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                              PXRE CAPITAL TRUST I
      $100,000,000 8.85% Capital Trust Pass-through Securities`sm' (TruPS)`sm'

            FULLY AND UNCONDITIONALLY GUARANTEED AS TO DISTRIBUTIONS
                              AND OTHER PAYMENTS BY
                                PXRE CORPORATION

                               PURCHASE AGREEMENT

                                                        New York, New York
                                                        January 24, 1997


Salomon Brothers Inc
As Representative of the Initial Purchasers
Seven World Trade Center
New York, New York 10048


Ladies and Gentlemen:

                   PXRE Corporation, a Delaware corporation (the "Company"), and
 PXRE Capital Trust I, a Delaware statutory business trust (the "Trust"),
 propose to sell to the parties named in Schedule I hereto (the "Initial
 Purchasers"), for whom you (the "Representative") are acting as representative,
 8.85% Capital Trust Pass-through Securities of the Trust, having a stated
 liquidation amount of $1,000 per capital security (the "Capital Securities").

                   The Capital Securities will be fully and unconditionally
 guaranteed by the Company with respect to distributions and amounts payable
 upon liquidation, redemption or repayment (the "Capital Securities Guarantee")
 pursuant to the Capital Securities Guarantee Agreement (the "Capital Securities
 Guarantee Agreement") to be dated as of the Closing Date specified in Section 3
 hereof and executed and delivered by the Company and First Union National Bank,
 as trustee (the "Guarantee Trustee"), for the benefit of the holders from time
 to time of the Capital Securities. The entire proceeds from the sale of the
 Capital Securities will be combined with the entire proceeds from the sale by
 the Trust to the Company of its common securities (the "Common Securities"),
 and will be used by the Trust to purchase $103,093,000 principal amount of the
 8.85% Junior Subordinated Deferrable Interest Debentures due 2027 of the
 Company (the "Subordinated Debt Securities"). The Capital Securities and the
 Common Securities will be issued pursuant to the amended and restated
 declaration of trust (the "Declaration"), to be dated as of the Closing Date,
 among the Company, as sponsor, the Administrators named therein (the
 "Administrators"), First Union Bank of Delaware (the "Delaware Trustee"), First
 Union National Bank (the "Institutional Trustee"), and the holders




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 from time to time of undivided beneficial interests in the assets of the Trust.
 The Common Securities will be fully and unconditionally guaranteed by the
 Company with respect to distributions and amounts payable upon liquidation,
 redemption or repayment (the "Common Securities Guarantee" and, together with
 the Capital Securities Guarantee, the "Guarantees") pursuant to the Common
 Securities Guarantee Agreement, to be dated as of the Closing Date (the "Common
 Securities Guarantee Agreement" and, together with the Capital Securities
 Guarantee Agreement, the "Guarantee Agreements"), executed and delivered by
 the Company for the benefit of the holders from time to time of the Common
 Securities of the Trust. The Subordinated Debt Securities will be issued
 pursuant to an Indenture, to be dated as of the Closing Date, as supplemented
 by the First Supplemental Indenture, to be dated as of the Closing Date (the
 "Indenture"), between the Company and First Union National Bank, as trustee
 (the "Indenture Trustee").

                   The Capital Securities, the Capital Securities Guarantee and
 the Subordinated Debt Securities are collectively referred to herein as the
 "Securities." This Agreement, the Indenture, the Declaration, the Guarantee
 Agreements, the Securities and the Registration Rights Agreement (as defined
 below) are referred to collectively as the "Operative Documents." Capitalized
 terms used herein without definition have the respective meanings specified in
 the Final Memorandum (as defined below).


                   The sale of the Capital Securities to the Initial Purchasers
 will be made without registration of any of the Securities under the Securities
 Act of 1933, as amended (the "Securities Act"), in reliance upon exemptions
 from the registration requirements of the Securities Act. You have advised the
 Company that the Initial Purchasers will offer and sell the Capital Securities
 purchased by them hereunder in accordance with Section 4 hereof as soon as you
 deem advisable. The Company, the Trust and the Initial Purchasers have entered
 into a Registration Rights Agreement dated the date hereof (the "Registration
 Rights Agreement") with respect to the Securities. If you are the only Initial
 Purchaser, all references herein to the Representative shall be deemed to be to
 the Initial Purchaser.

                   In connection with the sale of the Capital Securities, the
 Company and the Trust have prepared a preliminary offering memorandum, dated
 January 21, 1997 (including any and all exhibits thereto and any information
 incorporated by reference therein, the "Preliminary Memorandum"), and a final
 offering memorandum, dated January 24, 1997 (including any and all exhibits
 thereto and any information incorporated by reference therein, the "Final
 Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
 forth certain information concerning the Company, the Trust and the Securities.
 Each of the Company and the Trust hereby confirms that it has authorized the
 use of the Preliminary Memorandum and the Final Memorandum, and any amendment
 or supplement thereto, in connection with the offer and sale of the Securities
 by the Initial Purchasers. Unless stated to the contrary, all references herein
 to the Final Memorandum are to the Final Memorandum at the Execution Time (as
 defined below) and are not meant to include any amendment or supplement, or any
 information incorporated by reference therein, subsequent to the Execution Time
 and anyreferences herein to the terms "amend", "amendment" or "supplement" with
 respect to the Final Memorandum shall be deemed to refer to and include any
 information filed under the Securities Exchange Act of

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1934, as amended (the "Exchange Act"), subsequent to the Execution Time which
is incorporated by reference therein.

               1. Representations and Warranties.  The Company and the Trust
jointly and severally represent and warrant to, and agree with, each Initial
Purchaser as set forth below in this Section 1.
 
               (a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the date
hereof, does not and at the Closing Date (as defined below) will not (and any
amendment or supplement thereto, at the date thereof and at the Closing Date,
will not), contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company and the Trust make no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or the Final
Memorandum, or any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Initial Purchasers through the Representative specifically for inclusion
therein.
 
               (b) Neither the Company nor the Trust, nor any of their
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act.

               (c) Neither the Company nor the Trust, nor any of their
Affiliates, nor any person acting on its or their behalf has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of any of the Securities.

               (d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.

               (e) Neither the Company nor the Trust is an "investment company"
or an entity "controlled" by an "investment company," in each case within the
meaning of Section 3(a) of the Investment Company Act of 1940, as amended (the
"Investment Company Act").

               (f) The Company is subject to and in full compliance, in all
material respects, with the reporting requirements of Section 13 or Section
15(d) of the Exchange Act.

               (g) Neither the Company nor the Trust has paid or agreed to pay
to any person any compensation for soliciting another to purchase any of the
Securities (except as contemplated by this Agreement).

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               (h) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. 3801, et seq. (the "Business Trust Act") with the power and authority to own
property and to conduct its business as described in the Final Memorandum and to
enter into and perform its obligations under the Operative Documents. The Trust
is duly qualified to transact business as a foreign entity and is in good
standing in each jurisdiction in which such qualification is necessary, except
where the failure to so qualify or be in good standing would not have a material
adverse effect on the Trust. The Trust is not a party to or otherwise bound by
any agreement other than the Operative Documents. The Trust is and will, under
current law, be classified for federal income tax purposes as a grantor trust
and not as an association taxable as a corporation.


               (i) The Declaration has been duly authorized by the Company and,
on the Closing Date, will have been duly executed and delivered by the Company
and the Administrators, and, assuming due authorization, execution and delivery
by the Delaware Trustee and the Institutional Trustee, will be a valid and
binding obligation of the Company and such Administrators, enforceable against
them in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity ("Bankruptcy and Equity"). Each of
the Administrators is an employee of the Company and has been duly authorized by
the Company to execute and deliver the Declaration.

               (j) Each of the Guarantee Agreements and the Indenture has been
duly authorized by the Company and, on the Closing Date will have been duly
executed and delivered by the Company, and, assuming due authorization,
execution and delivery by the Guarantee Trustee, in the case of the Capital
Securities Guarantee, and by the Indenture Trustee, in the case of the
Indenture, will be a valid and binding obligation of the Company enforceable
against it in accordance with its terms, subject to Bankruptcy and Equity.

               (k) The Capital Securities and the Common Securities have been
duly authorized by the Declaration and, when issued and delivered against
payment therefor on the Closing Date to the Initial Purchasers, in the case of
the Capital Securities, and to the Company, in the case of the Common
Securities, will be validly issued and represent undivided beneficial interests
in the assets of the Trust. The issuance of neither the Capital Securities nor
the Common Securities is subject to preemptive or other similar rights. On the
Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance.

               (l) The Subordinated Debt Securities have been duly authorized by
the Company and, at the Closing Date, will have been duly executed and delivered
to the Indenture Trustee for authentication in accordance with the Indenture,
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor by the Trust as described in the Final
Memorandum, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture enforceable against the Company in
accordance with their terms, subject to Bankruptcy and Equity.

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               (m) This Purchase Agreement and the Registration Rights Agreement
have been duly executed and delivered by the Company and the Trust.

               (n) The Operative Documents will on the Closing Date conform in
all material respects to the descriptions thereof contained in the Final
Memorandum.

               (o) The Trust is not in violation of the Declaration or any
provision of the Business Trust Act. The execution, delivery and performance of
the Operative Documents to which it is a party by the Company or the Trust, and
the consummation of the transactions contemplated herein or therein, will not
conflict with or constitute a breach of, or a default under, or result in the
creation or imposition of any lien, charge or other encumbrance upon any
property or assets of the Trust, the Company or any of the Company's
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Trust, the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of any of them is subject, except for a conflict,
breach, default, lien, charge or encumbrance which could not reasonably be
expected to have an adverse effect on the consummation of the transactions
contemplated herein or therein, nor will such action result in any violation of
the Declaration or the Business Trust Act or require the consent, approval,
authorization or order of any court or governmental agency or body.

               (p) The information contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 under the captions
"Regulation" and "Pending Legal Proceedings" fairly summarizes in all material
respects the matters therein described.

               2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, (a) the
Company and the Trust jointly and severally agree to sell to each Initial
Purchaser, and each Initial Purchaser agrees, severally and not jointly, to
purchase from the Company and the Trust, Capital Securities with an aggregate
stated liquidation amount in the amount set forth opposite that Initial
Purchaser's name on Schedule I hereto at a purchase price equal to 99.509% of
the stated liquidation amount thereof. As compensation to the Initial Purchasers
for their commitments hereunder and in view of the fact that the proceeds from
the sale of the Capital Securities will be used to purchase Subordinated Debt
Securities of the Company, the Company will pay, on the Closing Date
concurrently with the purchases and sales pursuant to the preceding sentence, to
the Representative, for the accounts of the Initial Purchasers, a commission per
Capital Security equal to 1.0% of the stated liquidation amount thereof. Any
payment pursuant to this Section 2 shall be made by wire transfer in immediately
available funds to the U.S. account designated in writing by the party entitled
to receive such payment.

               3. Delivery and Payment. Delivery of and payment for the Capital
Securities shall be made at 10:00 AM, New York City time, on January 29, 1997,
or such later date (not later than February 5, 1997) as the Representative shall
designate, which date and time may be postponed by agreement between the
Representative, on the one hand, and the Company and the Trust, on the other
hand, or as provided in Section 10 hereof (such date and time of delivery and
payment for the Capital Securities being herein called the "Closing Date").

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               Delivery of the Capital Securities shall be made at such
location, and in such names and denominations, as the Representative shall
designate at least one business day in advance of the Closing Date. The Company
and the Trust agree to have the Capital Securities available for inspection and
checking by the Representative in New York, New York, not later than 1:00 PM on
the business day prior to the Closing Date. The closing for the purchase and
sale of the Capital Securities shall occur at the offices of Cleary, Gottlieb,
Steen & Hamilton, One Liberty Plaza, New York, New York 10006.

               4. Offering by Initial Purchasers. It is understood that the
Initial Purchasers propose to offer the Capital Securities for sale as set forth
in the Final Memorandum. Each Initial Purchaser, severally and not jointly,
represents and warrants to and agrees with the Company and the Trust that:

               (a) It has not offered or sold, and will not offer or sell, any
of the Securities except (i) to those it reasonably believes to be QIBs or
qualified institutional buyers (as defined in Rule 144A under the Securities
Act) and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of any Capital Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D) who provide to it and to the Company a letter in the form
of Exhibit A hereto.

               (b) Neither it nor any person acting on its behalf has made or
will make offers or sales of any of the Securities by means of any form of
general solicitation or general advertising (within the meaning of Regulation
D).

               5. Agreements. The Company and the Trust agree with each Initial
Purchaser that:

               (a) The Company and the Trust will furnish to each Initial
Purchaser and to counsel for the Initial Purchasers, without charge, during the
period referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may reasonably
request. The Company will pay the expenses of printing or other production of
all documents relating to the offering.

               (b) Neither the Company nor the Trust will amend or supplement
the Final Memorandum, other than by filing documents under the Exchange Act
which are incorporated by reference therein, without the prior written consent
of the Representative, which will not be unreasonably withheld; provided,
however, that, prior to the completion of the distribution of the Capital
Securities by the Initial Purchasers (as determined by the Initial Purchasers on
advice of counsel), neither the Company nor the Trust will file any document
under the Exchange Act which is incorporated by reference in the Final
Memorandum unless, prior to such proposed filing, the Company or the Trust has
furnished the Representative with a copy of such document for its review and the
Representative has not reasonably objected to the filing of such document,
except that the Company can file any such document under the Exchange Act which
counsel to the Company shall advise the Company in writing is required in order
to comply with applicable

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law. The Company and the Trust will promptly advise the Representative and
provide a copy to the Representative when any document filed under the Exchange
Act which is incorporated by reference in the Final Memorandum shall have been
filed with the Securities and Exchange Commission (the "Commission").

               (c) If at any time prior to the completion of the distribution of
the Capital Securities by the Initial Purchasers (as determined by the
Representative on advice of counsel), any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it should be necessary to amend or supplement
the Final Memorandum to comply with applicable law, the Company and the Trust
will promptly notify the Representative of the same and, subject to the
requirements of paragraph (b) of this Section 5, will prepare and provide to the
Representative pursuant to paragraph (a) of this Section 5 an amendment or
supplement which will correct such statement or omission or effect such
compliance.

               (d) The Company and the Trust will use its best efforts to
arrange for the qualification of the Capital Securities for sale by the Initial
Purchasers under the laws of such jurisdictions as the Initial Purchasers may
reasonably designate and will maintain such qualifications in effect so long as
required for the sale of the Capital Securities; provided, however, that neither
the Company nor the Trust shall be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where they would
not otherwise be required to qualify but for this Section 5(d); (ii) file any
general consent to service of process; or (iii) subject themselves to taxation
in any jurisdiction if they are not already so subject. The Company or the
Trust, as the case may be, will promptly advise the Representative of the
receipt by the Company or the Trust, as the case may be, of any notification
with respect to the suspension of the qualification of the Capital Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.

               (e) Neither the Company nor the Trust will, nor will either of
them permit any of its Affiliates to, resell any Capital Securities that have
been acquired by either of them.

               (f) Neither the Company nor the Trust will, nor will either of
them permit any of its Affiliates, nor any person acting on its or their behalf,
to, directly or indirectly, make offers or sales of any security, or solicit
offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act.

               (g) Neither the Company nor the Trust will, nor will either of
them permit any of its Affiliates, nor any person acting on its or their behalf,
to, engage in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale of any of the
Securities.

               (h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Company and the Trust will, during any period in which it is not subject to and
in compliance with Section 13 or 15(d) of the

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Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities. The information
provided by the Company and the Trust pursuant to this Section 5(h) will not, at
the date thereof, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

               (i) The Company and the Trust will cooperate with the
Representative and use their best efforts to permit the Capital Securities to be
eligible for clearance and settlement through The Depository Trust Company.

               (j) Neither the Company nor the Trust will, until 90 days
following the Closing Date, without the prior written consent of the
Representative, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly, (i) any trust certificates or
other securities of the Trust other than the sale of the Common Securities to
the Company or the sale of the Capital Securities to the Initial Purchasers as
contemplated by this Agreement, (ii) any securities that are substantially
similar to the Securities or (iii) any other securities convertible into, or
exercisable or exchangeable for, any of (i) or (ii), or enter into an agreement,
or announce an intention, to do any of the foregoing.

               6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Capital Securities shall
be subject to theaccuracy of the representations and warranties on the part of
the Company and the Trust contained herein as of the date and time that this
Agreement is executed (the "Execution Time") and the Closing Date, to the
accuracy of the statements of the Company and the Trust made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Trust of their obligations hereunder and to the following additional conditions:

               (a) The Company shall have furnished to the Representative the
opinion of Morgan, Lewis & Bockius LLP, counsel to the Company, dated the
Closing Date, addressed to the Initial Purchasers to the effect that:




                                             
                       (i) each of the Company and PXRE Reinsurance Company and
           Transnational Reinsurance Company (individually, a "Subsidiary" and
           collectively, the "Subsidiaries") has been duly incorporated and is
           validly existing as a corporation in good standing under the laws of
           the jurisdiction in which it is chartered or organized, with full
           corporate power and authority to own its properties and conduct its
           business as described in the Final Memorandum; and the Company is
           duly qualified to do business as a foreign corporation and is in good
           standing under the laws of the States of New Jersey and New York,
           which are the only jurisdictions in which the Company owns or leases
           any material real properties or conducts any material business and
           which requires such

                                       8





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           qualifications and in which the failure to be so qualified would have
           a material adverse effect on the business or condition (financial or
           otherwise) of the Company and its subsidiaries taken as a whole; and
           PXRE Reinsurance Company is duly licensed and in good standing under
           the insurance laws of the States of Connecticut, New York and New
           Jersey, and Transnational Reinsurance Company is duly licensed and in
           good standing under the insurance laws of the States of Connecticut
           and New Jersey.

                       (ii) all the outstanding shares of capital stock of each
           Subsidiary have been duly and validly authorized and issued and are
           fully paid and nonassessable, and, except as otherwise set forth in
           the Final Memorandum and based solely on a review of the stock books
           of each of such Subsidiaries, as identified to such counsel as being
           true and correct by the Company, and on a certificate of an executive
           officer of the Company, and without any further independent
           verification, all outstanding shares of capital stock of the
           Subsidiaries are owned by the Company either directly or through
           wholly owned subsidiaries free and clear of any pledge, security
           interest, claim, lien or other encumbrance (other than covenants
           under the Indenture dated as of August 31, 1993 (the "Senior Note
           Indenture") between the Company and State Street Bank and Trust
           Company (as Successor Trustee to The First National Bank of Boston),
           as Successor Trustee (the "Senior Note Trustee") relating to the
           Company's 9-3/4% Senior Notes due 2003 (the "Senior Notes")); and
           based solely on a review of the stock book of the Trust, as
           identified to such counsel as being true and correct by the
           Administrators, and a certificate of an executive officer of the
           Company, and without any further independent verification, all issued
           and outstanding Common Securities of the Trust are owned by the
           Company either directly or through wholly owned subsidiaries free and
           clear of any pledge, security interest, claim, lien or other
           encumbrance (other than covenants under the Senior Note Indenture);

                       (iii) each of the Indenture and the Guarantee Agreements
           has been duly authorized, executed and delivered by the Company, and
           (in the case of the Indenture and the Capital Securities Guarantee,
           respectively, assuming it is duly authorized, executed and delivered
           by the Indenture Trustee and the Guarantee Trustee, respectively)
           constitutes a legal, valid and binding instrument of the Company
           enforceable against the Company in accordance with its terms, subject
           to Bankruptcy and Equity; the Subordinated Debt Securities have been
           duly and validly authorized and delivered to the Indenture Trustee
           for authentication in accordance with the Indenture, and when
           authenticated by the Indenture Trustee in accordance with the
           provisions of the Indenture and delivered to and paid for by the
           Trust, will constitute legal, valid and binding obligations of the
           Company entitled to the benefits of the Indenture and enforceable
           against the Company in accordance with its terms, subject to
           Bankruptcy and Equity;

                       (iv) this Purchase Agreement and the Registration Rights
           Agreement have been duly authorized, executed and delivered by the
           Company;
 
                       (v) the Declaration has been duly authorized, executed
           and delivered by the Company and the Administrators;

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                       (vi) to the knowledge of such counsel, no consent,
           approval, authorization or order of any court or governmental agency
           or body is required for the consummation of the transactions
           contemplated herein or in the Operative Documents, in connection with
           the purchase and sale of the Capital Securities by the Initial
           Purchasers or the purchase of the Subordinated Debt Securities by the
           Trust and such other approvals (specified in such opinion) as have
           been obtained, except (i) such as may be required by the securities,
           insurance securities or Blue Sky laws of the various states in
           connection with the offer and sale of the Securities, (ii) such as
           may be required by the Securities Act and the securities, insurance
           securities or Blue Sky laws of the various states in connection with
           an exchange offer for, or registration of, the Securities pursuant to
           the Registration Rights Agreement and (iii) such as may be required
           as a result of any facts or circumstances relating solely to the
           Initial Purchasers;

                       (vii) neither the issue and sale of the Capital
           Securities or the Subordinated Debt Securities, the execution and
           delivery of the Operative Documents by the Company or the Trust and
           the consummation of any other of the transactions therein
           contemplated in any Operative Document nor the fulfillment of the
           terms thereof will conflict with, result in a breach or violation of,
           or constitute a default under the charter or by-laws of the Company
           or any of its Subsidiaries, the terms of any material indenture,
           mortgage, deed of trust, bank loan or credit agreement known to such
           counsel and to which the Company or any of its Subsidiaries is a
           party or bound or any judgment, order or decree of any court,
           regulatory body, administrative agency, governmental body or
           arbitrator having jurisdiction over the Company or any of its
           Subsidiaries known to such counsel, or any provision of applicable
           law known to such counsel to be applicable to the Company or any of
           its Subsidiaries, except for such conflicts, breaches, violations or
           defaults which are not, in the aggregate, material to the Company and
           its subsidiaries taken as a whole and which do not adversely affect
           the consummation of the transactions contemplated in this Agreement
           and the Operative Documents, except (i) required compliance with the
           securities, insurance securities or Blue Sky laws of the various
           states in connection with the offer and sale of the Securities; (ii)
           required compliance with the Securities Act and the securities,
           insurance securities or Blue Sky laws of the various states in
           connection with the exchange offer for, or registration of, the
           Securities pursuant to the Registration Rights Agreement, (iii) any
           rights to indemnity and contribution may be limited by federal and
           state securities laws and public policy considerations; and (iv) as
           may result from any facts or circumstances relating solely to the
           Initial Purchasers;

                       (viii) the statements in the Final Memorandum under the
           headings "Description of the Capital Securities," Description of the
           Guarantee" and "Description of the Subordinated Debt Securities",
           insofar as such statements purport to summarize certain provisions of
           the Operative Documents, provide a fair summary in all material
           respects of such provisions;

                       (ix) neither the Company nor the Trust is an "investment
           company" or an entity "controlled" by an "investment company," in
           each case within the meaning of

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           Section 3(a) of the Investment Company Act and the rules and
           regulations thereunder; and

                       (x) assuming the accuracy of the representations and
           warranties of the Company, the Trust and the Initial Purchasers and
           compliance with the agreements of the Company, the Trust and the
           Initial Purchasers contained herein, no registration of any of the
           Securities under the Securities Act is required for the offer and
           sale by the Initial Purchasers of the Capital Securities in the
           manner contemplated by this Agreement and the Indenture, the
           Declaration and the Capital Securities Guarantee are not required to
           be qualified under the Trust Indenture Act of 1939, it being
           understood that no opinion is expressed as to any subsequent resale
           of any Securities.
   
           Such counsel shall also state that they have no reason to believe
           that at the Execution Time the Final Memorandum (except for any
           financial statements and schedules and other statistical data, as
           to which such counsel need not express any belief) contained an
           untrue statement of a material fact or omitted to state a material
           fact necessary in order to make the statements therein, in the light
           of the circumstances under which they were made, not misleading or
           that the Final Memorandum (except for any financial statements and
           schedules and other statistical data, as to which such counsel need
           not express any belief) at the Closing Date contains an untrue
           statement of a material fact or omits to state a material fact
           necessary in order to make the statements therein, in the light of
           the circumstances under which they were made, not misleading; it
           being understood that counsel may state that their belief is based
           upon their participation in conferences with officers and
           representatives of the Company and the Representative, counsel for
           the Initial Purchasers, and representatives of the independent
           accountants of the Company at which the contents of the Final
           Memorandum (and any amendment or supplement thereto) and related
           matters were discussed, and that they are not passing upon, and do
           not assume any responsibility for, the accuracy, completeness or
           fairness of the statements contained in the Final Memorandum and have
           made no independent check or verification thereof, except for those
           made under subparagraph (viii) above and clause (B) of the
           penultimate paragraph of this subsection (a), insofar as they relate
           to legal matters or documents therein described.

           In addition, such counsel shall furnish to the Representative an
           opinion, dated the Closing Date (A) containing such assumptions,
           qualifications and limitations as shall be reasonably acceptable to
           the Representative and its counsel to the effect that (i) the Trust
           will be characterized as a grantor trust for U.S. federal income tax
           purposes and not as a partnership or as an association subject to tax
           as a corporation; and (ii) for U.S. federal income tax purposes the
           Subordinated Debt Securities will constitute indebtedness of the
           Company; and (B) to the effect that the statements made in the Final
           Memorandum under the captions "United States Federal Income Taxation"
           and "ERISA Considerations," insofar as they purport to describe the
           material United States Federal income tax consequences of the
           purchase, ownership and disposition of Subordinated Debt Securities
           and Capital Securities fairly summarize in all material respects
           the matters therein described.


                                       11





<PAGE>
<PAGE>

           In rendering such opinions, such counsel may (A) state that its
           opinion is limited to the laws of the State of New York, the
           corporate laws of the State of Delaware and the Federal laws of the
           United States and (B) rely as to matters involving the application of
           laws of any jurisdiction other than the States of New York and
           Delaware or the United States, to the extent deemed proper and
           specified in such opinion, upon the opinion of other counsel of good
           standing believed to be reliable and who are satisfactory to counsel
           for the Initial Purchasers and as to matters of fact, to the extent
           deemed proper, on certificates of responsible officers of the Company
           and public officials. References to the Final Memorandum in this
           paragraph (a) include any supplements thereto at the Closing Date.

               (b) The Representative shall have received the opinion of Potter
 Anderson & Corroon, special Delaware counsel for the Company and the Trust,
 dated the Closing Date, addressed to the Initial Purchaser to the effect that:
 

                       (i) the Trust has been duly created and is validly
           existing in good standing as a business trust under the Business
           Trust Act;

                       (ii) under the Business Trust Act and the Declaration,
           the Trust has the trust power and authority (A) to own its properties
           (including, without limitation, the Subordinated Debt Securities) and
           conduct its business, (B) to execute and deliver, and to perform its
           obligations under, each of the agreements to which it is a party, and
           (C) to issue and perform its obligations under the Capital Securities
           and Common Securities, all as described in the Declaration;

                       (iii) the Declaration constitutes a valid and binding
           obligation of the Company, the Delaware Trustee, the Institutional
           Trustee and the Administrators, enforceable against the Company, the
           Delaware Trustee, the Institutional Trustee and the Administrators,
           respectively, in accordance with its terms;

                       (iv) under the Business Trust Act and the Declaration,
           the execution and delivery by the Trust of each of the agreements to
           which it is a party, and the performance by the Trust of its
           obligations thereunder, have been duly authorized by all necessary
           action on the part of the Trust;
      
                       (v) the Capital Securities (A) have been duly authorized
           by the Declaration, and (B) will represent valid and fully paid and,
           subject to the qualifications set forth in number (viii) below,
           non-assessable undivided beneficial interests in the assets of the
           Trust;

                       (vi) once duly and validly issued in accordance with the
           Declaration, the Capital Securities will entitle the holders of
           Capital Securities to the benefits of the Declaration;

                                       12





<PAGE>
<PAGE>

 
                       (vii) the Common Securities (A) have been duly
           authorized by the Declaration, and (B) will represent valid and fully
           paid undivided beneficial interests in the assets of the Trust;
 
                       (viii) the holders of the Capital Securities, as
           beneficial owners of the Capital Securities, will be entitled to the
           same limitation of personal liability extended to stockholders of
           private corporations for profit organized under the General
           Corporation Law of the State of Delaware, except that the holders of
           the Capital Securities may be obligated to (A) provide indemnity
           and/or security in connection with and pay taxes or governmental
           charges arising from transfers or exchanges of certificates
           evidencing the Capital Securities and Common Securities and the
           issuance of replacement certificates evidencing the Capital
           Securities and Common Securities, (B) provide security or indemnity
           in connection with requests of or directions to the Institutional
           Trustee to exercise its rights and powers under the Declaration, and
           (C) provide indemnity in connection with violations of the
           Declaration or Federal or state securities laws arising from
           transfers or exchanges of certificates evidencing the Capital
           and Common Securities and the issuance of replacement
           certificates evidencing the Capital and Common Securities;

                       (ix) under the Business Trust Act and the Declaration,
           the issuance of the Capital Securities and Common Securities is not
           subject to preemptive rights;

                       (x) no authorization, approval or other action by, and
           no notice to or filing with, any governmental authority or regulatory
           body of the State of Delaware is required for the issuance and sale
           of the Capital Securities and Common Securities or the consummation
           by the Trust of the transactions contemplated by the agreements to
           which it is a party;
 
                       (xi) assuming that the Trust is treated as a grantor
           trust or partnership for Federal income tax purposes, the holders of
           the Capital Securities and Common Securities (other than those
           holders of the Capital Securities and Common Securities who reside or
           are domiciled in the State of Delaware) will have no liability for
           income taxes imposed by the State of Delaware solely as a result of
           their participation in the Trust, and the Trust will not be liable
           for any income tax imposed by the State of Delaware;
  
                       (xii) the (A) purchase of the Subordinated Debt
           Securities by the Trust, (B) the distribution of the Debentures by
           the Trust in the circumstances contemplated by the Declaration, and
           (C) the execution, delivery and performance by the Trust of each of
           the agreements to which it is a party and the consummation of the
           transactions contemplated thereunder, will not conflict with or
           result in a breach or violation of any of the terms or provisions of
           the Certificate of Trust or the Declaration or any statute, order,
           rule or regulation the State of Delaware or any governmental agency
           or body of the State of Delaware having jurisdiction over the Trust
           or any of its properties, or, based solely on a litigation search
           dated no earlier than the day immediately preceding the Closing Date,
           of court dockets for active cases in the Courts of Chancery, Courts
           of Common Pleas and

                                       13






<PAGE>
<PAGE>

           Superior Courts of the State of Delaware in and for Kent, Sussex and
           New Castle Counties, Delaware, and of the United States District
           Court sitting in the State of Delaware (the "Litigation Search"),
           any consent or order of any court; and


                       (xiii) based solely on the Litigation Search, there is no
           legal or governmental proceeding pending against the Trust.

               (c) The Representative shall have received the opinion of Riker,
 Danzig, Scherer, Hyland & Perretti, counsel for the Guarantee Trustee, the
 Institutional Trustee and the Indenture Trustee, dated the Closing Date, to the
 effect that:

                       (i) First Union National Bank is a national banking
           association with trust powers duly organized and validly existing in
           good standing as a banking corporation under the laws of the United
           States of America with all necessary power and authority to execute,
           deliver and carry out and perform its obligations under the terms of
           the Capital Securities Guarantee Agreement, the Declaration and the
           Indenture;

                       (ii) the execution, delivery and performance by First
           Union National Bank of the Capital Securities Guarantee Agreement,
           the Declaration and the Indenture have been duly authorized by all
           necessary corporate action on the part of First Union National Bank
           and each of the Capital Securities Guarantee Agreement, the
           Declaration and the Indenture has been duly executed and delivered by
           First Union National Bank, and constitutes the legal, valid and
           binding obligation of First Union National Bank, enforceable against
           First Union National Bank in accordance with its terms (subject to
           Bankruptcy and Equity);

                       (iii) the execution, delivery and performance of the
           Capital Securities Guarantee Agreement, the Declaration and the
           Indenture by First Union National Bank do not conflict with or
           constitute a breach of the charter or by-laws of First Union National
           Bank; and
                       (iv) to the best of such counsel's knowledge, no consent,
           approval or authorization of, or registration with or notice to, any
           governmental authority or agency of the State of New Jersey or the
           United States of America governing the banking or trust powers of
           First Union National Bank is required for the execution, delivery or
           performance by First Union National Bank of the Capital Securities
           Guarantee Agreement, the Declaration and the Indenture.

               (d) The Representative shall have received the opinion of Morris,
 James, Hitchens & Williams, counsel for the Delaware Trustee, to the effect
 that:

                       (i) the Delaware Trustee is a Delaware banking
           corporation with trust powers validly existing in good standing as a
           banking corporation under the laws of the State of Delaware, with all
           necessary power and authority to execute, deliver and perform its
           obligations under the Declaration;

                                       14






<PAGE>
<PAGE>

                       (ii) the execution, delivery and performance by the
           Delaware Trustee of the Declaration has been duly authorized by all
           necessary corporate action on the part of the Delaware Trustee and
           the Declaration has been duly executed and delivered by the Delaware
           Trustee;
                       (iii) the execution, delivery and performance of the
           Declaration by the Delaware Trustee do not conflict with or
           constitute a breach of the charter or by-laws of the Delaware
           Trustee; and

                       (iv) no consent, approval or authorization of, or
           registration with or notice to, any governmental authority or agency
           of the State of Delaware or the United States of America governing
           the banking or trust powers of the Delaware Trustee is required for
           the execution, delivery or performance by the Delaware Trustee of the
           Declaration.

               (e) The Representative shall have received from Cleary, Gottlieb,
 Steen & Hamilton, counsel for the Initial Purchasers, such opinion or opinions,
 dated the Closing Date, with respect to the issuance and sale of the Capital
 Securities, the Declaration, the Guarantee Agreements, the Indenture and the
 Final Memorandum (together with any supplement thereto) and other related
 matters as the Representative may reasonably require, and the Company and the
 Trust shall have furnished to such counsel such documents as they reasonably
 request for the purpose of enabling them to pass upon such matters.

               (f) The Company shall have furnished to the Representative a
 certificate of the Company, signed by the President and by the Chief Financial
 Officer of the Company, dated the Closing Date, to the effect that the signers
 of such certificate have carefully examined the Final Memorandum, any
 supplement to the Final Memorandum and this Agreement and that to their
 knowledge:
                       (i) the representations and warranties of the Company and
           the Trust in this Agreement are true and correct in all material
           respects on and as of the Closing Date with the same effect as if
           made on the Closing Date and the Company and the Trust have complied
           with all the agreements and satisfied all the conditions on either of
           their part to be performed or satisfied at or prior to the Closing
           Date; and

                       (ii) since the date of the most recent financial
           statements included in the Final Memorandum (exclusive of any
           supplement thereto), there has been no material adverse change in the
           condition (financial or other), earnings, business or properties of
           the Company and its subsidiaries, taken as a whole whether or not
           arising from transactions in the ordinary course of business, except
           as set forth in or contemplated in the Final Memorandum (exclusive of
           any supplement thereto).

               (g) The Company shall have furnished to the Representative a
certificate of the Chief Compliance Officer of PXRE Reinsurance Company to the
effect that PXRE Reinsurance Company and Transnational Reinsurance Company have
obtained all necessary

                                       15





<PAGE>
<PAGE>

state insurance regulatory licenses and approvals under the laws of each
state in which they operate or do business, except where the failure to be
so licensed or approved would not, either singularly or in the aggregate, have a
material adverse effect on the business or condition (financial or otherwise) of
the Company and its subsidiaries, taken as a whole.

               (h) At the Execution Time, Price Waterhouse LLP shall have
furnished to the Representative a letter or letters (which may refer to letters
previously delivered to the Representative), dated as of the Execution Time, in
form and substance satisfactory to the Representative and Price Waterhouse LLP,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:

                       (i) in their opinion the audited financial statements and
           financial statement schedules and pro forma financial statements, if
           any, included or incorporated in the Final Memorandum and reported on
           by them comply in form in all material respects with the applicable
           accounting requirements of the Act and the Exchange Act and the
           related published rules and regulations;

                       (ii) on the basis of a reading of the latest unaudited
           financial statements made available by the Company and its
           subsidiaries; their limited review in accordance with standards
           established by the American Institute of Certified Public Accountants
           of the unaudited interim financial information as indicated in their
           reports, if any, included or incorporated in the Final Memorandum;
           carrying out certain specified procedures (but not an examination in
           accordance with generally accepted auditing standards) which would
           not necessarily reveal matters of significance with respect to the
           comments set forth in such letter; a reading of the minutes of the
           meetings of the stockholders, directors and executive and audit
           committees of the Company and the Subsidiary; and inquiries of
           certain officials of the Company who have responsibility for
           financial and accounting matters of the Company and its subsidiaries
           as to transactions and events subsequent to the date of the most
           recent audited financial statements in or incorporated in the Final
           Memorandum, nothing came to their attention which caused them to
           believe that:

                       (1) any unaudited financial statements included or
                incorporated in the Final Memorandum do not comply in form in
                all material respects with applicable accounting requirements
                and with the published rules and regulations of the Commission
                with respect to financial statements included or incorporated in
                quarterly reports on Form 10-Q under the Exchange Act; or said
                unaudited financial statements are not in conformity with
                generally accepted accounting principles applied on a basis
                substantially consistent with that of the audited financial
                statements included or incorporated in the Final Memorandum;

                       (2) with respect to the period subsequent to the date of
                the most recent financial statements (other than any capsule
                information), audited or unaudited, in or incorporated in the
                Final Memorandum, there were at a specified date not more
                
                                       16







<PAGE>
<PAGE>

                than three business days prior to the date of the letter, (a)
                any material change in the capital stock or increase in the
                long-term debt of the Company and its subsidiaries or decreases
                in the stockholders' equity, total assets or cash and
                investments of the Company and its subsidiaries as compared with
                the amounts shown on the most recent consolidated balance sheet
                included or incorporated in the Final Memorandum, or (b) any
                material decreases, as compared with the corresponding period in
                theprior year in the consolidated gross and net premiums
                written, the total or per share amounts of net income, income
                before taxes or net investment income, except in all instances
                for changes or decreases set forth in such letter, in which case
                the letter shall be accompanied by an explanation by the Company
                as to the significance thereof unless said explanation is not
                deemed necessary by the Representative; and

                       (3) the amounts included in any unaudited "capsule"
                information included or incorporated in the Final Memorandum do
                not agree with the amounts set forth in the unaudited financial
                statements for the same periods or were not determined on a
                basis substantially consistent with that of the corresponding
                amounts in the audited financial statements included or
                incorporated in the Final Memorandum;

                       (iii) they have performed certain other specified
           procedures as a result of which they determined that certain
           information of an accounting, financial or statistical nature (which
           is limited to accounting, financial or statistical information
           derived from the general accounting records of the Company and its
           subsidiaries) set forth in the Final Memorandum, including the
           information included or incorporated in the Company's Annual Report
           on Form 10-K, incorporated in the Final Memorandum, and the
           information included or incorporated in the Company's Quarterly
           Reports on Form 10-Q, incorporated in the Final Memorandum, agrees
           with the accounting records of the Company and its subsidiaries,
           excluding any questions of legal interpretation; and
    
                       (iv) if unaudited pro forma financial statements are
           included or incorporated in the Final Memorandum, on the basis of a
           reading of the unaudited pro forma financial statements included or
           incorporated in the Final Memorandum (the "pro forma financial
           statements"), carrying out certain specified procedures, inquiries of
           certain officials of the Company who have responsibility for
           financial and accounting matters, and proving the arithmetic accuracy
           of the application of the pro forma adjustments to the historical
           amounts in the pro forma financial statements, nothing cameto their
           attention which caused them to believe that the pro forma financial
           statements do not comply in form in all material respects with the
           applicable accounting requirements of Rule 11-02 of Regulation S-X or
           that the pro forma adjustments have not been properly applied to the
           historical amounts in the compilation of such statements.

References to the Final Memorandum in this paragraph (h) include any amendment
or supplement thereto to the date of the letter. In addition, at the Closing
Date, Price Waterhouse

                                       17






<PAGE>
<PAGE>

LLP shall have furnished to the Representative a letter or letters, dated the
Closing Date, in form and substance satisfactory to the Representative, to the
effect set forth above.

               (i) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (h) of this
Section 6 or (ii) any change, or any development involving a prospective change,
in or affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Capital Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).

               (j) Subsequent to the Execution Time, there shall not have been
any decrease in the ratings of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such ratings that do
not indicate the direction of a possible change. The Capital Securities shall
have been assigned initial ratings as of the Execution Time of "ba1" from
Moody's Investors Services, Inc. and "BBB" from Standard & Poor's Rating
Services and there shall not have been any decrease in any such rating or any
notice given of any intended or potential decrease in any such rating or of a
possible change in any such ratings that do not indicate the direction of a
possible change.

               (k) Prior to the Closing Date, the Company and the Trust shall
have furnished to the Representative such further information, certificates and
documents as the Representative may reasonably request.
  
               (l) At the Closing Date, each of the Operative Documents shall
have been duly authorized, executed and delivered by each party thereto, and
copies thereof shall have been delivered to the Representative.

               If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions, certificates and documents mentioned above
or elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representative. Notice of such cancellation shall be given to the Company and
the Trust in writing or by telephone or telecopy confirmed in writing.
 
               The documents required to be delivered by this Section 6 shall be
delivered at the offices of counsel for the Initial Purchasers on the Closing
Date.

                                       18






<PAGE>
<PAGE>

               7. Conditions to the Obligations of the Company. The obligations
of the Company and the Trust to sell the Capital Securities shall be subject to
the Company having received consents, which have not been revoked, from the
holders of at least a majority in aggregate principal amount of its Senior Notes
permitting the consummation of the transactions contemplated hereby, as more
fully described in the Consent Solicitation Statement of the Company, dated
January 17, 1997, as amended.

               8. Reimbursement of Initial Purchasers' Expenses. If the sale of
the Capital Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 6
hereof is not satisfied, because of any termination pursuant to Section 11 (i)
hereof because trading in any of the Company's securities shall have been
suspended by the Commission or the New York Stock Exchange, or because of any
refusal, inability or failure on the part of the Company or the Trust to perform
any agreement herein or comply with any provision hereof other than by reason of
a default by any of the Initial Purchasers, the Company will reimburse the
Initial Purchasers severally upon demand for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Capital Securities, and the Company shall not then be under any liability to
any Initial Purchaser except as provided in Section 9 hereof.

               9. Indemnification and Contribution. (a) The Company and the
Trust agree jointly and severally to indemnify and hold harmless each Initial
Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company and the Trust will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company and the Trust by or on behalf of
any Initial Purchaser through the Representative specifically for inclusion
therein; and except that the Company and the Trust shall not be liable under the
provisions of this Section 9 with respect to the Preliminary Memorandum to the
extent that any such loss, claim, damage or liability results from the fact that
the Initial Purchasers sold Capital Securities to a person to whom there was not
sent or given, at

                                       19






<PAGE>
<PAGE>

or prior to the written confirmations of such sale, a copy of the Final
Memorandum if the loss, claim, damage or liability of the Initial Purchasers
results from an untrue statement or alleged untrue statement or omission or
alleged omission contained in the Preliminary Memorandum which was corrected in
the Final Memorandum. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.

               (b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever, as due from the Trust under
Section 9(a) hereunder.

               (c) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company and the Trust, each of their directors, trustees, officers,
and each person who controls the Company or the Trust within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Trust to each Initial Purchaser, but only
with reference to written information relating to such Initial Purchaser
furnished to the Company and the Trust by or on behalf of such Initial Purchaser
through the Representative specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
This indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Company and the Trust acknowledge that the
statements set forth in the final paragraph of the cover page and the statements
regarding the Initial Purchasers set forth in the second paragraph and the first
sentence of the second to last paragraph under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum,
and the Representative confirms that such statements are correct.

               (d) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a), (b)
or (c) above unless and to the extent that the indemnifying party did not
otherwise learn of such action and such failure results in prejudice to the
indemnifying party and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) in the opinion of counsel for the
indemnified party, the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the named parties in any such action

                                       20






<PAGE>
<PAGE>

include both the indemnified party and the indemnifying party and in the opinion
of the indemnified party's counsel there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party in writing to employ separate counsel at the expense of the indemnifying
party. Notwithstanding the foregoing, the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction
(except for local counsel from any other jurisdiction to the extent necessary
for the defense of such proceedings on behalf of the indemnified parties), be
liable for the fees and expenses of more than one separate firm for all such
indemnified parties, which counsel shall be selected by the Representative on
behalf of the Initial Purchasers. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent.

               (e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 9 is unavailable to or insufficient to hold harmless
any indemnified party for any reason, the Company, the Trust and the Initial
Purchasers agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, the Trust and one or more of the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Trust and by the Initial Purchasers from the offering of the
Capital Securities; provided, however, that in no case shall any Initial
Purchaser (except as may be provided in any agreement among Initial Purchasers
relating to the offering of the Capital Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Capital Securities purchased by such Initial Purchaser hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, the Trust and the Initial Purchasers shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Trust and of the Initial
Purchasers in connection with the statement or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company and the Trust shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
the Initial Purchasers shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth in the Final Memorandum.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the Company, the Trust
or the Initial Purchasers. The Company, the Trust and the Initial Purchasers
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account

                                       21






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of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (e), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person who controls an
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Initial Purchaser shall have
the same rights to contribution as such Initial Purchaser, and each person who
controls the Company or the Trust within the meaning of either the Act or the
Exchange Act, each officer of the Company and each director of the Company and
each trustee and each officer of the Trust shall have the same rights to
contribution as the Company and the Trust, subject in each case to applicable
terms and conditions of this paragraph (e).

               10. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Capital Securities
agreed to be purchased by such Initial Purchaser or Initial Purchasers hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Initial Purchasers
shall be obligated severally to take up and pay for (in the respective
proportions which the liquidation amount of Capital Securities set forth
opposite their names in Schedule I hereto bears to the aggregate liquidation
amount of Capital Securities set forth opposite the names of all the remaining
Initial Purchasers) the Capital Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate liquidation amount of Capital
Securities which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase shall exceed 10% of the aggregate stated liquidation
amount of Capital Securities set forth in Schedule I hereto, the remaining
Initial Purchasers shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Capital Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Capital Securities,
this Agreement will terminate without liability to any nondefaulting Initial
Purchaser, the Company or the Trust. In the event of a default by any Initial
Purchaser as set forth in this Section 10, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representative shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company and the Trust and any nondefaulting Initial Purchaser for damages
occasioned by its default hereunder.
 
               11. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representative, by notice given to the Company
and the Trust prior to delivery of and payment for the Capital Securities, if
prior to such time (i) trading in any of the Company's securities shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial

                                       22






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<PAGE>

markets is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the offering or delivery of the
Capital Securities as contemplated by the Final Memorandum (exclusive of any
supplement thereto).

               12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Trust or their respective officers or trustees on behalf of the
Company and the Trust and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Initial Purchaser, the Company or
the Trust or any of the officers, directors or controlling persons referred to
in Section 9 hereof, and will survive delivery of and payment for the Capital
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.

               13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered by hand-delivery (against written receipt) or by a courier
guaranteeing overnight delivery or telecopied and confirmed to it at Seven World
Trade Center, New York, New York 10048, attention of the Legal Department; if
sent to the Company or the Trust, will be mailed, delivered by hand-delivery
(against written receipt) or by a courier guaranteeing overnight delivery or
telecopied and confirmed to it at 399 Thornall Street, Fourteenth Floor, Edison,
NJ 08837, attention Treasurer, with a copy to Morgan, Lewis & Bockius LLP, 101
Park Avenue, New York, New York 10178, attention F. Sedgwick Browne.

               14. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 9 hereof,
and no other person will have any right or obligation hereunder.

               15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAW.

                                       23






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<PAGE>

               If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Trust and the Initial Purchasers.

                                                       Very truly yours,

                                                       PXRE CORPORATION
                                                     

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

                                                       PXRE CAPITAL TRUST I

                                                   By: /s/ Gerald L. Radke
                                                       ------------------------
                                                       Name: Gerald L. Radke
                                                       as Administrator

                                                   By: /s/ Joan Cadd
                                                       ------------------------
                                                       Name: Joan Cadd
                                                       as Administrator

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Brothers Inc


By: /s/ Kevin M. White
    -----------------------
    Name: Kevin M. White
    Title: Associate

For itself and the other
Initial Purchasers named in
Schedule I to the foregoing
Agreement.

                                       24






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                                   SCHEDULE I


                                                  Stated Liquidation
                                                  Amount of Capital
                                                  Securities To Be Purchased
                                                  -----------------------------
    Initial Purchaser
------------------------------------------------
Salomon Brothers Inc ............................          $50,000,000
J.P. Morgan Securities Inc. .....................           50,000,000
                                                          ------------
              Total..............................         $100,000,000
                                                          ============

                                       I






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<PAGE>



                                                                    EXHIBIT A

                     Non-Distribution Letter for Purchasers

                                                              __________, 199__

Salomon Brothers Inc
as Representative of the Initial Purchasers
Seven World Trade Center
New York, New York 10048

PXRE Corporation
PXRE Capital Trust I
399 Thornall Street
Fourteenth Floor
Edison, NJ 08837

 Re: Purchase of $100,000,000 stated liquidation amount of 8.85% Capital Trust
     Pass-through Securities`sm' (TruPS)`sm' (the "Capital Securities") of  PXRE
     Capital Trust I (the "Trust")
     ------------------------------------------------------------------------

Ladies and Gentlemen:

                   In connection with our purchase of the Capital Securities, we
confirm that:

                   1. We understand that the Capital Securities of the Trust
(including the guarantee (the "Guarantee") by PXRE Corporation ("PXRE") executed
in connection therewith) and the     % Junior Subordinated Deferrable Interest
Debentures due 2027 (the "Subordinated Debt Securities") of PXRE (the Capital
Securities, the Guarantee and the Subordinated Debt Securities together being
referred to herein as "Offered Securities") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws, and may not be offered or sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Offered Securities that, if, prior to
the date which is three years after the laterof the date of original issue of
the Offered Securities and the last date on which PXRE, the Trust or any
affiliate of PXRE or the Trust was the owner of such Offered Securities (the
"Resale Restriction Termination Date"), we decide to offer, sell or otherwise
transfer any such Offered Securities, such offer, sale or transfer will be made
only (a) to PXRE or the Trust, (b) pursuant to an effective registration
statement under the Securities Act, (c) so long as the Offered Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and to
whom notice is given that the transfer is being made in reliance on Rule 144A,
(d) to an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is acquiring
Offered Securities for its own account or for the account of such an
institutional accredited investor for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof in

                                      A-1






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<PAGE>

violation of the Securities Act, or (e) pursuant to another available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirements of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Offered
Securities is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trust and PXRE,
which shall provide as applicable, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act that is acquiring such
Securities for investment purposes and not for distribution in violation of the
Securities Act. We acknowledge on our behalf and on behalf of any investor
account for which we are purchasing Offered Securities that the Trust and PXRE
reserve the right prior to any offer, sale or other transfer pursuant to clauses
(d) or (e) prior to the Resale Restriction Termination Date of the Offered
Securities to require the delivery of any opinion of counsel, certifications
and/or other information satisfactory to the Trust and PXRE. We understand that
the certificates for any Offered Security that we receive will bear a legend
substantially to the effect of the foregoing.

                   2. We are an institutional "accredited investor" with the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Offered Securities
for investment purposes and not with view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Offered Securities, and
we and any account for which we are acting are each able to bear the economic
risks of our or its investment.

                   3. We are acquiring the Offered Securities purchased by us
for our own account (or for one or more accounts as to each of which we exercise
sole investment discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to any distribution of
the Offered Securities, subject, nevertheless, to the understanding that the
disposition of our property will at all times be and remain within our control.

                   4. We acknowledge that (a) none of PXRE, the Trust, or the
Initial Purchasers (as defined in the Offering Memorandum dated January 24, 1997
relating to the Offered Securities (the "Final Memorandum")) nor any person
acting on behalf of PXRE, the Trust or the Initial Purchasers has made any
representation to us with respect to PXRE, the Trust or the offer or sale of any
Offered Securities and (b) any information we desire concerning PXRE, the Trust
and the Offered Securities or any other matter relevant to our decision to
purchase the Offered Securities (including a copy of the Final Memorandum) is or
has been made available to us.

                   5. In the event that we purchase any Capital Securities (or
receive any Subordinated Debt Securities upon the liquidation of the Trust), we
will acquire and hold such Capital Securities having an aggregate stated
liquidation amount of not less than $100,000 or

                                      A-2







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such Subordinated Debt Securities having an aggregate principal amount not less
than $100,000, for our own account and for each separate account for which we
are acting.

                   6. We acknowledge that we (A) are not ourselves, and are not
acquiring Offered Securities with "plan assets" of, an employee benefit or other
plan subject to Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (each, a "Plan"), or an entity whose underlying assets
include "plan assets" by reason of any Plan's investment in the entity (a "Plan
Asset Entity") or (B)(1) are ourselves, or are acquiring Offered Securities with
the assets of an "investment fund" (within the meaning of Part V(b) of PTCE
84-14) managed by a "qualified professional asset manager" (within the meaning
of Part V(a) of PTCE 84-14) which has made or properly authorized the decision
for such fund to purchase Offered Securities, under circumstances such that PTCE
84-14, is applicable to the purchase and holding of such Offered Securities, (2)
are ourselves, or are acquiring Offered Securities with the assets of, a Plan
managed by an "in-house asset manager" (within the meaning of Part IV(a) of PTCE
96-23) which has made or properly authorized the decision for such Plan to
purchase Offered Securities, under circumstances such that PTCE 96-23 is
applicable to the purchase and holding of such Offered Securities, (3) are an
insurance company pooled separate account purchasing Offered Securities pursuant
to Part I of PTCE 90-1 or a bank collective investment fund purchasing Offered
Securities pursuant to Part I of PTCE 91-38, and in either case no Plan owns
more than 10% of the assets of such account or collective fund (when aggregated
with other Plans of the same employer (or its affiliates) or employee
organization) or (4) are an insurance company using the assets of its general
account to purchase the Offered Securities pursuant to Part I of PTCE 95-60, in
which case the reserves and liabilities for the general account contracts held
by or on behalf of any Plan, together with any other Plans maintained by the
same employer (or its affiliates) or employee organization, do not exceed 10% of
the total reserves and liabilities of the insurance company general account
(exclusive of separate account liabilities), plus surplus as set forth in the
National Association of Insurance Commissioners Annual Statement filed with the
state of domicile of the insurer.

                                      A-3







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<PAGE>

                   7. We acknowledge that PXRE, the Trust, the Initial
Purchasers and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations, warranties and agreements and agree that if
any of the acknowledgments, representations, warranties and agreements made by
us herein with respect to our purchase of the Offered Securities are no longer
accurate, we shall promptly notify the Initial Purchasers.

                                            Very truly yours,

                                            -----------------------------------
                                            (Name of Purchaser)

 
                                            By:---------------------------------
      
                                            Date:-------------------------------

                   Upon transfer, the Offered Securities would be registered in
the name of the new beneficial owner as follows.

Name:---------------------------------------------------------------------------

Address:------------------------------------------------------------------------

    Taxpayer ID Number:


                                      A-4

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