8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

May 2, 2005
Date of Report (Date of earliest event reported)

PXRE GROUP LTD.

(Exact name of registrant as specified in its charter)

Bermuda	1-15259	98-0214719
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation or organization)	File No.)	Identification No.)

PXRE House	P.O. Box HM 1282
110 Pitts Bay Road	Hamilton HM FX
Pembroke HM 08	Bermuda
Bermuda
(Address, including zip code,
of principal executive offices)	(Mailing address)

(441) 296-5858
(Registrant’s telephone number, including area code)

NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01.   Regulation FD Disclosure

PXRE Group Ltd. (“PXRE”) is meeting with certain institutional investors on May 2 and 3, 2005 in New York and Boston. A copy of the PowerPoint presentation material distributed to the institutional investors at these meeting is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Note: The information in this report and Exhibit 99.1 attached hereto are furnished pursuant to Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements and Qualifications

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 hereof, and are subject to risk and uncertainties. In light of the risks and uncertainties inherent in all future projections, these forward-looking statements in this report should not be considered as a representation by us or any other person that PXRE’s objectives or plans will be achieved. PXRE 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) because of exposure to catastrophes, PXRE’s financial results may vary significantly from period to period; (ii) PXRE may be overexposed to losses in certain geographic areas for certain types of catastrophe events; (iii) PXRE operates in a highly competitive environment; (iv) reinsurance prices may decline, which could affect PXRE’s profitability; (v) underwriting reinsurance includes the application of judgment, the assessment of probabilities and outcomes, and assumption of correlations, which are subject to inherent uncertainties; (vi) reserving for losses includes significant estimates which are also subject to inherent uncertainties; (vii) a decline in the credit rating assigned to PXRE’s claim-paying ability may impact its potential to write new or renewal business; (viii) a decline in PXRE’s ratings may require us to transfer premiums retained by us into a beneficiary trust or may allow clients to terminate their contract with us; (ix) PXRE’s investment portfolio is subject to market and credit risks which could result in a material adverse impact on its financial position or results; (x) because PXRE depends on a few reinsurance brokers for a large portion of revenue, loss of business provided by them could adversely affect us; and PXRE’s reliance on reinsurance brokers exposes us to their credit risk; (xi) the impact of recently announced investigations of broker fee and placement arrangements could adversely impact PXRE’s ability to write more business; (xii) PXRE has exited the finite reinsurance business, but claims in respect of the business PXRE wrote could have an adverse effect on its results of operations; (xiii) PXRE may be adversely affected by foreign currency fluctuations; (xiv) retrocessional reinsurance subjects us to credit risk and may become unavailable on acceptable terms; (xv) the impairment of PXRE’s ability to provide collateral to cedents could affect its ability to offer reinsurance in certain markets; (xvi) the reinsurance business is historically cyclical, and PXRE may experience periods with excess underwriting capacity and unfavorable premium rates; conversely, PXRE may have a shortage of underwriting capacity when premium rates are strong; (xvii) regulatory constraints may restrict PXRE’s ability to operate its business; (xviii) contention by the United States Internal Revenue Service that PXRE or its offshore subsidiaries are subject to U.S. taxation could result in a material adverse impact on PXRE’s financial position or results; and (xix) changes in tax laws, tax treaties, tax rules and interpretations could result in a material adverse impact on PXRE’s 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.

Item 9.01.   Financial Statements and Exhibits

(c)     Exhibits

Exhibit No.	Description
99.1	PXRE Group Ltd. Investor Presentation – May 2, 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PXRE Group Ltd.
(Registrant)

By: /s/ Robert Myron                    
Name: Robert Myron
Title: Senior Vice President & Treasurer

Date: May 2, 2005

EX-99.1

Safe Harbor Statement

Cautionary Statement under “Safe Harbor,” Provision of the Private Securities Litigation Act of 1995: This presentation contains various forward-looking statements and includes assumptions concerning our operations, future results and prospects. Statements included herein, as well as statements made by or on our behalf in press releases, written statements or other documents filed with the Securities and Exchange Commission (the “SEC”), or in our communications and discussions with investors and analysts at this conference or 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 and are subject to risk and uncertainties. In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this presentation should not be considered as a representation by us or any other person that our objectives or plans will be achieved. We caution investors and analysts that actual results or events could differ materially from those set forth or implied by the forward-looking statements. For further information regarding cautionary statements and factors affecting future operating results, please refer to PXRE Group’s public filings with the SEC.

2

Non-GAAP Financial Measures

In certain instances when presenting PXRE’s results, management has included and discussed certain “non-GAAP” financial measures. For example, operating income excludes after-tax realized investment gains and losses and foreign exchange gains and losses, as well as other non-recurring items. These excluded items may be material in a period. Management believes that providing non-GAAP financial measures such as operating income provides useful information regarding PXRE’s results of operations consistent with industry practices which enables investors, security analysts and rating agencies to make performance comparisons with PXRE’s competitors. The reconciliation of such non-GAAP financial measures to the applicable GAAP financial measures is included in PXRE’s press releases.

3

The PXRE Franchise

	Highly-focused provider of property catastrophe and risk excess reinsurance to the worldwide marketplace
	•	Established in 1986; the longest tenured short-tail specialist reinsurer
	•	One of the leading property retrocessional writers in the world
	Strong underwriting team with proven long-term track record
	Operations in Bermuda, Europe and the United States
	Sound balance sheet, over $882 million of capital and more than $1.5 billion in total assets
	“A” rated by both A.M. Best and S&P

Well positioned to benefit from attractive fundamentals in the property catastrophe reinsurance and retrocessional business

5

Proven Strategy

	Focus on core, profitable short-tail segments
	Maintain strict risk controls
	Apply extensive technical analysis to underwriting
	Continue disciplined management of capital across underwriting cycles

A proven strategy, generating superior underwriting results
and attractive returns on capital over the long-term

6

Experienced and Talented Team

	Underwriters have an average of 23 years of underwriting experience
	Management and Directors own 7%(1); their interests are aligned with shareholders

Officer	Title / Responsibility	Years of Experience
Jeffrey Radke	CEO and President	16
Gerald Radke	Chairman	37
Guy Hengesbaugh	Chief Operating Officer	20
John Modin	EVP, CFO	18
John Daly	EVP, International Operations	28
Peter Kiernan	SVP, North America Operations	16
Andrew Stapleton	SVP, Marine and Aerospace	17
Bruce Byrnes	General Counsel	12

(1) On a fully diluted basis, including all unvested options.

7

Attractive Market Fundamentals

	2004 Hurricane Season				Expect 10% growth in cat & risk earned premiums
	•	4 of top 6 U.S. hurricane losses in history			Expect 15% growth, excluding reinstatement premiums
	•	Large Caribbean losses			Rate increases – overall increase of 5% to 8%
	Japanese Typhoons				•	Retrocession – increase of 10% to 13%
	•	Additional property losses for international reinsurers			•	North America – increase of 2% to 4%
	•	Industry exposure approximates $2-4 billion			•	International – decrease of 5% to 8%
	Asian Tsunami (December 2004)				Additional demand from retro and catastrophe customers
	Windstorm Erwin (January 2005)				Utilizing all of the primary proceeds raised during late 2004

Recent events resulted in more attractive pricing environment for the 2005 renewal season

Sources: Benfield, Sigma and PCS.

8

Retro Market Leader

	PXRE is among the top 4 retrocessional market participants worldwide
	Retro business is a unique niche with fewer competitors than traditional reinsurance
	Underwriting retrocessional business requires specialized skills
	PXRE’s proprietary models and market tenure allow it to successfully underwrite despite the lack of transparency
	Client relationships are critical

Retro business has higher returns than traditional
catastrophe reinsurance

9

Proven Performance
Through the Cycle

($ in millions)

10

Focus on Catastrophe & Retrocessional Markets

($ in millions)		Property Catastrophe		Property Retrocession		Specialty Risk		Property Risk Excess
NPW 1Q 2005(1)		$65		$44		$9		$6
Exposures	Wind/Earthquake U.S., Europe, Japan, Caribbean		Wind/Earthquake U.S., Europe, Japan, Caribbean		Aviation, Satellite, Marine		Industrial Risk Energy Generation
Commentary		Large International book		Relationships and experience are critical		Aviation market strong		Heterogeneous market
		North American book growing		Proprietary models required		Capacity shortage in satellite business		Information quality is an issue
				Data quality improving		Marine terms unattractive		Highly variable expected returns
Pricing	North America up low single digits; International down 5% to 8%			Rates up 10% - 13%		Rates up in satellites and down (but attractive) in aviation		Rates flat; improving in areas affected by losses

(1) Before ceded excess premiums.

11

Geographically Diversified
Business Mix

By Line of Business By Geography

12

Superior Underwriting Technology
and Risk Management

	Crucible
	•	Risk management system
	•	Combines proprietary retro and other models with 3rd party models
	•	Capital allocated to each deal based on profitability and correlation
	•	Allows 3rd party model optimization
	Cap on zonal aggregates
	•	Based on contractual limits
	•	Monitored dynamically by Crucible
	Risk limits
	•	Set to ensure ability to capitalize after the event
	•	Percent of capital varies with market conditions

13

Financial Strategy

	Superior financial strength ratings
	•	Rated “A” by S&P and A.M. Best
	Conservative investment philosophy
	Disciplined capital management
	•	Subordinated debt (trust preferred) to capital ratio of 19%
	•	Current dividend yield of 2.1%
	Only underwriting risk varies with the cycle

15

Financial Performance

($ in millions, except per share data)
Selected Income Statement Items:
Gross Premiums Written	$125		$346		$339		$367
Net Premiums Earned	79		308		321		269
Net Premiums Earned – Cat & Risk Excess	80		302		262		176
Net Investment Income	10		26		27		25
Underwriting Income – Cat & Risk Excess	26		70		160		108
Net Income	23		$23		$97		$65
Earnings per Share 1	$0.69		$0.82		$4.10		$3.28
Selected Ratios:
Loss Ratio	56	%	74	%	49	%	47	%
Expense Ratio	23	%	24	%	26	%	31	%
Actual Combined Ratio	79	%	98	%	75	%	78	%
Loss Ratio on Cat & Risk Excess	56	%	66	%	27	%	28	%

(1) Fully diluted earnings per share

16

Strong Balance Sheet

( $ in millions, except per share data )	March 31, 2005				December 31, 2004
Assets
Investments		$	1,184	$	1,150
Reinsurance Receivables			72		69
Other Assets			272		235
Total Assets		$	1,528	$	1,454
Liabilities:
Loss Reserves		$	461	$	460
Debt			167		167
Other Liabilities			185		130
Total Liabilities		$	813	$	757
Shareholders’ Equity:
Convertible Preferred			63		164
Common Equity			652		533
Total Shareholders’ Equity			715	697
Total Liabilities and Shareholders’ Equity		$	1,528	$	1,454

17

March 2005 Post-Conversion
Capital Structure

($ in millions, except per share data)	03/31/05		12/31/04
Shareholders’ Equity:
Convertible Preferred	63		164	(1	)
Common Equity	652		533
Total Shareholders’ Equity	715	$	697	(2	)

Notes
(1)	8% Cash pay coupon, equivalent to 4.8 million fully diluted shares ($13.27 conversion price)
(2)	Total fully diluted shares outstanding of 33.4 million

18

Recent Initiatives Significantly
Improve Financial Position

Assets

	Reinsurance receivables (RR) reduced by 57% from 2003 to 2004
	Only $2.4 million of reinsurance receivables due from reinsurers rated less than A-, without collateral, or non-current
	$200 million transfer of capital from PXRE US to PXRE Bermuda during 2004
Liabilities
	Year-end loss reserves vetted by third-party actuarial firm
	During 2004, reduced GL reserves by 65% and finite reserves by 43% through commutations and loss payments
Shareholders’ Equity
	Raised $98 million of primary capital in late 2004
	$101 million of convertible preferred converted in March 2005 – only $63 million of converts remain
	Cash dividends instead of PIK on the remaining convertible preferred

19

Key Operating Metrics Show
Strength of Business

20

Prudent Investment Philosophy

	Capital preservation is key goal
	High quality, low duration fixed income portfolio supplemented by a small fund-of-funds hedge fund portfolio
	Very low correlation between underwriting and financial risks
	Detailed portfolio guidelines and controls –diligent monitoring
	Third party investment managers:
	•	Gen Re New England Asset Management (GRNEAM) – match liabilities with high quality fixed income securities
	•	Mariner Investments – manages alternative investments focusing on strategies with better risk adjusted returns than straight equity or fixed income portfolios
	Fixed Income Portfolio – risk averse to interest rate and credit risks

21

Strong Financial Position &
Excellent Outlook

	2005 operating income guidance of $4.50 to $5.00 per share
	Mid-Point of Guidance results in 2005 Projected ROE of 21%
	Loss ratio similar to cat and risk excess loss ratios of 2002 and 2003 results in 23% ROE and $5.40 EPS
	On target to meet 2005 net earned premium growth guidance
	•	15% growth excluding reinstatements
	•	10% growth overall
	Financial strength rating of “A” recently affirmed by both S&P and AM Best
	Doubled the dividend from $.24 per year to $.48 per year; resultant yield of approximately 2%
	Improved, less dilutive, capital structure
	Financial strength as strong as its ever been

22

23