increase in its profits for the first quarter of 2001, despite a large payout for an oil rig.

The company's net income for the quarter ended March, 2001 was $5,639,000 or $0.47 per diluted share compared with $4,009,000 or $0.35 per diluted share in the same period last year.

Revenues were down marginally from $48.2 million versus $48.9 million for the same period last year, primarily because of lower investment income.

Book value at March 31, 2001 was $22.32 per share, representing an increase of two percent from $21.94 per share at December 31, 2000.

Gerald L. Radke, chairman, president and chief executive officer, said: "We are pleased to report strengthened profitability in the first quarter of 2001, despite the effects of the Petrobras oil rig loss. Our catastrophe and risk excess and finite segments are growing in line with our expectations and carry higher margins than the business we have chosen not to renew in other segments.

"This non-renewed business stemmed primarily from our decision last year to terminate our Lloyd's involvement. On the investment side of our business, we consider the return for the quarter to be satisfactory considering that the period continued to be a particularly volatile one for financial markets.

"We were also able to further reduce our exposure to the historically volatile non-hedge fund investment partnerships.'' Gross premiums written for the first quarter fell five percent to $78,057,000 compared with $82,344,000 in the year-earlier period.

The company said this decline primarily reflected the company's cessation of underwriting activities at its Lloyd's syndicate, which was partially offset by increased writings in its catastrophe and risk excess and finite segments.

Net premiums written during the period declined 22 percent to $44,498,000 versus $56,885,000 in the first quarter of 2000. The company said net written premiums reflected certain retrocessional contracts that protect the finite segment and that are expected to enhance the profitability of that business.

Net written premiums in the casualty and other lines segments were affected by the withdrawal from Lloyd's and reduced levels of business written.

Net premiums earned increased one percent to $36,266,000 in the first quarter of 2001 compared with $35,742,000 in the year-earlier period. The catastrophe and risk excess segment was up 14 percent, which more than offset the termination of the company's London business.

In April 2001, PXRE sold its Lloyd's managing agency for book value. The company continues to own PXRE Ltd., the corporate member of Lloyd's of London.

Underwriting of new business at Lloyd's was discontinued in the third quarter 2000.

During the first quarter of 2001, PXRE recorded as other comprehensive income an after-tax unrealised gain of $665,000 ($0.06 book value per share) in the value of its investment portfolio.