<PAGE>

                                                                    EXHIBIT 4.11








                                     FORM OF


                               GUARANTEE AGREEMENT

                                     Between

                                 PXRE GROUP LTD.
                                 (as Guarantor)

                                       and

                            WILMINGTON TRUST COMPANY
                             (as Guarantee Trustee)










________ __, 20__


<PAGE>

              Certain Sections of this Guarantee Agreement relating
                       to Sections 310 through 318 of the
                           Trust Indenture Act of 1939

Trust Indenture Act                                      Guarantee Agreement
-------------------                                      -------------------
Section                                                              Section
-------                                                              -------
(ss.) 310(a)(1).......................................................4.1(a)
(a)(2)................................................................4.1(a)
(a)(3)........................................................Not applicable
(a)(4)........................................................Not applicable
(b)...............................................................2,8,4.1(c)
(ss.) 311(a)..................................................Not applicable
(b)...........................................................Not applicable
(ss.) 312(a)..........................................................2.2(a)
(b)...................................................................2.2(b)
(c)...........................................................Not applicable
(ss.) 313(a).............................................................2.3
(a)(4)...................................................................2.3
(b)......................................................................2.3
(c)......................................................................2.3
(d)......................................................................2.3
(ss.) 314(a).............................................................2.4
(b)......................................................................2.4
(c)(1)...................................................................2.5
(c)(2)...................................................................2.5
(c)(3)...................................................................2.5
(e)............................................................1.1, 2.5, 3.2
(ss.) 315(a)..........................................................3.1(d)
(b)......................................................................2.7
(c)...................................................................3.1(c)
(d)...................................................................3.1(d)
(e)...........................................................Not applicable
(ss.) 316(a)...................................................1.1, 2.6, 5.4
(a)(1)(A)................................................................5.4
(a)(1)(B)................................................................5.4
(a)(2)........................................................Not applicable
(b)......................................................................5.3
(c)...........................................................Not applicable
(ss.) 317(a)(1)...............................................Not applicable
(a)(2)........................................................Not applicable
(b)...........................................................Not applicable
(ss.) 318(a).............................................................2.1


Note:    This reconciliation and tie shall not, for any purpose, be deemed to be
         a part of the Guarantee Agreement

                                      (i)
<PAGE>

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----
                                   ARTICLE I.
                                   DEFINITIONS

Section 1.1.     Definitions................................................1

                                   ARTICLE II.
                               TRUST INDENTURE ACT

Section 2.1.     Trust Indenture Act; Application...........................5
Section 2.2.     List of Holders............................................5
Section 2.3.     Reports by the Guarantee Trustee...........................5
Section 2.4.     Periodic Reports to the Guarantee Trustee..................6
Section 2.5.     Evidence of Compliance with Conditions Precedent...........6
Section 2.6.     Events of Default; Waiver..................................6
Section 2.7.     Event of Default; Notice...................................6
Section 2.8.     Conflicting Interests......................................7

                                  ARTICLE III.
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

Section 3.1.     Powers and Duties of the Guarantee Trustee.................7
Section 3.2.     Certain Rights of Guarantee Trustee........................8
Section 3.3.     Indemnity.................................................10
Section 3.4.     Expenses..................................................10

                                   ARTICLE IV.
                                GUARANTEE TRUSTEE

Section 4.1.     Guarantee Trustee; Eligibility............................10
Section 4.2.     Appointment, Removal and Resignation
                 of the Guarantee Trustee..................................11

                                      (ii)
<PAGE>

                                   ARTICLE V.
                                    GUARANTEE

Section 5.1.     Guarantee.................................................12
Section 5.2.     Waiver of Notice and Demand...............................12
Section 5.3.     Obligations Not Affected..................................12
Section 5.4.     Rights of Holders.........................................13
Section 5.5.     Guarantee of Payment......................................13
Section 5.6.     Subrogation...............................................13
Section 5.7.     Independent Obligations...................................14

                                   ARTICLE VI.
                           COVENANTS AND SUBORDINATION

Section 6.1.     Subordination.............................................14
Section 6.2.     Pari Passu Guarantees.....................................14

                                  ARTICLE VII.
                                   TERMINATION

Section 7.1.     Termination...............................................14

                                  ARTICLE VIII.
                                  MISCELLANEOUS

Section 8.1.     Successors and Assigns....................................15
Section 8.2.     Amendments................................................15
Section 8.3.     Notices...................................................15
Section 8.4.     Benefit...................................................16
Section 8.5.     Interpretation............................................16
Section 8.6.     Governing Law.............................................17
Section 8.7.     Counterparts..............................................17




                                     (iii)
<PAGE>

         This GUARANTEE AGREEMENT, dated as of __________, 20___ is executed and
delivered by PXRE GROUP LTD., a Bermuda company (the "Guarantor"), having its
principal office at Swan Building, 26 Victoria Street, Hamilton HM 12, Bermuda,
and Wilmington Trust Company, a Delaware banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of PXRE Capital Trust
IV, a Delaware statutory trust (the "Issuer Trust").

         WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 20___, among PXRE Group Ltd., as
Depositor, Wilmington Trust Company, as Trustee (the "Issuer Trustee"), two
individuals selected by the holders of the Common Securities to act as
administrators with respect to the Issuer Trust (the "Administrators"), and the
Holders from time to time of preferred undivided beneficial ownership interests
in the assets of the Issuer Trust, the Issuer Trust is issuing $__________
aggregate Liquidation Amount (as defined herein) of its ___% Capital Securities,
Liquidation Amount $25 per capital security (the "Capital Securities") (and may
issue up to $__________ in aggregate Liquidation Amount of additional Capital
Securities pursuant to an over-allotment option granted to the underwriters of
the Capital Securities), representing preferred undivided beneficial ownership
interests in the assets of the Issuer Trust and having the terms set forth in
the Trust Agreement;

         WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Junior Subordinated Debentures (as defined in the Trust Agreement) of the
Guarantor which will be deposited with the Property Trustee under the Trust
Agreement, as trust assets; and

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

         NOW, THEREFORE, in consideration of the purchase of the Capital
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, and intending to be legally bound hereby, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of the
Holders from time to time of the Capital Securities.

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.1. Definitions.

         As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Trust Agreement as in effect on the date hereof.

                                       1
<PAGE>

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Capital Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.

         "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.

         "Distributions" means preferential cumulative cash distributions
accumulating from and including _______, 20__ and payable quarterly in arrears
on ________, ________, ________ and ________ of each year, commencing ________,
20__, at the annual rate of ___% of the Liquidation Amount.

         "Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.

         "Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to the extent the
Issuer Trust shall have funds on hand available therefor at such time, (ii) the
Redemption Price, with respect to the Capital Securities called for redemption
by the Issuer Trust to the extent that the Issuer Trust shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer Trust, unless Junior
Subordinated Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount and all accumulated and unpaid Distributions
to the date of payment, to the extent that the Issuer Trust shall have funds on
hand available therefor at such time, and (b) the amount of assets of the Issuer
Trust remaining available for distribution to Holders on liquidation of the
Issuer Trust (in either case, the "Liquidation Distribution").

                                       2
<PAGE>

         "Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.

         "Guarantor" shall have the meaning specified in the first paragraph of
this Guarantee Agreement.

         "Holder" means any holder, as registered on the books and records of
the Issuer Trust, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee, except that (a) in determining whether the
Guarantee Trustee shall be protected in relying upon any such request, notice,
consent or waiver, only Capital Securities that the Guarantee Trustee knows to
be so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the outstanding Capital Securities are owned by the Guarantor,
the Guarantee Trustee and/or any such Affiliate.

         "Indenture" means the Junior Subordinated Indenture dated as of
_______, 20__, between PXRE Group Ltd. and Wilmington Trust Company, as trustee,
as may be modified, amended or supplemented from time to time.

         "Issuer Trust" shall have the meaning specified in the first paragraph
of this Guarantee Agreement.

         "Liquidation Amount" means the stated amount of $25 per Capital
Security.

         "Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer Trust.

         "Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Junior Subordinated Indenture,
allocated to the Common Securities and to the Capital Securities based upon the
relative Liquidation Amounts of such classes and (ii) with respect to a
distribution of Junior Subordinated Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Issuer Trust, Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Junior Subordinated
Debentures are distributed.

         "Officer's Certificate" means a certificate signed by any one of the
following: the Chairman of the Board, the President, the Chief Financial
Officer, the Chief Strategic and Administrative Officer, the Chief Legal
Officer, the Treasurer, any Assistant Treasurer of the Company or any other
person authorized by the Board of Directors to execute any such certificate, and
delivered to the Guarantee Trustee. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:

                                       3
<PAGE>

                  (a) a statement by the officer signing the Officer's
Certificate that such officer has read the covenant or condition and the
definitions relating thereto;

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

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

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

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

         "Redemption Date" means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Junior Subordinated Debentures shall be a Redemption
Date for a Like Amount of Capital Securities.

         "Redemption Price" shall have the meaning specified in the Trust
Agreement.

         "Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any vice
president, assistant vice president, assistant treasurer, assistant secretary or
any other officer of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

         "Senior Indebtedness" shall have the meaning specified in the
Indenture.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

                                       4
<PAGE>

         "Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of ____________, 20__ executed by PXRE Group Ltd., as Sponsor, and Wilmington
Trust Company, as Property Trustee.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb), as amended.

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

                                  ARTICLE II.

                               TRUST INDENTURE ACT

         Section 2.1. Trust Indenture Act; Application.

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be apart of and
govern this Guarantee Agreement, the provision of the Trust Indenture Act shall
control. If any provision of this Guarantee Agreement modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.

         Section 2.2. List of Holders.

                  (a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:

                  (i) quarterly, not more than 15 days after _______, _______,
                  _______ and _______ in each year, a list, in such form as the
                  Guarantee Trustee may reasonably require, of the names and
                  addresses of the Holders as of such _______, _______, _______
                  and _______; and

                  (ii) at such other times as the Guarantee Trustee may request
                  in writing, within 30 days after the receipt by the Guarantor
                  of any such request, a list of similar form and content as of
                  a date not more than 15 days prior to the time such list is
                  furnished.

                  (b) The Guarantee Trustee shall comply with the requirements
of Section 312(b) of the Trust Indenture Act.

         Section 2.3. Reports by the Guarantee Trustee.

         Not later than _______ of each year, commencing _______, 20__, the
Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

                                       5
<PAGE>

         Section 2.4. Periodic Reports to the Guarantee Trustee.

         The Guarantor shall provide to the Guarantee Trustee, and the Holders
such documents, reports and information, if any, as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.

         Section 2.5. Evidence of Compliance with Conditions Precedent.

         The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officer's Certificate.

         Section 2.6. Events of Default; Waiver.

         The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.

         Section 2.7. Event of Default; Notice.

                  (a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of such
notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

                  (b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice of
such Event of Default.

                                       6
<PAGE>

         Section 2.8. Conflicting Interests.

         The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III.

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         Section 3.1. Powers and Duties of the Guarantee Trustee.

                  (a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.

                  (b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.

                  (c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

                  (d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

                      (i) Prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:

                                       7
<PAGE>

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee Agreement (including pursuant to Section
                  2.1), and the Guarantee Trustee shall not be liable except for
                  the performance of such duties and obligations as are
                  specifically set forth in this Guarantee Agreement (including
                  pursuant to Section 2.1); and

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee Agreement; but in the case
                  of any such certificates or opinions that by any provision
                  hereof or of the Trust Indenture Act are specifically required
                  to be furnished to the Guarantee Trustee, the Guarantee
                  Trustee shall be under a duty to examine the same to determine
                  whether or not they conform to the requirements of this
                  Guarantee Agreement;

                      (ii) The Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;

                      (iii) The Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Capital Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and

                      (iv) No provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.

         Section 3.2. Certain Rights of Guarantee Trustee.

                  (a) Subject to the provisions of Section 3.1:

                      (i) The Guarantee Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.

                                       8
<PAGE>

                      (ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate unless otherwise prescribed herein.

                      (iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.

                      (iv) The Guarantee Trustee may consult with legal counsel,
and the advice or written opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by it hereunder in good faith
and in accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.

                      (v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee.

                      (vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.

                      (vii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any negligence or wilful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.

                      (viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the Holders,
(B) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (C) shall be fully protected in acting
in accordance with such instructions.

                                       9
<PAGE>

                  (b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

         Section 3.3. Indemnity.

         The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.

         Section 3.4. Expenses.

         The Guarantor shall from time to time reimburse the Guarantee Trustee
for its expenses and costs (including reasonable attorneys' or agents' fees)
incurred in connection with the performance of its duties hereunder.

                                  ARTICLE IV.

                                GUARANTEE TRUSTEE

         Section 4.1. Guarantee Trustee; Eligibility.

                  (a) There shall at all times be a Guarantee Trustee which
shall:

                      (i) not be an Affiliate of the Guarantor; and

                      (ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(c) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.

                                       10
<PAGE>

                  (b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2.

                  (c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.

         Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.

                  (a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.

                  (b) Subject to the immediately preceding paragraph, a
Guarantee Trustee may resign at any time by giving written notice thereof to the
Holders at which time the Issuer shall appoint a Successor Guarantee Trustee. If
the instrument of acceptance by the Successor Guarantee Trustee shall not have
been delivered to the Guarantee Trustee within 60 days after the giving of such
notice of resignation, the Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for the appointment of a
Successor Guarantee Trustee.

                  (c) The Guarantee Trustee may be removed for cause at any time
by Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders
of at least a Majority in Liquidation Amount of the Capital Securities,
delivered to the Guarantee Trustee.

                  (d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder, on
behalf of himself and all others similarly situated, may petition any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.

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                                   ARTICLE V.

                                    GUARANTEE

         Section 5.1. Guarantee.

         The Guarantor irrevocably and unconditionally agrees to pay in full, on
a subordinated basis as set forth in Article VI, to the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by or on behalf of the
Issuer Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer Trust may have or assert, except the defense of
payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer Trust to pay such amounts to the Holders. The Guarantor shall
give prompt written notice to the Guarantee Trustee in the event it makes any
direct payment hereunder.

         Section 5.2. Waiver of Notice and Demand.

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

         Section 5.3. Obligations Not Affected.

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

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

                  (b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;

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

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<PAGE>

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

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

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

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

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

         Section 5.4. Rights of Holders.

         The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.

         Section 5.5. Guarantee of Payment.

         This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Junior Subordinated Debentures
to Holders as provided in the Trust Agreement.

         Section 5.6. Subrogation.

         The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement or any
payments are due to the holders of Capital Securities under the Trust Agreement.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

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<PAGE>

         Section 5.7. Independent Obligations.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections(a) through (g), inclusive, of Section 5.3 hereof.

                                  ARTICLE VI.

                           COVENANTS AND SUBORDINATION

         Section 6.1. Subordination.

         This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Guarantor to the extent and in the manner set forth in the
Indenture with respect to the Junior Subordinated Debentures, and the provisions
of Article XIII of the Indenture will apply, mutatis mutandis, to the
obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness of the Guarantor.

         Section 6.2. Pari Passu Guarantees.

         The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with any similar guarantee agreements issued by the Guarantor on
behalf of the holders of preferred or capital securities issued by the Issuer
Trust and with any other security, guarantee or other obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Guarantee Agreement.

                                  ARTICLE VII.

                                   TERMINATION

         Section 7.1. Termination.

         This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Junior Subordinated Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with Article IX of the Trust Agreement upon liquidation of
the Issuer Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case maybe, if at any
time any Holder is required to repay any sums paid with respect to Capital
Securities or this Guarantee Agreement.

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<PAGE>

                                 ARTICLE VIII.

                                  MISCELLANEOUS

         Section 8.1. Successors and Assigns.

         All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article IX of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder, and any purported assignment that is not in accordance
with these provisions shall be void.

         Section 8.2. Amendments.

         Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.

         Section 8.3. Notices.

         Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied (confirmed by delivery of the original) or
mailed by first class mail as follows:

         (a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number or to the attention of such
other Person as the Guarantor may give notice to the Holders:

                  PXRE Group Ltd.
                  Swan Building
                  26 Victoria Street
                  Hamilton HM 12
                  Bermuda

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<PAGE>

                  (b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address set forth
below or such other address or telecopy number or to the attention of such other
Personas the Guarantee Trustee on behalf of the Issuer Trust may give notice to
the Holders:

                  c/o Wilmington Trust Company
                  1100 North Market Street
                  Wilmington, DE 19890

                  with a copy to:

                  PXRE Group Ltd.
                  Swan Building
                  26 Victoria Street
                  Hamilton HM 12
                  Bermuda


                  (c) if given to the Guarantee Trustee:

                  Wilmington Trust Company
                  1100 North Market Street
                  Wilmington, DE  19890


                  (d) if given to any Holder, at the address set forth on the
books and records of the Issuer Trust.

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

         Section 8.4. Benefit.

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

         Section 8.5. Interpretation.

         In this Guarantee Agreement, unless the context otherwise requires:

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<PAGE>

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

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

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

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

                  (e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;

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

                  (g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.

         Section 8.6. Governing Law.

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

         Section 8.7. Counterparts.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.


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<PAGE>


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

                                    PXRE GROUP LTD.
                                    as Guarantor


                                    By:____________________________________

                                    Name:
                                    Title:


                                    WILMINGTON TRUST COMPANY,
                                    as Guarantee Trustee, and not
                                    in its individual capacity

                                    By:____________________________________

                                    Name:
                                    Title:



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