o the establishment of a direct presence in the Bermuda market.
Also, during the third quarter of 2000, PXRE ceased accepting new or renewal risks at Lloyd's. PXRE's Lloyd's operations consist of PXRE Managing Agency Limited ("PXRE Managing Agency") and PXRE Limited, the sole member of Syndicate 1224 ("PXRE Lloyd's Syndicate"). PXRE Lloyd's Syndicate underwrote specialty types of property and casualty insurance and reinsurance (including certain accident and health coverages as well as catastrophe-type coverages, aerospace reinsurance and facultative reinsurance) on a worldwide basis. PXRE Managing Agency during 2000 managed, on a fee basis, PXRE Lloyd's Syndicate and other syndicates at Lloyd's. Final disposition of the syndicate and agency has not been determined but the costs of administering the existing book will be incurred over the next three
As PXRE underwrites risks from a large number of insurers based on information generally supplied by reinsurance brokers, there is a risk of developing a concentration of exposure to loss in certain geographic areas prone to specific types of catastrophes. PXRE has developed systems and software tools to monitor and manage the accumulation of its exposure to such losses. Management has established guidelines for maximum tolerable losses from a single or multiple catastrophic events based on historical data; however, no assurance can be given that these maximums will not be exceeded in some future catastrophe.
The Company and its non-U.S. subsidiaries intend to operate their business in a manner that will not cause them to be treated as engaged in a trade or business in the United States and, thus, will not require them to pay U.S. federal corporate income taxes (other than withholding taxes on certain U.S. source investment income and excise taxes on reinsurance premiums). However, because there is uncertainty as to the activities which constitute being engaged in a trade or business within the United States, there can be no assurances that the U.S. Internal Revenue Service will not contend successfully that the Company or a non-U.S. subsidiary is engaged in a trade or business in the United States. PXRE understands that certain U.S.-based insurance companies are advocating an amendment to the U.S. Internal Revenue Code which would impose U.S. federal income tax on a domestic insurer which is controlled by a foreign reinsurer on the deemed investment income on its reserves on U.S. risks ceded to one or more foreign reinsurers. At this point, PXRE is unable to predict whether this legislative effort will be successful, what form any such legislation may ultimately take and what impact any such legislation would have on the Company. If the Company or any of its non-U.S. subsidiaries were subject to U.S. income tax, the Company's shareholders' equity and earnings could be materially adversely affected.
Gross premiums written for 2000 increased 21.5% to $268,990,000 from $221,349,000 for 1999. Net premiums written for the year ended December 31, 2000 increased 24.4% to $172,701,000 from $138,845,000 for 1999. Net premiums earned for the year ended December 31, 2000, increased 24.7% to $160,206,000 from $128,504,000 in 1999. Gross written, net written and net earned premium for 2000 increased from prior-year levels reflecting growth in PXRE's Structured/Finite Business segment, Casualty segment and the Catastrophe and Risk Excess segment, including one retroactive finite contract written amounting to $20,024,000 gross premiums written, ceded premiums written of $10,012,000 and net premiums written and earned of $10,012,000. Gross and net premiums written increased in all segments except "Other lines" as PXRE curtailed underwriting activities at PXRE Lloyd's Syndicate during 2000. PXRE's decision to buy additional retrocessional coverage reduced growth in net written and net earned
premium. Reinstatement premiums were lower in 2000 on retrocessional coverage since the level of loss activity was lower than in 1999.
In 1999, catastrophe coverage and other reinsurance ceded premiums written increased due to PXRE fronting certain business on behalf of other reinsurers, to additional coverage associated with new operations and to opportunistic purchases of catastrophe retrocessional protection. PXRE's property business was protected by a series of retrocessional agreements which provided protection principally against unusual severity of loss rather than protecting PXRE's exposure to smaller, more frequent loss occurrences.
Dividends declared in 2000 to shareholders were $2,831,000 compared to $7,630,000 in 1999 as the dividend per share was $0.24 in 2000 compared to $0.64 in 1999. The expected annual dividend based on shares outstanding at December 31, 2000 is approximately $2,837,000.
All amounts classified as reinsurance recoverable at December 31, 2000 are considered by management of PXRE to be collectible in all material respects.
PXRE entered into weather option agreements in May 1999 with two counter parties. In April 2000 these counter parties submitted invoices to PXRE Delaware in the aggregate sum of $8,252,500 seeking payment under the weather option agreements, which invoices have been paid. PXRE Delaware insured its obligations under these weather option agreements through two Commercial Inland Marine Weather Insurance Policies issued by Terra Nova Insurance Company Limited ("Terra Nova"). PXRE Delaware submitted claims under these policies to