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                     COMMON SECURITIES GUARANTEE AGREEMENT

                              PXRE Capital Trust I

                          Dated as of January 29, 1997

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                               TABLE OF CONTENTS

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                                                                                          Page

                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

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SECTION 1.1  Definitions and Interpretation..................................................1

                                   ARTICLE II
                                   GUARANTEE

SECTION 2.1  Common Securities Guarantee.....................................................4
SECTION 2.2  Waiver of Notice and Demand.....................................................4
SECTION 2.3  Obligations Not Affected........................................................4
SECTION 2.4  Rights of Holders...............................................................5
SECTION 2.5  Guarantee of Payment............................................................5
SECTION 2.6  Subrogation.....................................................................5
SECTION 2.7  Independent Obligations.........................................................6


                                  ARTICLE III
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1  Limitation of Transactions......................................................6
SECTION 3.2  Ranking.........................................................................7

                                   ARTICLE IV
                                  TERMINATION

SECTION 4.1  Termination.....................................................................7

                                   ARTICLE V
                                 MISCELLANEOUS

SECTION 5.1  Successors and Assigns..........................................................8
SECTION 5.2  Amendments......................................................................8
SECTION 5.3  Notices.........................................................................8
SECTION 5.4  Benefit.........................................................................9
SECTION 5.5  Governing Law...................................................................9
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GUARANTEE AGREEMENT

               This GUARANTEE AGREEMENT (the "Common Securities Guarantee"),
dated as of January 29, 1997, is executed and delivered by PXRE Corporation, a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of PXRE Capital Trust I, a Delaware statutory business trust (the "Issuer").

               WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of January 29, 1997, among the Administrators and
trustees named therein, PXRE Corporation, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 3,093 shares of common securities, having a
par value of $1,000 per share (the "Common Securities");

               WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and

               WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Capital Securities Guarantee") in substantially
identical terms to this Common Securities Guarantee for the benefit of the
holders of the Capital Securities (as defined in the Declaration) of the Issuer,
except that if an Event of Default (as defined in the Declaration) has occurred
and is continuing, the rights of Holders of the Common Securities to receive
Guarantee Payments under this Common Securities Guarantee are subordinated to
the rights of holders of Capital Securities to receive payments under the
Capital Securities Guarantee;

               NOW, THEREFORE, in consideration of the purchase by each Holder
of Common Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Common Securities
Guarantee for the benefit of the Holders.


                               ARTICLE IARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

               In this Common Securities Guarantee, unless the context otherwise
        requires:

               (a) capitalized terms used in this Common Securities Guarantee
        but not defined in the preamble above have the respective meanings
        assigned to them in this Section 1.1;

               (b) a term defined anywhere in this Common Securities Guarantee
        has the same meaning throughout;






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               (c) all references to "the Common Securities Guarantee" or "this
        Common Securities Guarantee" are to this Common Securities Guarantee as
        modified, supplemented or amended from time to time;

               (d) all references in this Common Securities Guarantee to
        Articles and Sections are to Articles and Sections of this Common
        Securities Guarantee, unless otherwise specified;

               (e) capitalized terms used in this Common Securities Guarantee
        have the same meanings ascribed to such terms in the Declaration unless
        otherwise defined in this Common Securities Guarantee or unless the
        context otherwise requires; and

               (f) a reference to the singular includes the plural and vice
        versa.

               "Capital Guarantee Payments" has the meaning set forth in Section
2.1.

               "Covered Person" means any Holder or beneficial owner of Common
Securities.

               "Debentures" means the junior subordinated debentures of the PXRE
Corporation designated the 8.85% Junior Subordinated Deferrable Interest
Debentures due 2027, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.

               "Declaration Event of Default" means an "Event of Default" as
defined in the Declaration.

               "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Common Securities Guarantee.

               "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Common Securities to the extent the Issuer shall have funds available
therefor in accordance with the terms of the Declaration, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor
in accordance with the terms of the Declaration, with respect to any Common
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Common Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Common Securities to the
date of payment, to the extent the Issuer shall have funds available therefor,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders in dissolution of the Issuer (in either case, the "Liquidation
Distribution").

               "Guarantees" means the Capital Securities Guarantee and this
Common Securities Guarantee, collectively.



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               "Holder" or "Holders" shall mean PXRE Corporation.

               "Indenture" means the Indenture dated as of January 29, 1997,
among the Guarantor and First Union National Bank, not in its individual
capacity but solely as trustee, and any indenture supplemental thereto pursuant
to which the Debentures are to be issued to the Institutional Trustee of the
Issuer.

               "Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.

               "Majority in liquidation amount of the Common Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Common
Securities, voting together as a class, but separately from the holders of
Capital Securities, of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Common Securities then outstanding.

               "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Common Securities Guarantee shall include:

               (a) a statement that each officer signing the Officers'
        Certificate has read the covenant or condition and the definitions
        relating thereto;

               (b) a brief statement of the nature and scope of the examination
        or investigation undertaken by each officer in rendering the Officers'
        Certificate;

               (c) a statement that each such officer has made such examination
        or investigation as, in such officer's opinion, is necessary to enable
        such officer to express an informed opinion as to whether or not such
        covenant or condition has been complied with; and

               (d) a statement as to whether, in the opinion of each such
        officer, such condition or covenant has been complied with.

               "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

               "Securities" means the Common Securities and the Capital
Securities.

               "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.



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                                   ARTICLE II
                                   GUARANTEE

SECTION 2.1 Common Securities Guarantee

               The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert; provided,
however, if an Declaration Event of Default has occurred and is continuing, the
rights of Holders of Common Securities to receive Guarantee Payments are
subordinated to the rights of holders of Capital Securities to receive payments
under the Capital Securities Guarantee ("Capital Guarantee Payments"), with the
result that no Guarantee Payments shall be made unless payment in full in cash
of all accumulated and unpaid Capital Guarantee Payments on all outstanding
Capital Securities shall have been made or provided for, and all funds
immediately available to the Institutional Trustee shall first be applied to the
payment in full in cash of all such Capital Guarantee Payments then due and
payable. The Guarantor's obligation to make Guarantee Payments will not be
discharged except by payment of the Guarantee Payments in full. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.

SECTION 2.2 Waiver of Notice and Demand

               The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 2.3 Obligations Not Affected

               The obligations, covenants, agreements and duties of the
Guarantor under this Common Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

               (a) the release or waiver, by operation of law or otherwise, of
        the performance or observance by the Issuer of any express or implied
        agreement, covenant, term or condition relating to the Common Securities
        to be performed or observed by the Issuer;

               (b) the extension of time for the payment by the Issuer of all or
        any portion of the Distributions, Redemption Price, Liquidation
        Distribution or any other sums payable under the terms of the Common
        Securities or the extension of time for the performance of any other
        obligation under, arising out of, or in connection with, the Common
        Securities (other than an extension of time for payment of
        Distributions, Redemption Price, Liquidation Distribution or other sum
        payable that results from the extension of any



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        interest payment period on the Debentures or any extension of the
        maturity date of the Debentures permitted by the Indenture);

               (c) any failure, omission, delay or lack of diligence on the part
        of the Holders to enforce, assert or exercise any right, privilege,
        power or remedy conferred on the Holders pursuant to the terms of the
        Common Securities, or any action on the part of the Issuer granting
        indulgence or extension of any kind;

               (d) the voluntary or involuntary liquidation, dissolution, sale
        of any collateral, receivership, insolvency, bankruptcy, assignment for
        the benefit of creditors, reorganization, arrangement, composition or
        readjustment of debt of, or other similar proceedings affecting, the
        Issuer or any of the assets of the Issuer;

               (e) any invalidity of, or defect or deficiency in, the Common
        Securities;

               (f) the settlement or compromise of any obligation guaranteed
        hereby or hereby incurred; or

               (g) any other circumstance whatsoever that might otherwise
        constitute a legal or equitable discharge or defense of a guarantor, it
        being the intent of this Section 5.3 that the obligations of the
        Guarantor hereunder shall be absolute and unconditional under any and
        all circumstances.

               There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 2.4 Rights of Holders

               Any Holder of Common Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Common
Securities Guarantee. The Guarantor waives any right or remedy to require that
any such action be brought first against the Issuer or any other Person before
so proceeding directly against the Guarantor.

SECTION 2.5 Guarantee of Payment

               This Common Securities Guarantee creates a guarantee of payment
and not of collection.

SECTION 2.6 Subrogation

               The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, after giving effect to any such payment, any amounts
are due and unpaid under this Common


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Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.

SECTION 2.7 Independent Obligations

               The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.

                                  ARTICLE III
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1 Limitation of Transactions

               So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, (ii) there shall have occurred and be continuing an Event
of Default or an event of default under the Declaration, or (iii) the Guarantor
shall have selected an Extension Period as provided in the Declaration and such
period, or any extension thereof, shall be continuing, then (a) the Guarantor
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Guarantor's capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of the Guarantor's capital
stock or rights to acquire such capital stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or rights to acquire such capital stock or the exchange or conversion of one
class or series of the Guarantor's capital stock or rights to acquire such
capital stock for another class or series of the Guarantor's capital stock, or
rights to acquire any such stock, (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged;
(iv) dividends or distributions made on the Guarantor's capital stock or rights
to acquire such capital stock, in each case with the Guarantor's capital stock
or rights to acquire such capital stock; or (v) make any guarantee payments
(other than payments under the Capital Securities Guarantee) with respect to the
foregoing and (b) the Guarantor shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Guarantor which rank pari passu with or junior to the
Debentures.

SECTION 3.2 Ranking

               This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined in the
Indenture) of the Guarantor. By their acceptance thereof, each Holder of Common
Securities agrees to the foregoing provisions of this Common Securities
Guarantee and the other terms set forth herein.



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               Because the Guarantor is a holding company, the right of the
Guarantor to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent to the extent
the Guarantor may itself be recognized as a creditor of that subsidiary.
Accordingly, the Guarantor's obligations under the Guarantee will be effectively
subordinated to all existing and future liabilities of the Guarantor's
subsidiaries, and claimants should look only to the assets of the Guarantor for
payments thereunder. The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Guarantor, including Senior Indebtedness
of the Guarantor, under any indenture that the Guarantor may enter into in the
future or otherwise.

               If a Declaration Event of Default has occurred and is continuing,
the rights of holders of the Common Securities of the Issuer to receive
Guarantee Payments are subordinated to the rights of holders of Capital
Securities to receive Capital Guarantee Payments, with the result that no
Guarantee Payments shall be made unless payment in full in cash of all
accumulated and unpaid Capital Guarantee Payments on all outstanding Capital
Securities shall have been made or provided for, and all funds immediately
available to the Institutional Trustee shall first be applied to the payment in
full in cash of all such Capital Guarantee Payments then due and payable.


                                   ARTICLE IV
                                  TERMINATION

SECTION 4.1 Termination

               This Common Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price of all Common Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Common Securities or
(iii) upon full payment of the amounts payable in accordance with the
Declaration upon dissolution of the Issuer. Notwithstanding the foregoing, this
Common Securities Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder of Common Securities must restore
payment of any sums paid under the Common Securities or under this Common
Securities Guarantee.

                                   ARTICLE V
                                 MISCELLANEOUS

SECTION 5.1 Successors and Assigns

               All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding. Except in connection with any merger
or consolidation of the Guarantor with or into another entity or any sale,
transfer or lease of the Guarantor's assets to another entity, in each case, to
the extent permitted under the Indenture, the Guarantor may not assign its
rights or delegate its obligations under this Common Securities Guarantee
without the prior approval of the Holders of at least a Majority in liquidation
amount of the Common Securities.



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SECTION 5.2 Amendments

               Except with respect to any changes that do not adversely affect
the rights of Holders of Common Securities in any material respect (in which
case no consent of Holders will be required), this Common Securities Guarantee
may only be amended with the prior approval of the Holders of at least a
Majority in liquidation amount of the Common Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

SECTION 5.3 Notices

               All notices provided for in this Common Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered against written receipt, telecopied, mailed by first class mail or
delivered by a nationally recognized overnight courier service, as follows:

               (a) If given to the Guarantor, at the Guarantor's mailing address
        set forth below (or such other address as the Guarantor may give notice
        of to the Holders of the Common Securities):

                      PXRE Corporation
                      399 Thornall Street
                      Fourteenth Floor
                      Edison, NJ  08837
                      Attention:  Treasurer
                      Telecopy:  (908) 906-9157

               with a copy to:

                      Morgan, Lewis & Bockius LLP
                      101 Park Avenue
                      New York, NY  10178-0060
                      Attention:  F. Sedgwick Browne
                      Telecopy:  (212) 309-6273

               (b) If given to any Holder of Common Securities, at the address
        set forth on the books and records of the Issuer.

               All such notices shall be deemed to have been given when received
in person, against written receipt, telecopied with receipt confirmed, or five
days after mailing by first class mail, postage prepaid except that if a notice
or other document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or inability
to deliver.

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SECTION 5.4 Benefit

               This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.

SECTION 5.5 Governing Law

               THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.



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               THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.




                                              PXRE CORPORATION,
                                                  as Guarantor


                                              By; /s/ Gerald L. Radke
                                                 -------------------------------
                                                  Name: Gerald L. Radke
                                                  Title: President

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