8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 5, 2003

PMA Capital Corporation
(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction
of incorporation) 000-22761
(Commission
File Number) 23-2217932
(IRS Employer
Identification No.)

1735 Market Street, Suite 2800
Philadelphia, Pennsylvania
(Address of principal executive offices)  
19103-7590
(Zip Code)

Registrant's telephone number, including area code:

(215) 665-5046

Not Applicable
(Former name or former address, if changed since last report)

Item 5. Other Events and Regulation FD Disclosure.

        The following is an update to the risk factors included in our Form 10-K for the year ended December 31, 2001, as updated by our subsequently filed Forms 10-Q and Forms 8-K. This Form 8-K should, therefore, be read in conjunction with the risk factors included in those reports.

        On March 5, 2003, Moody’s Investors Service announced that it was changing the long-term debt ratings of PMA Capital Corporation from Baa3 to Ba1, and the insurance financial strength rating of PMA Capital Insurance Company from A3 to Baa1. The current financial strength rating of Baa1 of the domestic insurance companies within The PMA Insurance Group was affirmed. The outlook for these ratings is negative.

        As we have stated previously in our SEC filings, a downgrade in our insurance financial strength ratings could affect our competitive position in the insurance industry and make it more difficult for us to market our products. A significant downgrade in our insurance financial strength ratings could result in a material loss of business as policyholders move to other companies with higher financial strength ratings.

        A downgrade in our debt ratings could affect our ability to raise additional debt with terms and conditions similar to our current debt, and accordingly, likely increase our cost of capital. In addition, a downgrade of our debt ratings could make it more difficult to raise capital to refinance any maturing debt obligations, to support business growth at our insurance subsidiaries and to maintain or improve the current financial strength ratings of our principal insurance subsidiaries. Furthermore, a downgrade of our senior debt rating by Standard & Poor’s below BBB- would result in an event of default under our existing credit facility, which could have a material adverse effect on our liquidity and capital resources.

        These ratings are subject to revision or withdrawal at any time by the rating agency, and therefore, no assurance can be given that these ratings can be maintained.

Item 7. Financial Statements and Exhibits.

        (c) The Exhibit Index on Page E-1 is incorporated herein by reference.

Item 9. Regulation FD Disclosure.

        (a) On March 5, 2003, the registrant issued a news release, a copy of which is filed as Exhibit 99 hereto and is incorporated herein by reference.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PMA Capital Corporation
Date: March 5, 2003	By: /s/ William E. Hitselberger
	William E. Hitselberger
	Senior Vice President, Chief Financial       and Treasurer

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Index to Exhibits

Number	Description	Method of Filing
99	PMA Capital Corporation news release dated March 5, 2003	Filed herewith

E-1

EX-99

Exhibit 99

PMA CAPITAL [LOGO]
A Specialty Risk Management Company

Mellon Bank Center Suite 2800
1735 Market Street
Philadelphia, PA 19103-7590

PRESS RELEASE

For Release: Immediate

      Contact: Albert D. Ciavardelli
                    (215) 665-5063

PMA Capital Responds to Moody’s Ratings Announcement

Philadelphia, PA, March 5, 2003 – PMA Capital (NASDAQ: PMACA) announced today that Moody’s Investors Service (“Moody’s”) issued a news release stating that it has lowered the long-term debt ratings of PMA Capital Corporation (PMACC) to Ba1 from Baa3 and the insurance financial strength rating of PMA Capital Insurance Company (PMACIC) to Baa1 from A3. Separately, the rating agency affirmed the Baa1 insurance financial strength ratings on the members of The PMA Insurance Group. Moody’s has a negative outlook on the ratings of PMACC, PMACIC and The PMA Insurance Group.

Commenting on Moody’s decision to move forward with a ratings action at this time, John W. Smithson, President and Chief Executive Officer of PMA Capital Corporation stated, “We value our relationship with Moody’s. However, we continue to believe that we will ultimately be successful in executing on various aspects of our capital plan, which we believe will provide us with the capital necessary to refinance our $45 million of outstanding bank debt and accomplish our business plan. We do not believe that Moody’s concern regarding the recent performance of our share price will prevent us from accomplishing our objectives. As a shareholder of PMA Capital myself, I am obviously disappointed that the market has chosen to value our shares on the basis of speculation about our capital raising plans. However, as we stated in a release earlier today, none of the alternatives currently being considered involve the issuance of our common stock or debt convertible into common stock.”

PMA Capital Corporation, headquartered in Philadelphia, Pennsylvania, is an insurance holding company, whose operating subsidiaries provide specialty risk management products and services to customers throughout the United States. The primary product lines of PMA Capital’s subsidiaries include property and casualty reinsurance, underwritten and marketed through PMA Re, and workers’ compensation, integrated disability and other commercial property and casualty lines of insurance in the eastern part of the United States, underwritten and marketed under the trade name The PMA Insurance Group. For additional information about PMA Capital and its specialty insurance businesses, please visit us at www.pmacapital.com.

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements made in this press release that are not historical facts are forward-looking statements and are based on estimates, assumptions and projections. Actual results may differ materially from those projected in the forward-looking statements.

These forward-looking statements are based on currently available financial, competitive and economic data and the Company’s current operating plans based on assumptions regarding future events. The Company’s actual results could differ materially from those expected by the Company’s management. The factors that could cause actual results to vary materially, some of which are described with the forward-looking statements, include, but are not limited to:

o changes in general economic conditions, including the performance of financial markets, interest rates and the level of unemployment;

o regulatory or tax changes, including changes in risk-based capital or other regulatory standards that affect the cost of, or demand for, the Company’s products or otherwise affect the ability of the Company to conduct its business;

o competitive conditions that may affect the level of rate adequacy related to the amount of risk undertaken and that may influence the sustainability of adequate rate changes;

o ability to implement and maintain rate increases;

o the effect of changes in workers’compensation statutes and their administration, which may affect the rates that we can charge and the manner in which we administer claims;

o the Company’s ability to predict and effectively manage claims related to insurance and reinsurance policies;

o the lowering or loss of one or more of the financial strength, claims paying or debt ratings of the Company and/or its subsidiaries;

o adequacy of reserves for claim liabilities;

o adverse property and casualty loss development for events the Company insured in prior years;

o the uncertain nature of damage theories and loss amounts and the development of additional facts related to the attack on the World Trade Center;

o uncertainty as to the price and availability of reinsurance on business we intend to write in the future, including reinsurance for terrorist acts;

o adequacy and collectibility of reinsurance purchased by the Company;

o severity of natural disasters and other catastrophes in connection with insurance or reinsurance polices;

o reliance on key management;

o uncertainties related to possible terrorist activities or international hostilities; and

o other factors disclosed from time to time in the Company’s most recent Forms 10-K, 10-Q and 8-K filed by the Company with the Securities and Exchange Commission.

Investors should not place undue reliance on any such forward-looking statements. The Company disclaims any obligation to update forward-looking information and to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.