Catastrophe Bond Investment Venture Makes Initial Investment

Business Wire, June 12, 1997

EDISON, N.J.--(BUSINESS WIRE)--June 12, 1997--PXRE Corporation (NYSE: PXT) today announced that its recently formed joint venture, Cat Bond Investors, has completed its first investment in catastrophe bonds. This first investment is in hurricane bonds issued by Residential Reinsurance Limited, a special purpose reinsurance company for ceding insurer USAA.

Cat Bond Investors was organized by PXRE and Phoenix Home Life Mutual Insurance Company with initial committed capital of $20 million. It specializes in investing in catastrophe bonds with returns that are determined by insured losses from catastrophic events. Because the return on the venture's investments is influenced by catastrophic losses incurred by the bond issuers, PXRE provides an underwriting review of each potential investment.

Commenting on the announcement, Steven I. Goldstein, Vice President of Underwriting and Trading for PXRE, said, "We believe that with our specialized expertise in property reinsurance, we are uniquely positioned to assess the risk/reward relationship inherent in catastrophe bonds. The bonds distribute the underlying catastrophe risk in much the same way that reinsurance does. Our objective in selecting investments for the venture is to assume risk only when we are adequately compensated for that risk. We believe our first investment is very attractive in that regard."

Goldstein noted that Cat Bond Investors currently is examining other investment opportunities.

Phoenix is an insurance and investment management company with corporate offices in Hartford, Conn. With approximately $40 billion in assets under management, it is the nation's ninth largest mutual life insurer and one of its largest money managers.

PXRE provides reinsurance products and services to a domestic and international marketplace, with principal emphasis on commercial and personal property risks. To request other printed investor material from PXRE, or additional copies of this news release, please call (732) 906-6785, send e-mail to Investor_Relations@PXRE.com, or visit PXRE's web site at www.pxre.com .

CONTACT: PXRE Corporation, Edison

Sanford M. Kimmel, 732/906-8100