8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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) February 15, 2005

PMA Capital Corporation

(Exact name of Registrant as specified in its charter)

Pennsylvania	000-22761	22-2217932
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

380 Sentry Parkway Blue Bell, Pennsylvania	19422
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (215) 665-5046

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant

under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 15, 2005, the registrant issued a news release regarding its Fourth Quarter 2004 results, a copy of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.  The registrant also released its Fourth Quarter 2004 Statistical Supplement, which is furnished as Exhibit 99.2 and is incorporated herein by reference.

The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit 99.1	PMA Capital Corporation News Release, dated February 15, 2005
Exhibit 99.2	PMA Capital Corporation Fourth Quarter 2004 Statistical Supplement

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, thereunto duly authorized.

	PMA Capital Corporation
February 15, 2005	By:	/s/ William E. Hitselberger
	Name:	William E. Hitselberger
	Title:	Executive Vice President and Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
Exhibit 99.1	PMA Capital Corporation News Release, dated February 15, 2005
Exhibit 99.2	PMA Capital Corporation Fourth Quarter 2004 Statistical Supplement

EX-99.1

Exhibit 99.1

 

380 Sentry Parkway Blue Bell, PA 19422-0754
	PRESS RELEASE
For Release:Immediate Contact:William Hitselberger  (215) 665-5046

PMA Capital Announces Fourth Quarter 2004 Results

Blue Bell, PA, February 15, 2005 -- PMA Capital Corporation (NASDAQ: PMACA) today announced financial results for the fourth quarter and year ended December 31, 2004. PMA Capital reported a net loss of $10.3 million, or 33 cents per share, for the fourth quarter, compared to a net loss of $20.0 million, or 64 cents per share, for the same period last year. Net income was $1.8 million, or six cents per share, for full year 2004, compared to a net loss of $93.6 million, or $2.99 per share, for 2003.

Vincent T. Donnelly, President and Chief Executive Officer commented, “We achieved our most important goal in 2004, the restoration in the fourth quarter of The PMA Insurance Group’s A- A.M. Best financial strength rating. While executing the capital plan necessary to achieve this goal contributed to the fourth quarter loss, we believe that the improved liquidity at the holding company and increased financial flexibility provided through the completion of the exchange offer and the sale of additional securities was crucial.”

“We are entering 2005 with positive momentum and enhanced confidence,” Mr. Donnelly continued. “Our goal in 2005 is to achieve measured written premium growth by capitalizing on our solid franchise while adhering to our underwriting standards.”

PMA Capital also announced today the election of James C. Hellauer to the Board of Directors. Jim replaces Mark Wilcox, who resigned from the Board for personal reasons. Jim, a Naval Academy and Harvard business school graduate, has 38 years of senior management experience.  Neal Schneider, Chairman of the Board of PMA Capital, noted, "We are very fortunate to have Jim join the Board. His breadth of experience will be invaluable to PMA Capital as we continue our work to build the value of the organization."

During the fourth quarter of 2004, PMA Capital exchanged $84.1 million principal amount of 6.50% convertible debt for $84.1 million principal amount of its 4.25% convertible debt and sold $15 million of new 6.50% convertible debt. Costs associated with the exchange and sale of convertible debt reduced results by $6.4 million after-tax ($9.8 million pre-tax), or 20 cents per share, which included a loss on the debt exchange of $3.9 million after-tax ($6.0 million pre-tax) and a loss of $2.5 million after-tax ($3.8 million pre-tax) for the subsequent increase in the fair value of the derivative component of the convertible debt. The loss associated with the derivative component is included in net realized investment gains and losses.

Including the increase in the fair value of the derivative component of the convertible debt, after-tax net realized investment results were losses of $5.1 million, or 16 cents per share, for the fourth quarter and gains of $4.2 million, or 14 cents per share, for the full year. After-tax net realized investment gains were $2.3 million, or seven cents per share, for the fourth quarter of 2003 and $9.0 million, or 28 cents per share, for the full year.

Also included in fourth quarter 2004 results was a $4.3 million after-tax gain ($6.6 million pre-tax), or 14 cents per share, on the sale of a partnership interest, which is included in other revenues. Results for the fourth quarter of 2003 included a non-cash charge of $25 million, or 80 cents per share, to increase the valuation allowance for our deferred tax asset, a net charge of $4.6 million ($7.0 million pre-tax), or 15 cents per share, due to lower underwriting results at The PMA Insurance Group for workers’ compensation business written for accident years 2001 and 2002 and an after-tax charge of $3.7 million ($5.7 million pre-tax), or 12 cents per share, related to our exit from the reinsurance business.

Results for full year 2004 also include an after-tax charge of $3.9 million ($6.0 million pre-tax), or 12 cents per diluted share, to purchase reinsurance covering potential adverse loss development at the Run-off Operations. Results for full year 2003 included the third quarter after-tax charge of $97.5 million, or $3.11 per share, to increase loss reserves for our reinsurance business. In addition, the total valuation allowance on the deferred tax asset of $49 million recorded in 2003 impacted results by $1.56 per share for the full year.

Consolidated revenues were $105.0 million and $608.0 million for fourth quarter and full year 2004, respectively, compared to $369.4 million and $1,301.2 million for the same periods in 2003, reflecting lower net premiums earned due to our fourth quarter 2003 withdrawal from the reinsurance business. To a lesser extent, the lower revenues reflect the impact of The PMA Insurance Group’s B++ A.M. Best financial strength rating, which was upgraded to A- (Excellent) on November 15, 2004.

Financial Condition

Total assets were $3.3 billion as of December 31, 2004, compared to $4.2 billion as of December 31, 2003. Shareholders’ equity was $445.5 million as of December 31, 2004, compared with $463.7 million as of December 31, 2003. Book value per share was $14.06 as of December 31, 2004, compared with $14.80 as of December 31, 2003. The decreases in shareholders’ equity and book value per share are primarily due to lower net unrealized gains on our investment portfolio. Net unrealized holding gains were $13.6 million, or 43 cents per share, as of December 31, 2004, compared to $31.4 million, or $1.00 per share, at year-end 2003, mainly due to higher market interest rates. At December 31, 2004, we had $31.3 million in cash and short-term investments at the holding company and its non-regulated subsidiaries.

2

As of December 31, 2004, our total outstanding debt was $214.5 million, compared to $187.6 million at December 31, 2003. The components of our debt as of December 31, 2004 were as follows:

(dollar amounts in thousands)		Amount	Maturity
6.50% Convertible debt1	$	99,140	2022	2
Derivative component of 6.50% Convertible debt		13,086
4.25% Convertible debt1,3		925	2022
Trust preferred debt		43,816	2033
8.50% Senior notes		57,500	2018
Total long-term debt	$	214,467

(1)   This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share.

(2)   Holders, at their option, may require us to repurchase all or a portion of their debentures on June 30, 2009 at 114% of the principal amount.

(3)   We retired $1.2 million of this debt through open market purchases in the fourth quarter of 2004.

The statutory surplus of The PMA Insurance Group was $300.0 million at December 31, 2004, compared to $296.8 million at December 31, 2003. The PMA Insurance Group has the ability to pay $23.5 million in dividends during 2005 without the prior approval of the Pennsylvania Insurance Commissioner. The statutory surplus of PMA Capital Insurance Company (“PMACIC”), PMA Capital Corporation’s directly held reinsurance subsidiary, was $224.5 million at December 31, 2004, compared to $500.6 million at December 31, 2003. The statutory surplus of PMACIC at December 31, 2003 included $296.8 million of statutory surplus from the insurance subsidiaries comprising The PMA Insurance Group. Ownership of The PMA Insurance Group was transferred from PMACIC to PMA Capital in June 2004.

Segment Operating Results

Operating income (loss), which we define as net income (loss) under accounting principles generally accepted in the United States of America (GAAP) excluding net realized investment gains and losses, is the financial performance measure used by our management and Board of Directors to evaluate and assess the results of our insurance businesses. Accordingly, we report operating results by segment in the disclosures required under SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information.” Our management and Board of Directors use operating results as the measure of financial performance for our insurance operations because (i) net realized investment gains and losses are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains and losses that do not relate to the operations of the individual segments. Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

3

A reconciliation of our segment operating results as discussed below to GAAP net income (loss) is provided below.

	Three months ended						Year ended
	December 31,						December 31,
(in thousands)	2004			2003			2004			2003
Pre-tax operating income (loss):
The PMA Insurance Group	$	261		$	(9 82	)	$	13,166		$	21,541
Run-off Operations (1)		(1,946	)		11,706			5,509			(80,376	)
Corporate & Other		(5,423	)		(6,288	)		(21,223	)		(22,691	)
Net realized investment gains (losses)		(7,870	)		3,582			6,493			13,780
Pre-tax income (loss)		(14,978	)		8,018			3,945			(67,746	)
Income tax expense (benefit)		(4,665	)		28,050			2,115			25,823
Net income (loss)	$	(10,313	)	$	(20,032	)	$	1,830		$	(93,569	)

(1)   In November 2003, we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are now reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

The PMA Insurance Group

The PMA Insurance Group had pre-tax operating income of $261,000 for the fourth quarter of 2004, compared to a pre-tax operating loss of $982,000 for the same period last year. Results for the fourth quarter of 2003 included a pre-tax net charge of $7.0 million due to lower underwriting results from accident years 2001 and 2002. Pre-tax operating income was $13.2 million for full year 2004, compared to $21.5 million for 2003, primarily reflecting lower underwriting results and lower net investment income.

Net premiums written were $62.9 million and $377.8 million for the fourth quarter and full year 2004, compared with $140.8 million and $603.6 million for the same periods of 2003. Net premiums written for 2003 include $35 million of retrospectively rated premiums which were a component of the $7.0 million charge discussed above. From November 2003 until the November 2004 restoration of its A- financial strength rating, The PMA Insurance Group was rated B++ by A.M. Best, which constrained its ability to attract and retain business during 2004. Our renewal retention rate on existing workers’ compensation accounts was 62% in 2004. New business production continued in 2004, although at a lower rate than in 2003. The PMA Insurance Group continues to obtain price increases in all of its commercial lines of business, although at lower overall rates of increase than in 2003. Average rate increases for workers’ compensation business were approximately 6% in 2004.

The combined ratio on a GAAP basis in 2004 was 108.5% for the fourth quarter and 105.4% for the full year, compared to 105.6% and 102.8% for the same periods last year. The combined ratios for the fourth quarter and full year 2003 include approximately 4 points and 1 point, respectively, due to the higher than expected losses and LAE from prior accident years.The increases in the combined ratio in 2004 primarily reflect a higher total expense ratio and, to a lesser extent, overall loss trends in workers’ compensation that are rising modestly ahead of price increases. We estimate medical cost inflation, which is the primary reason for increasing loss costs in 2004, to be approximately 11%.

Net investment income was $6.5 million for the fourth quarter and $31.0 million for full year 2004, compared to $8.3 million and $32.9 million for the same periods of 2003, reflecting lower yields on the portfolio, partially offset by a higher average invested asset base for full year 2004.

4

Run-off Operations

Results of the Run-off Operations are driven principally by underwriting results from our former PMA Re operating segment. Run-off Operations also includes the results of our former excess and surplus lines business.

The Run-off Operations recorded a pre-tax operating loss of $1.9 million for the fourth quarter and pre-tax operating income of $5.5 million for full year 2004, compared to pre-tax operating income of $11.7 million for the fourth quarter of 2003 and a pre-tax operating loss of $80.4 million for full year 2003. Full year 2004 results include a charge of $6.0 million for a reinsurance agreement covering potential adverse loss development, partially offset by a gain of $2.5 million from the sale of our ownership interest in Cathedral Capital PLC. Included in results for the fourth quarter of 2003 are exit costs of $2.6 million, mainly employee termination benefits. Pre-tax operating results for full year 2003 reflect the $150 million ($97.5 million after-tax) third quarter reserve charge associated mainly with accident years 1997 to 2000.

Corporate and Other

The Corporate and Other segment includes unallocated investment income and expenses, including debt service. Corporate and Other recorded pre-tax operating losses of $5.4 million and $21.2 million for the fourth quarter and full year 2004, respectively, compared to $6.3 million and $22.7 million for the same periods last year. During the fourth quarter of 2004, we sold our interest in a partnership which owns real estate for net proceeds totaling $7.7 million, resulting in a pre-tax gain of $6.6 million, which is recorded in other revenues. Partially offsetting the gain was a pre-tax loss of $6.0 million on our convertible debt exchange which closed in November 2004. Results for the fourth quarter of 2003 included approximately $3 million of costs associated primarily with salary obligations under employment contracts with our former executive officers. Interest expense for the fourth quarter and full year 2004 increased by $531,000 and $2.5 million, respectively, over the comparable periods last year due to a higher average amount of debt outstanding in 2004, compared with 2003.

5

Conference Call with Investors

As a reminder, we will hold a conference call with investors beginning at 5:30 p.m. Eastern Time on Tuesday, February 15^th to review our 2004 results. The conference call will be available via a live webcast over the Internet at www.pmacapital.com by entering the Investor Information section, clicking on News Releases and then clicking on the microphone icon. Please note that by accessing the conference call via the Internet, you will be in a listen-only mode. The call-in numbers and passcodes for the conference call are as follows:

Live Call	Replay
800-299-0433(Domestic)	888-286-8010(Domestic)
617-801-9712(International)	617-801-6888 (International)
Passcode 89777886	Passcode 90514704

A replay of the conference call will be available over the Internet or by dialing the call-in number for the replay and using the passcode. The replay will be available from approximately 7:30 p.m. Eastern Time on Tuesday, February 15^th until 11:59 p.m. Eastern Time on Tuesday, March 15^th.

Quarterly Statistical Supplement

Our Fourth Quarter Statistical Supplement, which provides more detailed historical information about us, is available on our website. Please see the Investor Information section of our website at www.pmacapital.com . You may also obtain a copy of this supplement by sending your request to:

PMA Capital Corporation

1735 Market Street

Philadelphia, PA 19103

Attention: Investor Relations

Alternatively, you may submit your request by telephone (215-665-5046) or by e-mail to InvestorRelations@pmacapital.com. We have also furnished a copy of this news release and the Statistical Supplement to the SEC under cover of Form 8-K dated February 15, 2005. A copy of the Form 8-K is available on the SEC’s website at www.sec.gov.

6

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The statements contained in this press release, including those made by individuals authorized to speak on behalf of PMA Capital Corporation (“we”, “our” or the “Company”) 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:

·   our ability to effect an efficient withdrawal from the reinsurance business, including the commutation of reinsurance business with certain large ceding companies, without incurring any significant liabilities;

·   adverse property and casualty loss development for events that we insured in prior years, including unforeseen increases in medical costs;

·   our ability to have sufficient cash at the holding company to meet our debt service and other obligations, including any restrictions such as those imposed by the Pennsylvania Insurance Department on receiving dividends from our insurance subsidiaries in an amount sufficient to meet such obligations;

·   any future lowering or loss of one or more of our financial strength and debt ratings, and the adverse impact that any such downgrade may have on our ability to compete and to raise capital, and our liquidity and financial condition;

·   adequacy of reserves for claim liabilities;

·   regulatory or tax changes in risk-based capital or other regulatory standards that affect the cost of, or demand for, our products or otherwise affect our ability to conduct business, including any future action with respect to our business taken by the Pennsylvania Insurance Department or any other state insurance department;

·   the impact of future results on the recoverability of our deferred tax asset;

·   adequacy and collectibility of reinsurance that we purchased;

·   the outcome of any litigation against us, including the outcome of the purported class action lawsuits;

·   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;

·   ability to implement and maintain rate increases;

·   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;

·   our ability to predict and effectively manage claims related to insurance and reinsurance policies;

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

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

·   severity of natural disasters and other catastrophes, including the impact of future acts of terrorism, in connection with insurance and reinsurance policies;

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

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

·   other factors or uncertainties disclosed from time to time in our filings with the SEC.

You should not place undue reliance on any such forward-looking statements. Unless otherwise stated, we disclaim any current intention 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.

7

PMA Capital Corporation

Selected Financial Data

(Unaudited)

	Three months ended December 31,
(dollars in thousands)	2004			2003
Net premiums written:
The PMA Insurance Group	$	62,910		$	140,784
Run-off Operations (1)		(5,974	)		124,853
Corporate and Other		(264	)		(180	)
Consolidated net premiums written	$	56,672		$	265,457
Revenues:
Net premiums earned:
The PMA Insurance Group	$	89,373		$	177,474
Run-off Operations (1)		649			167,697
Corporate and Other		(264	)		(180	)
Consolidated net premiums earned		89,758			344,991
Net investment income		12,142			16,331
Realized gains (losses)		(7,870	)		3,582
Other revenues		11,018			4,466
Consolidated revenues	$	105,048		$	369,370
Components of net loss:
Pre-tax operating income (loss) (2):
The PMA Insurance Group	$	261		$	(982	)
Run-off Operations (1)		(1,946	)		11,706
Corporate and Other		(5,423	)		(6,288	)
Realized gains (losses)		(7,870	)		3,582
Pre-tax income (loss)		(14,978	)		8,018
Income tax expense (benefit)		(4,665	)		28,050
Net loss	$	(10,313	)	$	(20,032	)
Weighted average common shares outstanding:
Basic		31,350,825			31,333,881
Diluted		31,350,825			31,333,881

(1)   In November 2003, we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are now reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

(2)   Operating income (loss), which is GAAP net income (loss) excluding net realized investments gains and losses, is the financial performance measure used by our management and our Board of Directors to evaluate and assess the results of our insurance businesses. As a result, we report operating income by segment in our segment footnote disclosures as required by SFAS No. 131 “Disclosure About Segments of and Enterprise and Related Information.” We use operating income (loss) as the measure of financial performance because (i) net realized investment gains (losses) are unpredictable and not necessarily indicative of current operating fundamentals or future performance and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains (losses) that do not relate to the operations of the individual segments. Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

8

PMA Capital Corporation

Selected Financial Data

(Unaudited)

	Year ended December 31,
(dollars in thousands)	2004			2003
Net premiums written:
The PMA Insurance Group	$	377,795		$	603,593
Run-off Operations (1)		(75,360	)		589,449
Corporate and Other		(825	)		(788	)
Consolidated net premiums written	$	301,610		$	1,192,254
Revenues:
Net premiums earned:
The PMA Insurance Group	$	442,343		$	570,032
Run-off Operations (1)		77,067			628,921
Corporate and Other		(825	)		(788	)
Consolidated net premiums earned		518,585			1,198,165
Net investment income		56,945			68,923
Realized gains		6,493			13,780
Other revenues		25,941			20,379
Consolidated revenues	$	607,964		$	1,301,247
Components of net income (loss):
Pre-tax operating income (loss) (2):
The PMA Insurance Group	$	13,166		$	21,541
Run-off Operations (1)		5,509			(80,376	)
Corporate and Other		(21,223	)		(22,691	)
Realized gains		6,493			13,780
Pre-tax income (loss)		3,945			(67,746	)
Income tax expense		2,115			25,823
Net income (loss)	$	1,830		$	(93,569	)
Weighted average common shares outstanding:
Basic		31,344,858			31,330,183
Diluted		31,729,061			31,330,183

(1)   In November 2003, we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are now reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

(2)   Operating income (loss), which is GAAP net income (loss) excluding net realized investments gains and losses, is the financial performance measure used by our management and our Board of Directors to evaluate and assess the results of our insurance businesses. As a result, we report operating income by segment in our segment footnote disclosures as required by SFAS No. 131 “Disclosure About Segments of and Enterprise and Related Information.” We use operating income (loss) as the measure of financial performance because (i) net realized investment gains (losses) are unpredictable and not necessarily indicative of current operating fundamentals or future performance and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains (losses) that do not relate to the operations of the individual segments. Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

9

PMA Capital Corporation

GAAP Condensed Consolidated Balance Sheets

(Unaudited)

	December 31,			December 31,
(in thousands, except per share data)	2004			2003
Assets:
Investments and cash:
Fixed maturities available for sale	$	1,304,086		$	1,854,555
Short-term investments		123,746			151,332
Short-term investments, loaned securities collateral		-			6,300
Cash		35,537			28,963
Total investments and cash		1,463,369			2,041,150
Accrued investment income		15,517			20,870
Premiums receivable		197,831			364,125
Reinsurance receivables		1,142,552			1,220,320
Deferred income taxes		86,501			76,962
Deferred acquisition costs		31,426			83,975
Funds held by reinsureds		142,064			124,695
Other assets		174,725			255,861
Total assets	$	3,253,985		$	4,187,958
Liabilities:
Unpaid losses and loss adjustment expenses	$	2,111,598		$	2,541,318
Unearned premiums		158,489			403,708
Debt		214,467			187,566
Accounts payable, accrued expenses
and other liabilities		196,744			314,830
Funds held under reinsurance treaties		121,234			262,105
Dividends to policyholders		5,977			8,479
Payable under securities loan agreements		25			6,285
Total liabilities		2,808,534			3,724,291
Shareholders' Equity:
Class A Common stock		171,090			171,090
Additional paid-in capital		109,331			109,331
Retained earnings		213,313			216,115
Accumulated other comprehensive income (loss)		(1,959	)		19,622
Notes receivable from officers		-			(65	)
Treasury stock, at cost		(45,573	)		(52,426	)
Unearned restricted stock compensation		(751	)		-
Total shareholders' equity		445,451			463,667
Total liabilities and shareholders' equity	$	3,253,985		$	4,187,958
Shareholders' equity per share	$	14.06		$	14.80

10

PMA Capital Corporation

GAAP Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended December 31,
(in thousands, except per share data)	2004			2003
Gross premiums written	$	69,940		$	295,671
Net premiums written	$	56,672		$	265,457
Revenues:
Net premiums earned	$	89,758		$	344,991
Net investment income		12,142			16,331
Net realized investment gains (losses)		(7,870	)		3,582
Other revenues		11,018			4,466
Total revenues		105,048			369,370
Expenses:
Losses and loss adjustment expenses		70,189			266,899
Acquisition expenses		18,935			64,790
Operating expenses		19,628			32,251
Dividends to policyholders		1,819			(5,539	)
Interest expense		3,482			2,951
Loss on debt exchange		5,973			-
Total losses and expenses		120,026			361,352
Pre-tax income (loss)		(14,978	)		8,018
Income tax expense (benefit):
Current		(272	)		-
Deferred		(4,393	)		28,050
Total income tax expense (benefit)		(4,665	)		28,050
Net loss	$	(10,313	)	$	(20,032	)
Net loss per share:
Basic	$	(0.33	)	$	(0.64	)
Diluted	$	(0.33	)	$	(0.64	)

11

PMA Capital Corporation

GAAP Condensed Consolidated Statements of Operations

(Unaudited)

	Year ended December 31,
(in thousands, except per share data)	2004		2003
Gross premiums written	$	352,262	$	1,429,644
Net premiums written	$	301,610	$	1,192,254
Revenues:
Net premiums earned	$	518,585	$	1,198,165
Net investment income		56,945		68,923
Net realized investment gains		6,493		13,780
Other revenues		25,941		20,379
Total revenues		607,964		1,301,247
Expenses:
Losses and loss adjustment expenses		380,556		998,347
Acquisition expenses		115,225		256,446
Operating expenses		84,912		103,672
Dividends to policyholders		4,999		641
Interest expense		12,354		9,887
Loss on debt exchange		5,973		-
Total losses and expenses		604,019		1,368,993
Pre-tax income (loss)		3,945		(67,746	)
Income tax expense:
Current		-		-
Deferred		2,115		25,823
Total income tax expense		2,115		25,823
Net income (loss)	$	1,830	$	(93,569	)
Net income (loss) per share:
Basic	$	0.06	$	(2.99	)
Diluted	$	0.06	$	(2.99	)

12

EX-99.2

Exhibit 99.2

PMA Capital Corporation
Statistical Supplement
Fourth Quarter - 2004
Table of Contents
	Page
Consolidated Highlights:
Selected Financial Data - Fourth Quarter			1
Selected Financial Data - Full Year			2
Consolidated Statements of Operations - Per Share Data			3
Consolidated Statements of Operations - Fourth Quarter			5
Consolidated Statements of Operations - Full Year			6
Consolidated Balance Sheets			7
Invested Assets and Net Investment Income; Debt			8
Balance Sheet Impact of Commutations & Novations - Run-off Operations			9
Segment Information:
Statements of Operations - Consolidating - Full Year	11	-	12
Statements of Operations - Consolidating - Fourth Quarter	13	-	14
Statements of Operations - PMA Insurance Group			15
Insurance Ratios - PMA Insurance Group			16
Statements of Operations - Run-off Operations			17
Statements of Operations - Corporate & Other			18
Operating Cash Flow Information:
Operating Cash Flows - Consolidated			19
Operating Cash Flows - PMA Insurance Group			20
Operating Cash Flows - Run-off Operations			21
Statutory Financial Information:
Statutory Surplus; Statutory Financial Information - PMA Pool			22
Other Information:
Industry Ratings and Market Information			23
Legend:
NM - Not Meaningful
NA - Not Applicable
Note: Operating income (loss), which we define as GAAP net income (loss) excluding net realized investment gains
and losses, is the financial performance measure used by our management and Board of Directors to evaluate and
assess the results of our business segments. Accordingly, we report operating income (loss) by segment in the disclosures
required under SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." Our
management and Board of Directors use operating income (loss) as the measure of financial performance for our
business segments because (i) net realized investment gains and losses are unpredictable and not necessarily
indicative of current operating fundamentals or future performance of the business segments and (ii) in many instances,
decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains
and losses that do not relate to the operations of the individual segments. Operating income (loss) does not replace net
income (loss) as the GAAP measure of our consolidated results of operations. See pages 1 and 2 for reconciliations of
operating results by segment to GAAP net income (loss).

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
	4th			1st			2nd			3rd			4th			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			4th
	2003			2004			2004			2004			2004			Quarter
Net Premiums Written by Segment:
PMA Insurance Group	$	140,784		$	135,286		$	81,962		$	97,637		$	62,910			-55.3	%
Run-off Operations 1		124,853			23,362			(78,864	)		(13,884	)		(5,974	)		NM
Corporate & Other		(180	)		(150	)		(225	)		(186	)		(264	)		-46.7	%
Net premiums written	$	265,457		$	158,498		$	2,873		$	83,567		$	56,672			-78.7	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	(982	)	$	6,559		$	2,809		$	3,537		$	261			NM
Run-off Operations 1		11,706			8,946			624			(2,115	)		(1,946	)		NM
Corporate & Other		(6,288	)		(5,312	)		(5,506	)		(4,982	)		(5,423	)		13.8	%
Pre-tax operating income (loss)		4,436			10,193			(2,073	)		(3,560	)		(7,108	)		NM
Net realized investment gains (losses)		3,582			8,600			2,248			3,515			(7,870	)		NM
Pre-tax income (loss)		8,018			18,793			175			(45	)		(14,978	)		NM
Income tax expense (benefit)		28,050			6,640			111			29			(4,665	)		NM
Net income (loss)	$	(20,032	)	$	12,153		$	64		$	(74	)	$	(10,313	)		48.5	%
After-tax operating income (loss)	$	(22,360	)	$	6,563		$	(1,397	)	$	(2,359	)	$	(5,198	)		76.8	%
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	(0.64	)	$	0.35		$	-		$	-		$	(0.33	)		48.4	%
Less the impact of:
Realized gains (losses) after tax		0.07			0.15			0.04			0.08			(0.16	)		NM
After-tax operating income (loss)	$	(0.71	)	$	0.20		$	(0.04	)	$	(0.08	)	$	(0.17	)		76.1	%
Capitalization:
Debt	$	187,566		$	187,566		$	187,566		$	187,566		$	214,467			14.3	%
Shareholders' equity excluding FAS 115 unrealized gain		432,284			445,273			443,634			442,797			431,828			-0.1	%
Total capitalization excluding FAS 115 unrealized gain		619,850			632,839			631,200			630,363			646,295			4.3	%
FAS 115 unrealized gain		31,383			40,818			29			15,350			13,623			-56.6	%
Total capitalization including FAS 115 unrealized gain	$	651,233		$	673,657		$	631,229		$	645,713		$	659,918			1.3	%
Book Value Per Share:
Excluding FAS 115 unrealized gain	$	13.80		$	14.21		$	14.00		$	13.98		$	13.63			-1.2	%
Including FAS 115 unrealized gain	$	14.80		$	15.51		$	14.00		$	14.46		$	14.06			-5.0	%
Debt to Total Capital:
Excluding FAS 115 unrealized gain		30.2	%		29.6	%		29.7	%		29.8	%		33.2	%		9.9	%
Including FAS 115 unrealized gain		28.8	%		27.8	%		29.7	%		29.0	%		32.5	%		12.8	%
Interest Coverage:
Income before interest and income taxes
to interest expense		NM			7.39			1.06			0.98			NM			NM
Operating income before interest and income taxes
to interest expense		NM			4.47			0.30			NM			NM			NM

1 In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

1

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
	Twelve			Twelve			% Change
	Months			Months			Twelve
	2004			2003			Months
Net Premiums Written by Segment:
PMA Insurance Group	$	377,795		$	603,593			-37.4	%
Run-off Operations 1		(75,360	)		589,449			NM
Corporate & Other		(825	)		(788	)		-4.7	%
Net premiums written	$	301,610		$	1,192,254			-74.7	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	13,166		$	21,541			-38.9	%
Run-off Operations 1		5,509			(80,376	)		NM
Corporate & Other		(21,223	)		(22,691	)		6.5	%
Pre-tax operating loss		(2,548	)		(81,526	)		96.9	%
Net realized investment gains		6,493			13,780			-52.9	%
Pre-tax income (loss)		3,945			(67,746	)		NM
Income tax expense		2,115			25,823			-91.8	%
Net income (loss)	$	1,830		$	(93,569	)		NM
After-tax operating loss	$	(2,391	)	$	(102,526	)		97.7	%
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.06		$	(2.99	)		NM
Less the impact of:
Realized gains after tax		0.14			0.28			-50.0	%
After-tax operating loss	$	(0.08	)	$	(3.27	)		97.6	%

1 In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

2

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
	4th			1st		2nd			3rd			4th			Twelve			Twelve
	Quarter			Quarter		Quarter			Quarter			Quarter			Months			Months
	2003			2004		2004			2004			2004			2004			2003
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	(0.64	)	$	0.35	$	-		$	-		$	(0.33	)	$	0.06		$	(2.99	)
Pre-tax operating income (loss)	$	0.14		$	0.30	$	(0.07	)	$	(0.11	)	$	(0.23	)	$	(0.08	)	$	(2.60	)
After-tax operating income (loss)	$	(0.71	)	$	0.20	$	(0.04	)	$	(0.08	)	$	(0.17	)	$	(0.08	)	$	(3.27	)
Diluted weighted average common
shares outstanding		31,333,881			36,644,561		31,741,827			31,350,825			31,350,825			31,729,061			31,330,183
Dividends declared:
Class A Common stock	$	-		$	-	$	-		$	-		$	-		$	-		$	0.315
Actual common shares issued
and outstanding		31,334,403			31,334,403		31,692,351			31,681,751			31,676,851			31,676,851			31,334,403
Class A Common Stock prices:
High	$	14.25		$	7.08	$	9.13		$	9.16		$	10.85		$	10.85		$	15.00
Low	$	3.88		$	4.70	$	6.01		$	5.70		$	6.74		$	4.70		$	3.88
Close	$	5.12		$	6.07	$	9.00		$	7.55		$	10.35		$	10.35		$	5.12

3

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4

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
	4th			1st		2nd			3rd			4th			% Change
	Quarter			Quarter		Quarter			Quarter			Quarter			4th
	2003			2004		2004			2004			2004			Quarter
Gross Premiums Written	$	295,671		$	157,860	$	24,449		$	100,013		$	69,940			-76.3	%
Net Premiums Written	$	265,457		$	158,498	$	2,873		$	83,567		$	56,672			-78.7	%
Revenues:
Net premiums earned	$	344,991		$	206,269	$	118,348		$	104,210		$	89,758			-74.0	%
Net investment income		16,331			16,758		14,807			13,238			12,142			-25.7	%
Net realized investment gains (losses)		3,582			8,600		2,248			3,515			(7,870	)		NM
Other revenues		4,466			5,738		4,680			4,505			11,018			146.7	%
Total revenues		369,370			237,365		140,083			125,468			105,048			-71.6	%
Expenses:
Losses and loss adjustment expenses		266,899			142,190		87,471			80,706			70,189			-73.7	%
Acquisition expenses		64,790			47,235		24,968			24,087			18,935			-70.8	%
Operating expenses		32,251			24,779		23,563			16,942			19,628			-39.1	%
Dividends to policyholders		(5,539	)		1,429		946			805			1,819			NM
Interest expense		2,951			2,939		2,960			2,973			3,482			18.0	%
Loss on debt exchange		-			-		-			-			5,973			NM
Total losses and expenses		361,352			218,572		139,908			125,513			120,026			-66.8	%
Pre-tax income (loss)		8,018			18,793		175			(45	)		(14,978	)		NM
Income tax expense (benefit):
Current		-			325		64			(117	)		(272	)		NM
Deferred		28,050			6,315		47			146			(4,393	)		NM
Total income tax expense (benefit)		28,050			6,640		111			29			(4,665	)		NM
Net income (loss)	$	(20,032	)	$	12,153	$	64		$	(74	)	$	(10,313	)		48.5	%
Pre-tax operating income (loss)	$	4,436		$	10,193	$	(2,073	)	$	(3,560	)	$	(7,108	)		NM
After-tax operating income (loss)	$	(22,360	)	$	6,563	$	(1,397	)	$	(2,359	)	$	(5,198	)		76.8	%

5

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
	Twelve			Twelve			% Change
	Months			Months			Twelve
	2004			2003			Months
Gross Premiums Written	$	352,262		$	1,429,644			-75.4	%
Net Premiums Written	$	301,610		$	1,192,254			-74.7	%
Revenues:
Net premiums earned	$	518,585		$	1,198,165			-56.7	%
Net investment income		56,945			68,923			-17.4	%
Net realized investment gains		6,493			13,780			-52.9	%
Other revenues		25,941			20,379			27.3	%
Total revenues		607,964			1,301,247			-53.3	%
Expenses:
Losses and loss adjustment expenses		380,556			998,347			-61.9	%
Acquisition expenses		115,225			256,446			-55.1	%
Operating expenses		84,912			103,672			-18.1	%
Dividends to policyholders		4,999			641			NM
Interest expense		12,354			9,887			25.0	%
Loss on debt exchange		5,973			-			NM
Total losses and expenses		604,019			1,368,993			-55.9	%
Pre-tax income (loss)		3,945			(67,746	)		NM
Income tax expense:
Current		-			-			NM
Deferred		2,115			25,823			-91.8	%
Total income tax expense		2,115			25,823			-91.8	%
Net income (loss)	$	1,830		$	(93,569	)		NM
Pre-tax operating loss	$	(2,548	)	$	(81,526	)		96.9	%
After-tax operating loss	$	(2,391	)	$	(102,526	)		97.7	%

6

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
	4th			1st			2nd			3rd			4th
	Quarter			Quarter			Quarter			Quarter			Quarter
	2003			2004			2004			2004			2004
Assets:
Investments in fixed maturities available for sale	$	1,854,555		$	1,825,076		$	1,469,027		$	1,381,788		$	1,304,086
Short-term investments		151,332			98,385			88,664			98,761			123,746
Short-term investments, loaned securities collateral		6,300			112,689			129,999			96,606			-
Cash		28,963			22,311			66,100			48,046			35,537
Total investments and cash		2,041,150			2,058,461			1,753,790			1,625,201			1,463,369
Accrued investment income		20,870			22,820			17,913			16,407			15,517
Premiums receivable		364,125			316,771			249,112			219,111			197,831
Reinsurance receivables		1,220,320			1,145,314			1,210,765			1,170,004			1,142,552
Deferred income taxes		76,962			65,114			88,250			80,541			86,501
Deferred acquisition costs		83,975			71,631			41,321			37,800			31,426
Funds held by reinsureds		124,695			119,640			107,804			134,978			142,064
Other assets		255,861			231,600			248,578			219,536			174,725
Total assets	$	4,187,958		$	4,031,351		$	3,717,533		$	3,503,578		$	3,253,985
Liabilities:
Unpaid losses and loss adjustment expenses	$	2,541,318		$	2,438,509		$	2,292,281		$	2,179,900		$	2,111,598
Unearned premiums		403,708			332,391			216,155			193,221			158,489
Debt		187,566			187,566			187,566			187,566			214,467
Accounts payable, accrued expenses
and other liabilities		314,830			282,422			277,457			254,467			196,744
Funds held under reinsurance treaties		262,105			183,406			162,293			127,239			121,234
Dividends to policyholders		8,479			8,292			8,121			6,424			5,977
Payable under securities loan agreements		6,285			112,674			129,997			96,614			25
Total liabilities		3,724,291			3,545,260			3,273,870			3,045,431			2,808,534
Shareholders' Equity:
Class A Common stock		171,090			171,090			171,090			171,090			171,090
Additional paid-in capital		109,331			109,331			109,331			109,331			109,331
Retained earnings		216,115			228,268			223,442			223,519			213,313
Accumulated other comprehensive income (loss)		19,622			29,894			(13,160	)		885			(1,959	)
Notes receivable from officers		(65	)		(66	)		(59	)		-			-
Treasury stock, at cost		(52,426	)		(52,426	)		(45,261	)		(45,474	)		(45,573	)
Unearned restricted stock compensation		-			-			(1,720	)		(1,204	)		(751	)
Total shareholders' equity		463,667			486,091			443,663			458,147			445,451
Total liabilities and shareholders' equity	$	4,187,958		$	4,031,351		$	3,717,533		$	3,503,578		$	3,253,985

7

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollars in Thousands)
	4th			1st			2nd			3rd			4th			Twelve			Twelve
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2003			2004			2004			2004			2004			2004			2003
Total Investments & Cash
As reported	$	2,041,150		$	2,058,461		$	1,753,790		$	1,625,201		$	1,463,369		$	1,463,369		$	2,041,150
Less:
Securities lending activity		6,285			112,674			129,997			96,614			25			25			6,285
Unrealized gain		48,282			62,797			45			23,615			20,958			20,958			48,282
Total adjusted investments & cash	$	1,986,583		$	1,882,990		$	1,623,748		$	1,504,972		$	1,442,386		$	1,442,386		$	1,986,583
Net Investment Income
As reported	$	16,331		$	16,758		$	14,807		$	13,238		$	12,142		$	56,945		$	68,923
Funds held:
Assumed		(296	)		(13	)		109			73			846			1,015			3,996
Ceded		(3,427	)		(2,222	)		(3,962	)		(2,140	)		(1,394	)		(9,718	)		(14,404	)
Total funds held		(3,723	)		(2,235	)		(3,853	)		(2,067	)		(548	)		(8,703	)		(10,408	)
Total adjusted investment income	$	20,054		$	18,993		$	18,660		$	15,305		$	12,690		$	65,648		$	79,331
Yield
As reported		3.12	%		3.27	%		3.11	%		3.13	%		3.15	%		3.18	%		3.37	%
Investment portfolio		4.05	%		3.93	%		4.10	%		3.91	%		3.44	%		3.89	%		4.16	%
Duration (in years)		3.9			3.7			3.4			3.6			3.6			3.6			3.9

PMA Capital Corporation
Debt
(Dollars in Thousands)
	Amount
	Outstanding		Maturity
6.50% convertible debt 1	$	99,140		20222
Derivative component of 6.50% convertible debt		13,086
4.25% convertible debt 1		925		20223
8.50% senior notes		57,500		2018
Trust preferred debt 4		43,816		2033
Total long-term debt	$	214,467

¹This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share.

²Holders of the 6.50% convertible debt, at their option, may require us to repurchase all or a portion of their debentures on June 30, 2009 at 114% of the principal amount.

³Holders of the 4.25% convertible debt, at their option, may require us to repurchase all or a portion of their debentures on September 30, 2006, 2008, 2010, 2012 and 2017.

⁴Weighted average interest rate on trust preferred debt is 6.51% as of December 31, 2004.

8

	PMA Capital Corporation
	Balance Sheet Impact of Commutations & Novations - Run-off Operations 1
	(Dollars in Thousands)
			4th Quarter 2004
Assets			Assumed			Ceded			Total
Funds held by reinsureds		$	6,672		$	-		$	6,672
Other assets			(49,180	)		-			(49,180	)
Liabilities
Other liabilities		$	(69,648	)	$	-		$	(69,648	)
			Twelve Months 2004
Assets			Assumed			Ceded			Total
Reinsurance receivables		$	-		$	(63,662	)	$	(63,662	)
Funds held by reinsureds			(31,330	)		-			(31,330	)
Other assets			(48,367	)		(22,170	)		(70,537	)
Liabilities
Unpaid loss and loss adjustment expenses		$	(202,246	)	$	-		$	(202,246	)
Unearned premiums			(30,015	)		-			(30,015	)
Funds held under reinsurance treaties			(6,514	)		(75,174	)		(81,688	)
Other liabilities			(71,056	)		-			(71,056	)

¹In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

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10

PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2004
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations2			Consolidated
Gross Premiums Written	$	423,054	$	(825	)	$	(69,967	)	$	352,262
Net Premiums Written	$	377,795	$	(825	)	$	(75,360	)	$	301,610
Revenues:
Net premiums earned	$	442,343	$	(825	)	$	77,067		$	518,585
Net investment income		30,984		1,306			24,655			56,945
Other revenues		19,008		6,933			-			25,941
Operating revenues		492,335		7,414			101,722			601,471
Losses and Expenses:
Losses and loss adjustment expenses		331,181		-			49,375			380,556
Acquisition expenses		86,078		-			29,147			115,225
Operating expenses		56,911		10,310			17,691			84,912
Dividends to policyholders		4,999		-			-			4,999
Total losses and expenses		479,169		10,310			96,213			585,692
Operating income (loss) before income taxes,
interest expense, and loss on debt exchange		13,166		(2,896	)		5,509			15,779
Interest expense		-		12,354			-			12,354
Loss on debt exchange		-		5,973			-			5,973
Pre-tax operating income (loss)	$	13,166	$	(21,223	)	$	5,509			(2,548	)
Net realized investment gains										6,493
Pre-tax income									$	3,945

¹Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.

²In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re

operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off

Operations also includes the results of our former excess and surplus lines segment, Caliber One.

11

PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2003
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations2			Consolidated
Gross Premiums Written	$	678,434	$	(788	)	$	751,998		$	1,429,644
Net Premiums Written	$	603,593	$	(788	)	$	589,449		$	1,192,254
Revenues:
Net premiums earned	$	570,032	$	(788	)	$	628,921		$	1,198,165
Net investment income		32,907		1,654			34,362			68,923
Other revenues		17,493		386			2,500			20,379
Operating revenues		620,432		1,252			665,783			1,287,467
Losses and Expenses:
Losses and loss adjustment expenses		442,502		-			555,845			998,347
Acquisition expenses		90,575		-			165,871			256,446
Operating expenses		65,173		14,056			24,443			103,672
Dividends to policyholders		641		-			-			641
Total losses and expenses		598,891		14,056			746,159			1,359,106
Operating income (loss) before income taxes
and interest expense		21,541		(12,804	)		(80,376	)		(71,639	)
Interest expense		-		9,887			-			9,887
Pre-tax operating income (loss)	$	21,541	$	(22,691	)	$	(80,376	)		(81,526	)
Net realized investment gains										13,780
Pre-tax loss									$	(67,746	)

¹Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.

²In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re

operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off

Operations also includes the results of our former excess and surplus lines segment, Caliber One.

12

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2004
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations2			Consolidated
Gross Premiums Written	$	72,380	$	(264	)	$	(2,176	)	$	69,940
.
Net Premiums Written	$	62,910	$	(264	)	$	(5,974	)	$	56,672
Revenues:
Net premiums earned	$	89,373	$	(264	)	$	649		$	89,758
Net investment income		6,509		418			5,215			12,142
Other revenues		4,404		6,614			-			11,018
Operating revenues		100,286		6,768			5,864			112,918
Losses and Expenses:
Losses and loss adjustment expenses		66,284		-			3,905			70,189
Acquisition expenses		18,550		-			385			18,935
Operating expenses		13,372		2,736			3,520			19,628
Dividends to policyholders		1,819		-			-			1,819
Total losses and expenses		100,025		2,736			7,810			110,571
Operating income (loss) before income taxes,
interest expense, and loss on debt exchange		261		4,032			(1,946	)		2,347
Interest expense		-		3,482			-			3,482
Loss on debt exchange		-		5,973			-			5,973
Pre-tax operating income (loss)	$	261	$	(5,423	)	$	(1,946	)		(7,108	)
Net realized investment losses										(7,870	)
Pre-tax loss									$	(14,978	)

¹Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.

²In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re

operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off

Operations also includes the results of our former excess and surplus lines segment, Caliber One.

13

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2003
(In Thousands)
	PMA
	Insurance			Corporate			Run-off
	Group			& Other1			Operations2		Consolidated
Gross Premiums Written	$	161,487		$	(180	)	$	134,364	$	295,671
Net Premiums Written	$	140,784		$	(180	)	$	124,853	$	265,457
Revenues:
Net premiums earned	$	177,474		$	(180	)	$	167,697	$	344,991
Net investment income		8,299			48			7,984		16,331
Other revenues		4,407			59			-		4,466
Operating revenues		190,180			(73	)		175,681		365,788
Losses and Expenses:
Losses and loss adjustment expenses		154,069			-			112,830		266,899
Acquisition expenses		24,354			-			40,436		64,790
Operating expenses		18,278			3,264			10,709		32,251
Dividends to policyholders		(5,539	)		-			-		(5,539	)
Total losses and expenses		191,162			3,264			163,975		358,401
Operating income (loss) before income taxes
and interest expense		(982	)		(3,337	)		11,706		7,387
Interest expense		-			2,951			-		2,951
Pre-tax operating income (loss)	$	(982	)	$	(6,288	)	$	11,706		4,436
Net realized investment gains										3,582
Pre-tax income									$	8,018

¹Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.

²In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re

operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off

Operations also includes the results of our former excess and surplus lines segment, Caliber One.

14

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
	4th			1st		2nd		3rd		4th		Twelve		Twelve		% Change			% Change
	Quarter			Quarter		Quarter		Quarter		Quarter		Months		Months		4th			Twelve
	2003			2004		2004		2004		2004		2004		2003		Quarter			Months
Gross Premiums Written	$	161,487		$	146,486	$	94,400	$	109,788	$	72,380	$	423,054	$	678,434		-55.2	%		-37.6	%
Net Premiums Written	$	140,784		$	135,286	$	81,962	$	97,637	$	62,910	$	377,795	$	603,593		-55.3	%		-37.4	%
Revenues:
Net premiums earned	$	177,474		$	131,650	$	118,288	$	103,032	$	89,373	$	442,343	$	570,032		-49.6	%		-22.4	%
Net investment income		8,299			8,028		8,364		8,083		6,509		30,984		32,907		-21.6	%		-5.8	%
Other revenues		4,407			5,735		4,389		4,480		4,404		19,008		17,493		-0.1	%		8.7	%
Total revenues		190,180			145,413		131,041		115,595		100,286		492,335		620,432		-47.3	%		-20.6	%
Losses and Expenses:
Losses and loss adjustment expenses		154,069			98,831		88,072		77,994		66,284		331,181		442,502		-57.0	%		-25.2	%
Acquisition expenses		24,354			23,032		22,620		21,876		18,550		86,078		90,575		-23.8	%		-5.0	%
Operating expenses		18,278			15,562		16,594		11,383		13,372		56,911		65,173		-26.8	%		-12.7	%
Dividends to policyholders		(5,539	)		1,429		946		805		1,819		4,999		641		NM			NM
Total losses and expenses		191,162			138,854		128,232		112,058		100,025		479,169		598,891		-47.7	%		-20.0	%
Pre-tax operating income (loss)	$	(982	)	$	6,559	$	2,809	$	3,537	$	261	$	13,166		21,541		NM			-38.9	%

15

PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
	4th			1st			2nd			3rd			4th			Twelve			Twelve			Point Chg.			Point Chg.
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months			4th Quarter			Twelve Months
	2003			2004			2004			2004			2004			2004			2003			Better (Worse)			Better (Worse)
Ratios - GAAP Basis:
Loss and LAE ratio		86.8	%		75.1	%		74.5	%		75.7	%		74.2	%		74.9	%		77.6	%		12.6			2.7
Expense ratio:
Acquisition expenses		13.7	%		17.5	%		19.1	%		21.2	%		20.8	%		19.5	%		15.9	%		(7.1	)		(3.6	)
Operating expenses 1		8.2	%		9.2	%		11.2	%		7.8	%		11.5	%		9.9	%		9.2	%		(3.3	)		(0.7	)
Total expense ratio		21.9	%		26.7	%		30.3	%		29.0	%		32.3	%		29.4	%		25.1	%		(10.4	)		(4.3	)
Policyholders' dividend ratio		-3.1	%		1.1	%		0.8	%		0.8	%		2.0	%		1.1	%		0.1	%		(5.1	)		(1.0	)
Combined ratio		105.6	%		102.9	%		105.6	%		105.5	%		108.5	%		105.4	%		102.8	%		(2.9	)		(2.6	)
Net investment income ratio		-4.7	%		-6.1	%		-7.1	%		-7.8	%		-7.3	%		-7.0	%		-5.8	%		2.6			1.2
Operating ratio		100.9	%		96.8	%		98.5	%		97.7	%		101.2	%		98.4	%		97.0	%		(0.3	)		(1.4	)

¹ The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $14.5 million, $12.1 million, $13.2 million, $8.1 million and $10.3 million for the fourth quarter of 2003 and the first, second, third and fourth quarters of 2004, respectively.

16

PMA Capital Corporation
Statements of Operations - Run-off Operations1
(Dollar Amounts in Thousands)
	4th		1st		2nd			3rd			4th			Twelve			Twelve			% Change			% Change
	Quarter		Quarter		Quarter			Quarter			Quarter			Months			Months			4th			Twelve
	2003		2004		2004			2004			2004			2004			2003			Quarter			Months
Gross Premiums Written	$	134,364	$	11,524	$	(69,726	)	$	(9,589	)	$	(2,176	)	$	(69,967	)	$	751,998			NM			NM
Net Premiums Written	$	124,853	$	23,362	$	(78,864	)	$	(13,884	)	$	(5,974	)	$	(75,360	)	$	589,449			NM			NM
Revenues:
Net premiums earned	$	167,697	$	74,769	$	285		$	1,364		$	649		$	77,067		$	628,921			-99.6	%		-87.7	%
Net investment income		7,984		8,386		6,170			4,884			5,215			24,655			34,362			-34.7	%		-28.2	%
Other revenues		-		-		-			-			-			-			2,500			NM			-100.0	%
Total revenues		175,681		83,155		6,455			6,248			5,864			101,722			665,783			-96.7	%		-84.7	%
Losses and Expenses:
Losses and loss adjustment expenses		112,830		43,359		(601	)		2,712			3,905			49,375			555,845			-96.5	%		-91.1	%
Acquisition expenses		40,436		24,203		2,348			2,211			385			29,147			165,871			-99.0	%		-82.4	%
Operating expenses		10,709		6,647		4,084			3,440			3,520			17,691			24,443			-67.1	%		-27.6	%
Total losses and expenses		163,975		74,209		5,831			8,363			7,810			96,213			746,159			-95.2	%		-87.1	%
Pre-tax operating income (loss)	$	11,706	$	8,946	$	624		$	(2,115	)	$	(1,946	)	$	5,509			(80,376	)		NM			NM

¹In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment. As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off Operations also includes the results of our former excess and surplus lines segment, Caliber One.

17

PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
	4th			1st			2nd			3rd			4th			Twelve			Twelve			% Change			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months			4th			Twelve
	2003			2004			2004			2004			2004			2004			2003			Quarter			Months
Gross Premiums Written	$	(180	)	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(825	)	$	(788	)		-46.7	%		-4.7	%
Net Premiums Written	$	(180	)	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(825	)	$	(788	)		-46.7	%		-4.7	%
Revenues:
Net premiums earned	$	(180	)	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(825	)	$	(788	)		-46.7	%		-4.7	%
Net investment income		48			344			273			271			418			1,306			1,654			NM			-21.0	%
Other revenues		59			3			291			25			6,614			6,933			386			NM			NM
Total revenues		(73	)		197			339			110			6,768			7,414			1,252			NM			NM
Losses and Expenses:
Operating expenses		3,264			2,570			2,885			2,119			2,736			10,310			14,056			-16.2	%		-26.7	%
Total losses and expenses		3,264			2,570			2,885			2,119			2,736			10,310			14,056			-16.2	%		-26.7	%
Operating income (loss) before income taxes,
interest expense, and loss on debt exchange		(3,337	)		(2,373	)		(2,546	)		(2,009	)		4,032			(2,896	)		(12,804	)		NM			77.4	%
Interest expense		2,951			2,939			2,960			2,973			3,482			12,354			9,887			18.0	%		25.0	%
Loss on debt exchange		-			-			-			-			5,973			5,973			-			NM			NM
Pre-tax operating loss	$	(6,288	)	$	(5,312	)	$	(5,506	)	$	(4,982	)	$	(5,423	)	$	(21,223	)		(22,691	)		13.8	%		6.5	%

18

PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)
	4th		1st			2nd			3rd			4th			Twelve			Twelve
	Quarter		Quarter			Quarter			Quarter			Quarter			Months			Months
	2003		2004			2004			2004			2004			2004			2003
Receipts:
Premiums and other revenues collected	$	243,436	$	186,561		$	103,266		$	91,121		$	101,641		$	482,589		$	1,230,890
Investment income received		27,690		22,141			26,520			20,627			18,986			88,274			95,311
Total receipts		271,126		208,702			129,786			111,748			120,627			570,863			1,326,201
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		60,322		6,491			37,839			43,406			34,520			122,256			185,850
Losses and LAE paid - prior years		124,280		217,746			272,164			178,193			87,203			755,306			657,869
Total losses and LAE paid		184,602		224,237			310,003			221,599			121,723			877,562			843,719
Insurance operating expenses paid		68,280		73,845			54,695			43,228			27,716			199,484			311,637
Policyholders' dividends paid		773		1,573			873			2,145			765			5,356			6,719
Interest on corporate debt		1,798		3,686			1,856			3,694			2,371			11,607			8,366
Total disbursements		255,453		303,341			367,427			270,666			152,575			1,094,009			1,170,441
Net other		947		(7,511	)		(22,894	)		6,997			(56,713	)		(80,121	)		(6,130	)
Net operating cash flows	$	16,620	$	(102,150	)	$	(260,535	)	$	(151,921	)	$	(88,661	)	$	(603,267	)	$	149,630

19

PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)
	4th			1st			2nd			3rd			4th			Twelve			Twelve
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2003			2004			2004			2004			2004			2004			2003
Receipts:
Premiums and other revenues collected	$	147,111		$	128,216		$	123,944		$	97,543		$	111,150		$	460,853		$	557,299
Investment income received		9,433			10,246			9,869			9,574			9,851			39,540			38,068
Total receipts		156,544			138,462			133,813			107,117			121,001			500,393			595,367
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		35,923			6,157			19,158			29,827			31,304			86,446			102,852
Losses and LAE paid - prior years		56,739			75,447			63,116			57,160			31,086			226,809			257,531
Losses and LAE		92,662			81,604			82,274			86,987			62,390			313,255			360,383
Insurance operating expenses paid		35,721			52,645			38,931			34,600			29,531			155,707			132,725
Policyholders' dividends paid		773			1,573			873			2,145			765			5,356			6,719
Total disbursements		129,156			135,822			122,078			123,732			92,686			474,318			499,827
Net other		(7,150	)		(8,306	)		(8,535	)		8,102			(21,974	)		(30,713	)		(22,836	)
Net operating cash flows	$	20,238		$	(5,666	)	$	3,200		$	(8,513	)	$	6,341		$	(4,638	)	$	72,704

20

PMA Capital Corporation
Operating Cash Flows - Run-off Operations1
(In Thousands)
	4th		1st			2nd			3rd			4th			Twelve			Twelve
	Quarter		Quarter			Quarter			Quarter			Quarter			Months			Months
	2003		2004			2004			2004			2004			2004			2003
Receipts:
Premiums collected	$	96,325	$	58,345		$	(20,678	)	$	(6,422	)	$	(9,509	)	$	21,736		$	673,591
Investment income received		18,257		11,895			16,651			11,053			9,135			48,734			57,243
Total receipts		114,582		70,240			(4,027	)		4,631			(374	)		70,470			730,834
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		24,399		334			18,681			13,579			3,216			35,810			82,998
Losses and LAE paid - prior years		67,541		142,299			209,048			121,033			56,117			528,497			400,338
Total losses and LAE paid		91,940		142,633			227,729			134,612			59,333			564,307			483,336
Insurance operating expenses paid		32,559		21,200			15,764			8,628			(1,815	)		43,777			178,912
Total disbursements		124,499		163,833			243,493			143,240			57,518			608,084			662,248
Net other		12,494		1,860			(13,311	)		282			(34,482	)		(45,651	)		21,002
Net operating cash flows	$	2,577	$	(91,733	)	$	(260,831	)	$	(138,327	)	$	(92,374	)	$	(583,265	)	$	89,588

¹In November 2003 we announced our decision to withdraw from the reinsurance business previously served by our PMA Re operating segment.

As a result of this decision, the results of PMA Re are reported as Run-off Operations. Run-off Operations also includes the results of our

former excess and surplus lines segment, Caliber One.

21

PMA Capital Corporation
Statutory Surplus
(In Thousands)
	4th			1st			2nd		3rd		4th
	Quarter			Quarter			Quarter		Quarter		Quarter
	2003			2004			2004		2004		20041
PMA Pool 2	$	296,777		$	296,785		$	305,074	$	294,587	$	300,034	5
PMA Capital Insurance Company 3		500,617	4		517,143	4		236,247		236,443		224,511	5

PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(In Thousands)
	4th			1st			2nd			3rd			4th			Twelve			Twelve
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2003			2004			2004			20041			20041			20041			2003
Net Premiums Written:
Workers Compensation & Integrated
Disability	$	77,362		$	106,190		$	56,764		$	88,814		$	54,556		$	306,324		$	432,453
Other Commercial Lines		14,386			11,915			8,275			8,962			3,700			32,852			85,979
Total - PMA Pool	$	91,748		$	118,105		$	65,039		$	97,776		$	58,256		$	339,176		$	518,432
Statutory Ratios:
Loss and LAE ratio		87.2	%		74.9	%		75.2	%		75.9	%		75.2	%		75.3	%		78.0	%
Underwriting expense ratio		34.6	%		27.1	%		39.0	%		29.5	%		37.5	%		31.9	%		26.2	%
Policyholders' dividend ratio		-3.4	%		1.2	%		0.7	%		0.4	%		0.4	%		0.7	%		0.0	%
Combined ratio		118.4	%		103.2	%		114.9	%		105.8	%		113.1	%		107.9	%		104.2	%
Operating ratio		113.9	%		96.5	%		107.4	%		98.9	%		104.2	%		100.5	%		97.3	%

¹Estimated.

²The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company.

³In November 2003, we announced our decision to withdraw from the reinsurance business previously served by PMA Capital Insurance Company. The reinsurance business is currently in run-off.

⁴Includes the statutory surplus of the PMA Pool.

⁵Includes unassigned surplus of $130.7 million and $31.0 million for the PMA Pool and PMA Capital Insurance Company, respectively.

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PMA Capital Corporation
Industry Ratings and Market Information
Transfer Agent and Registrar:	Securities Listing:
Certificate Transfers and Conversions:	The Corporation's Class A Common Stock is listed
The Bank of New York	on the NASDAQ Stock Market®. It trades under
Receive and Deliver Department - 11 W	the stock symbol: PMACA.
P.O. Box 11002
Church Street Station	Inquiries:
New York, NY 10286	William E. Hitselberger
	Chief Financial Officer
Written Inquiries:	215.665.5070
The Bank of New York	e-mail: bhitselberger@pmacapital.com
Shareholder Relations Department - 11 E
P.O. Box 11258	Investor Relations
Church Street Station	215.665.5046
New York, NY 10286	investorrelations@pmacapital.com
Phone Inquiries:	Company Website:
800.524.4458	http://www.pmacapital.com
Email Inquiries:
shareowner-svcs@bankofny.com

Financial Strength Ratings (as of 2/14/2005):
	A.M. Best		Moody's
PMA Pool 1		A- (4th of 16)		Ba1 (11th of 21)
PMA Capital Insurance Company 2		B+ (6th of 16)		B1 (14th of 21)

¹ The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company.

² In November 2003, we announced our decision to withdraw from the reinsurance business previously served by PMA Capital Insurance Company. The reinsurance business is currently in run-off.

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