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                                PXRE CORPORATION

                     (FORMERLY NAMED PHOENIX RE CORPORATION)

                                       AND

                      STATE STREET BANK AND TRUST COMPANY,
                              AS SUCCESSOR TRUSTEE

                                    ---------


                             SUPPLEMENTAL INDENTURE

                          Dated as of January 24, 1997

                                   ----------

                                       to

                    the Indenture dated as of August 31, 1993
                         between Phoenix Re Corporation
                        (now named PXRE Corporation) and
                      State Street Bank and Trust Company,
                             as successor Trustee to
           The First National Bank of Boston, as Trustee, relating to
                 $75 million Original Aggregate Principal Amount
                         of 9 3/4% Senior Notes due 2003


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                             SUPPLEMENTAL INDENTURE

               THIS SUPPLEMENTAL INDENTURE (the "Supplemental Indenture") is
made as of the 24th day of January, 1997, between PXRE CORPORATION (formerly
named Phoenix Re Corporation) (the "Company") and STATE STREET BANK AND TRUST
COMPANY, as successor Trustee (the "Trustee").

                              W I T N E S S E T H:

               WHEREAS, the Company and The First National Bank of Boston, as
Trustee, heretofore executed and delivered an Indenture, dated as of August 31,
1993 (the "Indenture"); and

               WHEREAS,  the Trustee has  succeeded  The First  National Bank of
Boston, as Trustee; and

               WHEREAS, pursuant to the Indenture, the Company issued and the
Trustee authenticated and delivered $75 million aggregate principal amount of
the Company's 9 3/4% Senior Notes due 2003 (the "Notes"); and

               WHEREAS, Section 9.2 of the Indenture provides that with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes at the time outstanding (the "Requisite Consents"), the Company,
when authorized by a resolution of its Board of Directors, and the Trustee may
enter into an amended or supplemental Indenture; and

               WHEREAS, the Company has obtained the Requisite Consents to amend
the Indenture in certain respects; and

               WHEREAS, this Supplemental Indenture has been duly authorized by
all necessary corporate action on the part of the Company;

               NOW, THEREFORE, the Company and the Trustee agree as follows for
the equal and ratable benefit of the Holders of the Notes:

                                    ARTICLE 1
                AMENDMENTS TO CERTAIN PROVISIONS OF THE INDENTURE

               SECTION 1.01 AMENDMENT OF CERTAIN SECTIONS OF THE INDENTURE.
Subject to Section 2.01 hereof, the Indenture is hereby amended by adding
thereto the following in Section 4.23:

               "SECTION 4.23  1997 Securities Offering.

               Notwithstanding any covenant or other provision to the contrary
contained in this Indenture, for purposes hereof, the following provisions shall
apply in relation to the issuance by PXRE Capital Trust I, a statutory business
trust created under the laws of the State of Delaware and controlled by the
Company (the "Trust"), of up to $100,000,000 liquidation amount of Capital Trust
Pass-through Securities'sm' (TRUPS'sm') and related transactions, as further
described in the Company's Consent Solicitation Statement dated January 17, 1997
(the "Solicitation Statement"), a copy of which is on file with the Trustee
(terms defined in the Solicitation Statement being used herein as so defined);
provided, that the Trust engages in no activities other than issuing the Trust
Securities, applying the proceeds thereof to purchase an equal principal amount
of the





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Subordinated Debentures and engaging in those other activities necessary or
incidental thereto, which may include participating in the Exchange Offer:

               (a) The Capital Securities shall be deemed to be debt securities
(and not Preferred Stock) with terms and provisions identical to the
Subordinated Debentures. Without limiting the generality of the foregoing, this
paragraph (a) shall have the effect that (i) so long as the Company holds all
the outstanding Common Securities and no other Capital Stock of the Trust is
outstanding, the Trust shall be a Wholly Owned Subsidiary of the Company, (ii)
periodic distributions on the Capital Securities shall be deemed to be interest
and not dividends and shall be included in Consolidated Interest Expense of the
Company, and (iii) redemption of the Capital Securities at maturity of the
Subordinated Debentures will not constitute a Restricted Payment.

               (b) The Indebtedness represented by the Capital Securities shall
be deemed to be Indebtedness permitted to be incurred under Section 4.9;
provided, that (A) no Default or Event of Default shall have occurred and be
continuing at the time of the proposed incurrence thereof or shall occur as a
result of such proposed incurrence, and (B) after giving effect to such proposed
incurrence the Company's Consolidated Fixed Charge Coverage Ratio would be
greater than 2.0 to 1.0.

               (c) A redemption of the Subordinated Debentures and the Trust
Securities upon a Tax Event or an Investment Company Event will not constitute a
Restricted Payment; provided, that such redemptions either (a) occur on or prior
to December 31, 1997, or (b) the Company, upon completion of such redemptions,
would be able to incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under paragraph (a) of Section 4.8.

               (d) Neither a Tax Event Maturity Advancement nor a payment of the
Subordinated Debentures and redemption of the Capital Securities at the advanced
maturity of the Subordinated Debentures effected thereby shall be deemed to
involve a Restricted Payment or otherwise be restricted by the Indenture.

               (e) A redemption of the Offered Securities in exchange for the
Exchange Securities pursuant to the Exchange Offer shall not be deemed to
involve a Restricted Payment or otherwise be restricted by the Indenture.

               (f) A redemption of the Trust Securities by distribution of the
Subordinated Debentures to the holders of the Trust Securities upon a
termination of the Trust shall not constitute a Restricted Payment or an
incurrence of Indebtedness by the Company.

               (g) The incurrence by the Company of obligations under the
Guarantees and its obligations to pay the costs, expenses, debts and other
obligations of the Trust (other than with respect to the Trust Securities), to
the extent constituting Indebtedness for purposes of the Indenture, will be
considered as part of (but not increasing the amount of) the Indebtedness
represented by the Capital Securities.

               (h) Section 4.15 shall not be violated by the terms of the
Declaration, which terms provide that during the continuance of a Declaration
Event of Default the rights of the Company as a holder of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
Capital Securities."

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                                    ARTICLE 2
                                  MISCELLANEOUS

               SECTION 2.01 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution
and delivery of this Supplemental Indenture by the Company and the Trustee, the
Indenture shall be supplemented in accordance herewith, and this Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder
of Securities heretofore or hereafter authenticated and delivered under the
Indenture shall be bound thereby.

               SECTION 2.02 INDENTURE REMAINS IN FULL FORCE AND EFFECT. Except
as supplemented hereby, all provisions in the Indenture shall remain in full
force and effect.

               SECTION 2.03 INDENTURE AND SUPPLEMENTAL INDENTURE CONSTRUED
TOGETHER. This Supplemental Indenture is an indenture supplemental to and in
implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.

               SECTION 2.04 CONFIRMATION AND PRESERVATION OF INDENTURE. The
Indenture as supplemented by this Supplemental Indenture is in all respects
confirmed and preserved.

               SECTION 2.05 CONFLICT WITH TRUST INDENTURE ACT. If any provision
of this Supplemental Indenture limits, qualifies or conflicts with any provision
of the TIA that is required under the TIA to be part of and govern any provision
of this Supplemental Indenture, the provision of the TIA shall control. If any
provision of this Supplemental Indenture modifies or excludes any provision of
the TIA that may be so modified or excluded, the provision of the TIA shall be
deemed to apply to the Indenture as so modified or to be excluded by this
Supplemental Indenture, as the case may be.

               SECTION 2.06 SEVERABILITY. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

               SECTION 2.07 TERMS DEFINED IN THE INDENTURE. All capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Indenture.

               SECTION 2.08 HEADINGS. The Article and Section headings of this
Supplemental Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Supplemental Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.

               SECTION 2.09 BENEFITS OF SUPPLEMENTAL INDENTURE, ETC. Nothing in
this Supplemental Indenture or the Notes, express or implied, shall give to any
Person, other than the parties hereto and thereto and their successors hereunder
and thereunder and the Holders of the Notes, any benefit of any legal or
equitable right, remedy or claim under the Indenture, this Supplemental
Indenture or the Notes.

               SECTION 2.10 SUCCESSORS. All agreements of the Company in this
Supplemental Indenture shall bind its successors. All agreements of the Trustee
in this Supplemental Indenture shall bind its successors.

                                       -3-



 


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               SECTION 2.11 TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
contained herein shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness.

               SECTION 2.12 CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.
In entering into this Supplemental Indenture, the Trustee shall be entitled to
the benefit of every provision of the Indenture relating to the conduct or
affecting the liability or affording protection to the Trustee, whether or not
elsewhere herein so provided.

               SECTION 2.13 GOVERNING LAW. The internal law of the State of New
York shall govern and be used to construe this Supplemental Indenture.

               SECTION 2.14 COUNTERPART ORIGINALS. The parties may sign any
number of copies of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.

               IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date and year first above
written.

                                  PXRE CORPORATION



                                  By:  /s/ Gerald L. Radke
                                      ------------------------------------
                                       Name:  Gerald L. Radke
                                       Title: Chairman of the Board, President
                                               and Chief Executive Officer

                                  STATE STREET BANK AND TRUST COMPANY, as
                                  successor Trustee



                                  By:  /s/ Ruth A. Smith
                                      ------------------------------------
                                       Name:  Ruth A. Smith
                                       Title: Vice President






                                       -4-

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