Bermuda’s embattled PXRE Group Ltd. announced a net loss – before convertible preferred share dividends – of $7.2 million for the first quarter of 2007 compared to net income – before convertible preferred share dividends – of $41.6 million for the first quarter of 2006. “On a fully diluted basis, book value per share decreased during the quarter by $0.11 to $6.30 at March 31, 2007,” said the announcement.
It also explained that “virtually all of the policies written by the Company in 2006 expired as of December 31, 2006 and PXRE did not underwrite any new reinsurance contracts during the first quarter of 2007.”
PXRE has been in financial trouble (and essentially in run off) for over a year, mainly due to losses from the hurricanes of 2005 (See IJ web site Sept. 20, 2005, May 11, Feb. 20 & Feb.17, 2006). Earlier this year it agreed to a merger with the Argonaut Group to form a combined entity that will do business as Argo Group International Holdings Limited (See IJ web site March 15).
Commenting on the earnings announcement, President and CEO, Jeffrey L. Radke indicated: “The most significant events to occur this quarter were the conclusion of our strategic process with the agreement to merge with Argonaut Group, Inc. and the formation of Peleus Reinsurance Ltd., our newly established “A-” rated Bermuda platform.
“The merger process is proceeding and we have now made the required regulatory filings with the various state insurance departments and have filed a preliminary registration statement and joint proxy with the Securities & Exchange Commission. We currently expect the merger to close in the third quarter of 2007. Peleus Re has commenced operations and we expect to begin to underwrite a small and controlled book of property reinsurance business during the upcoming June and July renewals.”
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