings, please visit
http://www.ambest.com/debtratings/.
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[LETTERHEAD OF A.M. BEST COMPANY]
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A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source.
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