Shareholders of Bermudan reinsurer PXRE have filed a class action lawsuit against the firm, alleging that the reinsurer shielded information from them over the losses incurred through last year’s catastrophic hurricanes, in order to benefit the raising of its capital.

The lawsuit, filed by US legal firm Schiffrin & Barroway, accuses PXRE of concealing the full impact of Katrina, Rita and Wilma on its business and claims that the company’s losses had doubled to an estimated $758million.

The legal action follows on from what has been a bad start to 2006 for PXRE, after a significant deterioration in the reinsurer’s share price and A.M. Best’s downgrading of the company from Ato B++ at the beginning of this year.