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                         INVESTMENT MANAGEMENT AGREEMENT

Witnesseth  this  AGREEMENT,  effective  January  29,  1997 by and  between  the
undersigned PXRE CORPORATION (the "Client") and PHOENIX INVESTMENT COUNSEL, INC.
(the "Manager") a corporation organized pursuant to the laws of The Commonwealth
of  Massachusetts,  with  its  home  office  at 56  Prospect  Street,  Hartford,
Connecticut.

In consideration of the mutual covenants  contained  herein,  the parties hereto
agree as follows:

1.      APPOINTMENT OF MANAGER

        Client hereby engages the Manager and delegates to the Manager the power
to manage (including the power to acquire or dispose of), in accordance with the
terms and conditions of this Agreement, the assets of the Account. The "Account"
shall mean the assets of the Client  which are  acceptable  to the  Manager  and
which by notice  given or caused to be given by the  Client to the  Manager  are
placed in the Account,  and the investments and reinvestments of, and all income
earned by, or distributions received with respect to, any assets in the Account,
subject to the provisions of paragraph 3 of this Agreement.  The Client may make
any  addition  to or  withdrawal  from the Account at any time and in any amount
that the Client determines,  so long as the Client promptly notifies the Manager
in writing of any addition to the Account and the amount of the addition, and so
long as the Client makes no withdrawal from the Account without first delivering
to the Manager within a reasonable time prior to the withdrawal,  written notice
of the intended withdrawal and the amount of the withdrawal.

2.      ACCEPTANCE BY MANAGER

        The Manager hereby acknowledges and agrees to the engagement provided in
paragraph 1 hereof,  and  acknowledges  and warrants that it is duly  registered
with the Securities and Exchange  Commission as an investment  adviser under the
Investment Advisers Act of 1940.

3.      INVESTMENT DIRECTION

        The  Client's   fundamental   investment  policies  and  any  applicable
investment  guidelines are set forth in Part I of Schedule A attached hereto and
made a part hereof.  The Client hereby directs the Manager to select investments
for the Account in compliance  with such  policies and in  accordance  with such
guidelines.

        Unless and until notice in writing to the contrary is given or caused to
be  given  by the  Client  to the  Manager,  all  interest  payments  and  other
distributions  with  respect to any  security  or other  property in the Account
shall be reinvested.

        Upon  receiving  written  notice from the Client  that a specified  cash
amount is required from the Account, the Manager shall liquidate such portion of
the  Account as may be  necessary  to provide the  specified  cash  amount.  The
Manager  shall in its sole  discretion  select the  assets of the  Account to be
liquidated in such event,  provided that the investment  guidelines set forth in
Schedule A shall be complied with to the extent  possible after giving effect to
such liquidation. The directions contained herein may be modified at any time by
the Client by notice in writing to the Manager.


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4.      CUSTODY OF SECURITIES

        The  Client  will  establish  and  maintain  a  custody  account  with a
custodian ("Custodian") acceptable to the Manager for all assets in the Account.
The Custodian shall be such entity as the Client may designate from time to time
by notice  given or caused to be given in  writing  to the  Manager.  The Client
agrees to give the  Manager at least  thirty  (30) days'  written  notice of any
change of Custodian.  The Client shall cause the Custodian to inform the Manager
promptly  of all assets  placed in such  Account by the Client and to  establish
reporting and accounting arrangements such that the Manager will be kept advised
as to the value of the investments (including cash and cash equivalents) held in
the Account.

5.      MANAGER'S AUTHORITY

        Subject  to  the  provisions  of  paragraph  3 and  Schedule  A of  this
Agreement,  the Manager is authorized by the Client to invest, sell and reinvest
the assets of the Account as it deems appropriate. The Manager is not authorized
to take  physical  possession  of the assets of the Account;  and the  Custodian
shall have sole  responsibility  for holding  and  safekeeping  the assets.  The
Custodian  shall make  settlement  of  purchases  and sales of such  assets upon
orders placed by the Manager pursuant to the Custodian's  established  operating
procedures.  The Manager shall  promptly  notify the Custodian in writing of any
purchase or sale made for the Account.

        The Manager shall select brokers and dealers for any purchase or sale of
assets of the Account. The Manager may, in the allocation of portfolio brokerage
business and the payment of brokerage  commissions,  consider the  brokerage and
research  services  furnished the Manager by brokers and dealers,  in accordance
with the provisions of Section 28(e) of the Securities  Exchange Act of 1934, as
amended.

        The  Manager  will not be  required  to take any  action,  or render any
advice,  with respect to the voting of any of the  securities in the Account and
Client agrees to be solely responsible for the voting of any such securities and
for any required recordkeeping with respect thereto.

6.      DOCUMENTATION TO BE FURNISHED

        The  Manager   shall  keep   accurate  and  detailed   accounts  of  any
investments,  receipts and disbursements,  and other transactions hereunder, and
all such  accounts and the books and records  relating  thereto shall be open to
inspection  at all  reasonable  times  by the  Client  and by any  other  person
entitled by law to inspect such records.

        Upon written request,  the Manager will make available to the Client any
information in the Manager's  possession  which may be required by the Client in
fulfilling any reporting, disclosure, or recordkeeping obligation imposed on the
Client by applicable law.


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7.      APPRAISAL; DETERMINATIONS OF VALUE

        The Manager  will provide the Client with an appraisal of the Account as
of the last day of each calendar quarter on which the New York Stock Exchange is
open (the "Appraisal  Date") during the term of this  Agreement.  Such appraisal
shall include a written  statement of each individual  asset held in the Account
on the Appraisal Date. Common stock, preferred stock, voting trust certificates,
rights,  warrants and other similar  securities for which market  quotations are
readily available are valued at market value, which is determined using the last
reported sale price, or, of no sales are reported,  the last reported bid price.
Bonds,  debentures,  notes and other fixed income  securities of similar nature,
whether  or not  traded on a national  securities  exchange,  shall be valued in
accordance with any reasonable valuation method selected by the Manager which is
based on sales  prices of the same or  comparable  securities  on or  reasonably
preceding  the Appraisal  Date.  Other  securities  and all other assets will be
valued at fair market value as determined in good faith by the Manager.

8.      COMPENSATION TO MANAGER

        The  Manager,  as full  compensation  for services  rendered  under this
Agreement,  shall be paid a fee as specified in Part II of Schedule A, as it may
be amended  from time to time by the  Manager  upon  thirty  (30) days'  written
notice to the Client.  For purposes of the  calculation of the fee, the value of
the  securities in the Account  shall be determined as of the Appraisal  Date at
the end of each calendar quarter  pursuant to paragraph 7 of this Agreement.  If
the Manager  shall serve for less than the whole of any  calendar  quarter,  its
compensation  shall be determined as provided above on the basis of the value of
the assets in the Account on the date of  termination  and shall be payable on a
pro rata basis for the period of the calendar quarter for which it has served as
Manager  hereunder.  The compensation of the Manager shall be paid by the Client
upon receipt of the Manager's statement for such compensation.

9.      ASSIGNMENT

        No assignment (as the term is defined in the Investment Adviser's Act of
1940) of this Agreement shall be made by the Manager without the written consent
of the Client.

10.     RENEWAL AND TERMINATION

        This  Agreement  shall  be  renewed   automatically  each  year  on  the
anniversary of its effective date unless it is terminated. This Agreement may be
terminated either by the Client or by the Manager,  by notice given to the other
party  hereto,  effective  thirty (30) days after  receipt of such notice.  Such
termination shall be without the payment of any penalty and without liability of
any party to the  others,  except that the party  required  to pay  compensation
under  paragraph 8 shall remain  liable for any accrued but unpaid  compensation
due the  Manager  as of the date of  termination.  In  addition,  the Client may
terminate this Agreement  without advance notice to the Manager if Client pays a
termination  fee determined as if the Manager had continued to provide  services
under this  Agreement  for a period of thirty  (30) days  after the  termination
date.  In such  case,  the  termination  date  shall be the  Appraisal  Date for
purposes of computing the termination fee. Termination by either party shall not
have the effect of canceling  orders to deposit or invest cash or to purchase or
sell  securities  or  other  property  placed  prior  to  the  effectiveness  of
termination.  Termination of this Agreement for any reason shall not relieve the
Manager of liability or responsibility  under this Agreement with respect to the
period prior to the effectiveness of the termination.


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11.     LIABILITY OF MANAGER

        Client  specifically  acknowledges  and  agrees  that  except  for  loss
resulting  from gross  negligence,  willful  misfeasance,  bad faith or reckless
disregard  on the part of the Manager in  performance  of its duties  hereunder,
neither  Manager  or any of the  Manager's  officers,  directors,  shareholders,
agents or employees shall be liable  hereunder for any action taken or not taken
in providing services hereunder.

12.     OTHER AGREEMENTS AND OBLIGATIONS

        It is understood  that the Manager may have advisory or other  contracts
with other persons,  firms, or organizations  (some of which may have investment
policies  similar  to those of the  Account)  and may have other  interests  and
businesses.  In these  connections  the  Manager may  acquire  information  of a
confidential nature. The Client agrees that the Manager shall not be required to
provide investment advice or take any other action on behalf of the Account with
respect to any particular investment if such action by the Manager would involve
a violation of law. All information and advice furnished by either party to this
Agreement shall be treated as  confidential  and shall not be disclosed to third
parties except as required by law.

        The Manager may act as investment  adviser to other clients and may give
advice,  and take action,  with respect to any of those  clients that may differ
from the advice given, or the timing or nature of action taken,  with respect to
the  Account.  The  Manager  shall have no  obligation  to  purchase or sell for
Client,  or to recommend  for purchase or sale by Client,  any security that the
Manager, its principals,  affiliates or employees may purchase for themselves or
for any other clients.

13.     NOTICES

        All notices and instructions with respect to any matters contemplated by
this  Agreement  shall be deemed  duly  given when  delivered  in writing to the
addresses below or when deposited by first-class mail addressed as follows:

(a)     To Client:
        -----------------------------------------------------------
                             Sanford M. Kimmel, CFO
                             PXRE Corporation
                             399 Thornail Street
                             Fourteenth Floor
                             Edison, NJ 08837

(b)     To the Custodian:
        -----------------------------------------------------------
                             Sean M. Greeley
                             Global Investor Services
                             Chase Manhattan Bank
                             4 Chase Metro Tech Center, 18th Floor
                             Brooklyn, NY 11245

(c)     To Manager:
        -----------------------------------------------------------
                             Mr. Paul Atkins, Senior Vice President
                             Phoenix Investment Counsel, Inc.
                             56 Prospect Street
                             P.O. Box 150480
                             Hartford, CT 06115


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14.     AUTHORITY TO PERFORM

        Each of the parties to this Agreement hereby  represents that it is duly
authorized and empowered to execute, deliver, and perform this Agreement and the
transactions  contemplated  hereby,  that such actions do not  conflict  with or
violate any provision of law, regulation, or contract, deed of trust, agreement,
or other  instrument  to which it is a party or by which it is bound or to which
it is subject and that no consent of any person or government  regulatory agency
to such party's performing its obligation under this Agreement is required which
has not been obtained, and that this Agreement is a valid and binding obligation
upon that party, enforceable in accordance with its terms.

15.     GOVERNING LAW

        The laws of the State of Connecticut  shall control all matters relating
to this Agreement and shall apply to the extent not preempted by Federal law.

16.     MISCELLANEOUS

        The Client acknowledges  receipt of Part II of the Manager's Form ADV as
required by Rule 204-3 under the  Investment  Adviser's Act of 1940, as amended,
more  than  forty-eight  (48)  hours  prior  to the  date of  execution  of this
Agreement.

        This  Agreement  is the entire  agreement of the parties with respect to
management of the assets in the Account and subject to the terms of paragraph 8,
may not be amended except by a writing signed by the parties.

        This  Agreement  shall be  effective  as of the day and year first above
written.


<TABLE>
<S>                                                     <C>
PXRE CORPORATION                                        PHOENIX INVESTMENT COUNSEL, INC.

By: /s/ Sanford M. Kimmel                               By: /s/ Paul A. Atkins
    ---------------------                                   ------------------
Title: Senior Vice President, Treasurer & CFO           Title: Senior Vice President

Date:  January 29, 1997                                 Date:  1/28/97
</TABLE>







Attachment:  Schedule A, Parts I and II


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                                                              SCHEDULE A, PART I

                      INVESTMENT OBJECTIVES AND GUIDELINES

ATTACHMENT

PXRE STATEMENT OF INVESTMENT OBJECTIVES AND GUIDELINES

Dated:  ____________________________________


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                                                             SCHEDULE A, PART II

                         INVESTMENT MANAGER COMPENSATION

The  Manager  shall  be paid a fee as  specified  below  by the  Client  as full
compensation  for  services  rendered  under the  Investment  Manager  Agreement
effective January 29, 1997.

Upon presentation of an invoice by the Manager, after the close of each quarter,
the Client shall pay the Manager a management  fee which shall be  calculated on
the value of the assets of the Account and paid at  one-fourth  of the following
annual fee rates:

         All assets.......................................0.15%

For  purposes  of the  calculation  of the  fee,  the  value  of the  securities
(including all cash and cash  equivalents) in the Account shall be determined as
of the Appraisal Date at the end of each calendar quarter.  If the Manager shall
serve for less than the whole of any calendar quarter, its compensation shall be
determined as provided  above on the basis of the value of assets in the Account
on the date of  termination  and shall be  payable  on a pro rata  basis for the
period of the calendar quarter for which it has served as Manager hereunder.  In
the event funds are  contributed  to or  withdrawn  from the Account  during the
calendar  quarter,  the amount of the  management fee then due shall be prorated
proportionately.



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