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) May 4, 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):

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

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

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

oٱ 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 May 4, 2005, the registrant issued a news release regarding its First Quarter 2005 results, a copy of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference, and the registrant’s First Quarter 2005 Statistical Supplement 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 May 4, 2005
Exhibit 99.2	PMA Capital Corporation First Quarter 2005 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
May 4, 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 May 4, 2005
Exhibit 99.2	PMA Capital Corporation First Quarter 2005 Statistical Supplement

EX-99.1

Exhibit 99.1

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

PMA Capital Announces First Quarter 2005 Results

Blue Bell, PA, May 4, 2005 - -- PMA Capital Corporation (NASDAQ: PMACA) today announced financial results for the first quarter of 2005. PMA Capital had a net loss of $20.6 million, or 65 cents per share, compared to net income of $12.2 million, or 35 cents per diluted share, for the same period last year. Total assets were $3.3 billion as of both March 31, 2005 and December 31, 2004. Shareholders’ equity was $413.9 million as of March 31, 2005, compared with $445.5 million as of December 31, 2004. Book value per share was $13.00 as of March 31, 2005, compared to $14.06 at year-end 2004.

The net loss for the first quarter of 2005 included an after-tax charge of $23 million ($30 million pre-tax), or 73 cents per share, for prior year loss development at the Run-off Operations. The charge is primarily related to construction defects business from accident years 1998 to 2001 written by our former excess and surplus lines operation and pro rata professional liability reinsurance business from accident years 1997 to 2001.

Results for the first quarter of 2005 included after-tax net realized investment gains of $1.9 million, or six cents per share, compared to $5.6 million, or 15 cents per diluted share, for the same period last year. After-tax net realized investment gains for 2005 included $1.6 million for the decrease in the fair value of the derivative component of our 6.50% Convertible Debt. The dilutive effect of our convertible debt reduced net income by four cents per share in 2004, while not affecting 2005 results.

Consolidated revenues were $107.4 million for the first quarter of 2005, compared to $237.4 million for the same period in 2004, primarily due to lower net premiums earned resulting from the run-off of our reinsurance business and, to a lesser extent, lower earned premiums at The PMA Insurance Group.

The PMA Insurance Group’s A.M. Best financial strength rating was restored to A- (Excellent) on November 15, 2004. We expect to see this ratings change result in increased written premiums as the year progresses, compared to 2004. We expect the increase in direct premiums written for the full year will be between 5% and 7%, compared to 2004.

Vincent T. Donnelly, President and Chief Executive Officer, commented, “In the first quarter of 2005, we saw an increase in claim activity on construction defects business written by our former excess and surplus lines operation. We have reserved 100% of the policy liability limits plus an increased provision for defense costs for losses associated with a specific group of six policies that account for a majority of

this higher than expected claim activity, and we have increased reserves on the other construction defects policies that have not had the same level of claim activity. We also saw an increase in reported losses and continued volatility in pro rata professional liability business written by our former reinsurance operation. The adverse development cover that we purchased in 2004 limited the effect of the reserve charge on our statutory capital to $6.7 million. We will recognize the benefit of this reinsurance on a GAAP basis in future periods as the losses are settled. We intend to seek to reduce our capital commitment to the Run-off Operations in 2006.”

Mr. Donnelly continued, “The PMA Insurance Group was profitable during the first quarter of 2005. We wrote more new business at The PMA Insurance Group, with new business increasing to $24.0 million in the first quarter of 2005 from $16.6 million in the first quarter of last year. Our renewal retention rate in the first quarter of 2005 was comparable to the rate for the same period last year. Our written premiums in the first quarter were affected by the loss of a large account in January and the fact that the November 15, 2004 restoration of the A- financial strength rating was relatively late for January 1 renewals. We were pleased to see, however, that our retention rates improved significantly as the first quarter progressed and such improvement continued through April, and we enter the second quarter with positive momentum in both new and renewal business.”

Financial Condition

The decreases in shareholders’ equity and book value per share are primarily due to the net loss in the quarter and lower net unrealized gains on our investment portfolio. Net unrealized holding gains were $1.5 million, or five cents per share, as of March 31, 2005, compared to $13.6 million, or 43 cents per share, at year-end 2004, mainly due to higher market interest rates. At March 31, 2005, we had $20.6 million in cash and short-term investments at the holding company and its non-regulated subsidiaries.

As of March 31, 2005, our total outstanding debt had decreased to $211.8 million, compared to $214.5 million at December 31, 2004, due to the change in the fair value of the derivative component of the convertible debt during 2005. The components of our debt as of March 31, 2005 were as follows:

(dollar amounts in thousands)	Amount		Maturity
6.50% Convertible debt	$	99,140		2022	1
Derivative component of 6.50% Convertible debt		10,658
4.25% Convertible debt2		655		2022
8.50% Senior notes		57,500		2018
Trust preferred debt		43,816		2033
Total long-term debt	$	211,769

(1)   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. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share for $84.1 million principal amount and $15.891 for $15.0 million principal amount.

(2)   We retired $270,000 of this debt through open market purchases in the first quarter of 2005. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share.

The PMA Insurance Group had statutory surplus of $298.7 million at March 31, 2005, compared to $300.0 million at December 31, 2004. The PMA Insurance Group has the ability to pay $23.5 million in dividends during 2005 without the prior approval of the Pennsylvania Insurance Department. The

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statutory surplus of PMA Capital Insurance Company, PMA Capital Corporation’s directly held reinsurance subsidiary, was $218.3 million at March 31, 2005, compared to $224.5 million at December 31, 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.

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

	Three months ended
	March 31,
(in thousands)	2005			2004
Pre-tax operating income (loss):
The PMA Insurance Group	$	6,612		$	6,559
Run-off Operations		(29,646	)		8,946
Corporate & Other		(6,167	)		(5,312	)
Net realized investment gains		2,983			8,600
Pre-tax income (loss)		(26,218	)		18,793
Income tax expense (benefit)		(5,667	)		6,640
Net income (loss)	$	(20,551	)	$	12,153

The PMA Insurance Group

The PMA Insurance Group had pre-tax operating income of $6.6 million for the first quarters of both 2005 and 2004.

Net premiums written were $105.5 million for the first quarter of 2005, compared to $135.3 million for the first quarter last year. We wrote $24.0 million of new business in the first quarter of 2005, up from $16.6 million for the same period last year. Our renewal retention rate on existing workers’ compensation accounts was 62% for the first quarter of 2005, essentially flat compared to the first quarter of 2004. The flat retention rate was mainly due to the loss of a large account in January that switched brokers, which reduced the retention rate by approximately eight points. In addition, the restoration of our A- rating in mid-November 2004 occurred relatively late for January 1 renewals. However, retention rates improved significantly as the first quarter progressed and such improvement continued through April. The PMA Insurance Group continues to obtain price increases in all commercial lines of business, with average workers’ compensation rate increases of approximately 6% so far in 2005.

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The combined ratio on a GAAP basis was 103.4% for the first quarter of 2005, up moderately from 102.9% for the first quarter last year. The increase in the combined ratio for the first quarter of 2005, compared to the first quarter last year, primarily reflects an increase in the total expense ratio, partially offset by an improved loss and LAE ratio.

The increase in the total expense ratio in the first quarter of 2005, compared to the same period last year, is mainly due to the impact on the ratio of lower net premiums earned. The PMA Insurance Group has reduced overall expenses in the first quarter of 2005, compared to the first quarter last year. The improved loss and LAE ratio primarily reflects a better current accident year loss and LAE ratio. Price increases and payroll inflation have offset an increase in overall loss trends in workers' compensation. We estimate our medical cost inflation for 2005 to be approximately 11%. In addition, the loss ratio has benefited from our continued emphasis on managed care initiatives and a change in the geographic mix of our business.

Net investment income was $7.5 million for the first quarter of 2005, compared to $8.0 million for the same period of 2004, reflecting lower yields and a lower average invested asset base.

Run-off Operations

Run-off Operations includes the results of our former reinsurance and excess and surplus lines businesses.

The Run-off Operations had a pre-tax operating loss of $29.6 million for the first quarter of 2005, compared to pre-tax operating income of $8.9 million for the same period last year. Results for the first quarter of 2005 included a charge of $30 million for prior year loss development, primarily related to construction defects business from accident years 1998 to 2001 written by our former excess and surplus lines operation and pro rata professional liability business from accident years 1997 to 2001 written by our former reinsurance operation. Net premiums earned, losses and LAE, and acquisition and operating expenses decreased significantly in the first quarter of 2005, compared to 2004, due to our exit from the reinsurance business.

Corporate and Other

The Corporate and Other segment primarily includes corporate expenses, including debt service. Corporate and Other had a pre-tax operating loss of $6.2 million for the first quarter of 2005, compared to $5.3 million for the same period last year. Interest expense for the first quarter of 2005 increased by $1.0 million, compared to the same period last year, due to a higher average amount of debt outstanding and higher interest rates on our convertible debt.

Quiet Period

During the quarter, PMA Capital corporate representatives may reiterate the guidance provided in this release both publicly and in meetings with investors, analysts, the media and others. Beginning upon the close of business on July 15, 2005 until such time as PMA Capital releases its second quarter earnings release PMA Capital will observe a “quiet period.” From and after commencement of the quiet period, the guidance contained in this release should be considered historical, speaking as of prior to the quiet period only and not subject to update by PMA Capital. During the quiet period, our spokespersons will not comment on our financial results or expectations other than through a press release or other publicly available document.

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Conference Call with Investors

As a reminder, we will hold a conference call with investors from 8:00 a.m. until 8:45 a.m. Eastern Time on Thursday, May 5^th to review our first quarter 2005 results. The conference call will be available via a live webcast over the Internet at www.pmacapital.com. To access the webcast, enter the Investor Information section, click on News Releases and then click on the microphone icon labeled “Q1 2005 PMA Capital Corporation Earnings Conference Call.” 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
800-299-7098(Domestic)	888-286-8010(Domestic)
617-801-9715(International)	617-801-6888 (International)
Passcode 97000283	Passcode 26451262

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 12:00 p.m. Eastern Time on Thursday, May 5^th until 11:59 p.m. Eastern Time on June 5^th.

Quarterly Statistical Supplement

Our First 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 May 4, 2005. A copy of the Form 8-K is available on the SEC’s website at www.sec.gov.

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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 additional 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;

·   our ability to increase the amount of new and renewal business written by The PMA Insurance Group at adequate prices;

·   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 and collectibility of reinsurance that we purchased;

·   adequacy of reserves for claim liabilities;

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

·   regulatory 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;

·   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;

·   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 whether TRIA is extended beyond its December 31, 2005 termination date; and

·   other factors or uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission.

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.

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PMA Capital Corporation

Selected Financial Data

(Unaudited)

	Three months ended March 31,
(dollars in thousands)	2005			2004
Net premiums written:
The PMA Insurance Group	$	105,474		$	135,286
Run-off Operations		4,929			23,362
Corporate and Other		(194	)		(150	)
Consolidated net premiums written	$	110,209		$	158,498
Revenues:
Net premiums earned:
The PMA Insurance Group	$	84,700		$	131,650
Run-off Operations		3,217			74,769
Corporate and Other		(194	)		(150	)
Consolidated net premiums earned		87,723			206,269
Net investment income		11,712			16,758
Realized gains		2,983			8,600
Other revenues		4,954			5,738
Consolidated revenues	$	107,372		$	237,365
Components of net income (loss):
Pre-tax operating income (loss) (1):
The PMA Insurance Group	$	6,612		$	6,559
Run-off Operations		(29,646	)		8,946
Corporate and Other		(6,167	)		(5,312	)
Realized gains		2,983			8,600
Pre-tax income (loss)		(26,218	)		18,793
Income tax expense (benefit)		(5,667	)		6,640
Net income (loss)	$	(20,551	)	$	12,153
Weighted average common shares outstanding:
Basic		31,561,069			31,334,403
Diluted		31,561,069			36,644,561

(1) 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.

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PMA Capital Corporation

GAAP Condensed Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
(in thousands, except per share data)	2005			2004
Assets:
Investments:
Fixed maturities available for sale	$	1,283,406		$	1,304,086
Short-term investments		60,325			123,746
Short-term investments, loaned securities collateral		102,620			-
Total investments		1,446,351			1,427,832
Cash		49,921			35,537
Accrued investment income		15,188			15,517
Premiums receivable		208,748			197,831
Reinsurance receivables		1,129,507			1,142,552
Deferred income taxes		98,714			86,501
Deferred acquisition costs		35,138			31,426
Funds held by reinsureds		146,674			142,064
Other assets		167,200			174,725
Total assets	$	3,297,441		$	3,253,985
Liabilities:
Unpaid losses and loss adjustment expenses	$	2,077,599		$	2,111,598
Unearned premiums		177,415			158,489
Debt		211,769			214,467
Accounts payable, accrued expenses
and other liabilities		196,875			196,744
Funds held under reinsurance treaties		112,712			121,234
Dividends to policyholders		4,580			5,977
Payable under securities loan agreements		102,603			25
Total liabilities		2,883,553			2,808,534
Shareholders' Equity:
Class A Common stock		171,090			171,090
Additional paid-in capital		109,331			109,331
Retained earnings		189,787			213,313
Accumulated other comprehensive loss		(14,116	)		(1,959	)
Treasury stock, at cost		(41,752	)		(45,573	)
Unearned restricted stock compensation		(452	)		(751	)
Total shareholders' equity		413,888			445,451
Total liabilities and shareholders' equity	$	3,297,441		$	3,253,985
Shareholders' equity per share	$	13.00		$	14.06

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PMA Capital Corporation

GAAP Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended March 31,
(in thousands, except per share data)	2005			2004
Gross premiums written	$	121,313		$	157,860
Net premiums written	$	110,209		$	158,498
Revenues:
Net premiums earned	$	87,723		$	206,269
Net investment income		11,712			16,758
Net realized investment gains		2,983			8,600
Other revenues		4,954			5,738
Total revenues		107,372			237,365
Expenses:
Losses and loss adjustment expenses		93,988			142,190
Acquisition expenses		18,671			47,235
Operating expenses		16,460			24,779
Dividends to policyholders		502			1,429
Interest expense		3,969			2,939
Total losses and expenses		133,590			218,572
Pre-tax income (loss)		(26,218	)		18,793
Income tax expense (benefit):
Current		-			325
Deferred		(5,667	)		6,315
Total income tax expense (benefit)		(5,667	)		6,640
Net income (loss)	$	(20,551	)	$	12,153
Net income (loss) per share:
Basic	$	(0.65	)	$	0.39
Diluted	$	(0.65	)	$	0.35

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EX-99.2

Exhibit 99.2

PMA Capital Corporation
Statistical Supplement
First Quarter - 2005
Table of Contents
	Page
Consolidated Highlights:
Selected Financial Data		1
Consolidated Statements of Operations - Per Share Data		2
Consolidated Statements of Operations		3
Consolidated Balance Sheets		4
Invested Assets and Net Investment Income; Debt		5
Segment Information:
Statements of Operations - Consolidating		7 - 8
Statements of Operations - PMA Insurance Group		9
Insurance Ratios - PMA Insurance Group		10
Statements of Operations - Run-off Operations		11
Statements of Operations - Corporate & Other		12
Operating Cash Flow Information:
Operating Cash Flows - Consolidated		13
Operating Cash Flows - PMA Insurance Group		14
Operating Cash Flows - Run-off Operations		15
Statutory Financial Information:
Statutory Surplus; Statutory Financial Information - PMA Pool		16
Other Information:
Industry Ratings and Market Information		17
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 page 1 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)
	1st			2nd			3rd			4th			1st			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			1st
	2004			2004			2004			2004			2005			Quarter
Net Premiums Written by Segment:
PMA Insurance Group	$	135,286		$	81,962		$	97,637		$	62,910		$	105,474			-22.0	%
Run-off Operations		23,362			(78,864	)		(13,884	)		(5,974	)		4,929			-78.9	%
Corporate & Other		(150	)		(225	)		(186	)		(264	)		(194	)		-29.3	%
Net premiums written	$	158,498		$	2,873		$	83,567		$	56,672		$	110,209			-30.5	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	6,559		$	2,809		$	3,537		$	261		$	6,612			0.8	%
Run-off Operations		8,946			624			(2,115	)		(1,946	)		(29,646	)		NM
Corporate & Other		(5,312	)		(5,506	)		(4,982	)		(5,423	)		(6,167	)		-16.1	%
Pre-tax operating income (loss)		10,193			(2,073	)		(3,560	)		(7,108	)		(29,201	)		NM
Net realized investment gains (losses)		8,600			2,248			3,515			(7,870	)		2,983			-65.3	%
Pre-tax income (loss)		18,793			175			(45	)		(14,978	)		(26,218	)		NM
Income tax expense (benefit)		6,640			111			29			(4,665	)		(5,667	)		NM
Net income (loss)	$	12,153		$	64		$	(74	)	$	(10,313	)	$	(20,551	)		NM
After-tax operating income (loss)	$	6,563		$	(1,397	)	$	(2,359	)	$	(5,198	)	$	(22,490	)		NM
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.35		$	-		$	-		$	(0.33	)	$	(0.65	)		NM
Less the impact of:
Realized gains (losses) after tax		0.15			0.04			0.08			(0.16	)		0.06			-60.0	%
After-tax operating income (loss)	$	0.20		$	(0.04	)	$	(0.08	)	$	(0.17	)	$	(0.71	)		NM
Capitalization:
Debt	$	187,566		$	187,566		$	187,566		$	214,467		$	211,769			12.9	%
Shareholders' equity excluding FAS 115 unrealized gain		445,273			443,634			442,797			431,828			412,349			-7.4	%
Total capitalization excluding FAS 115 unrealized gain		632,839			631,200			630,363			646,295			624,118			-1.4	%
FAS 115 unrealized gain		40,818			29			15,350			13,623			1,539			-96.2	%
Total capitalization including FAS 115 unrealized gain	$	673,657		$	631,229		$	645,713		$	659,918		$	625,657			-7.1	%
Book Value Per Share:
Excluding FAS 115 unrealized gain	$	14.21		$	14.00		$	13.98		$	13.63		$	12.95			-8.9	%
Including FAS 115 unrealized gain	$	15.51		$	14.00		$	14.46		$	14.06		$	13.00			-16.2	%
Debt to Total Capital:
Excluding FAS 115 unrealized gain		29.6	%		29.7	%		29.8	%		33.2	%		33.9	%		14.5	%
Including FAS 115 unrealized gain		27.8	%		29.7	%		29.0	%		32.5	%		33.8	%		21.6	%
Interest Coverage:
Income before interest and income taxes to interest expense		7.39			1.06			0.98			NM			NM			NM
Operating income before interest and income taxes to interest expense		4.47			0.30			NM			NM			NM			NM

1

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
	1st		2nd			3rd			4th			1st
	Quarter		Quarter			Quarter			Quarter			Quarter
	2004		2004			2004			2004			2005
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.35	$	-		$	-		$	(0.33	)	$	(0.65	)
Pre-tax operating income (loss)	$	0.30	$	(0.07	)	$	(0.11	)	$	(0.23	)	$	(0.93	)
After-tax operating income (loss)	$	0.20	$	(0.04	)	$	(0.08	)	$	(0.17	)	$	(0.71	)
Diluted weighted average common
shares outstanding		36,644,561		31,741,827			31,350,825			31,350,825			31,561,069
Dividends declared:
Class A Common stock	$	-	$	-		$	-		$	-		$	-
Actual common shares issued
and outstanding		31,334,403		31,692,351			31,681,751			31,676,851			31,835,136
Class A Common Stock prices:
High	$	7.08	$	9.13		$	9.16		$	10.85		$	10.65
Low	$	4.70	$	6.01		$	5.70		$	6.74		$	7.05
Close	$	6.07	$	9.00		$	7.55		$	10.35		$	8.00

2

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
	1st		2nd			3rd			4th			1st			% Change
	Quarter		Quarter			Quarter			Quarter			Quarter			1st
	2004		2004			2004			2004			2005			Quarter
Gross Premiums Written	$	157,860	$	24,449		$	100,013		$	69,940		$	121,313			-23.2	%
Net Premiums Written	$	158,498	$	2,873		$	83,567		$	56,672		$	110,209			-30.5	%
Revenues:
Net premiums earned	$	206,269	$	118,348		$	104,210		$	89,758		$	87,723			-57.5	%
Net investment income		16,758		14,807			13,238			12,142			11,712			-30.1	%
Net realized investment gains (losses)		8,600		2,248			3,515			(7,870	)		2,983			-65.3	%
Other revenues		5,738		4,680			4,505			11,018			4,954			-13.7	%
Total revenues		237,365		140,083			125,468			105,048			107,372			-54.8	%
Expenses:
Losses and loss adjustment expenses		142,190		87,471			80,706			70,189			93,988			-33.9	%
Acquisition expenses		47,235		24,968			24,087			18,935			18,671			-60.5	%
Operating expenses		24,779		23,563			16,942			19,628			16,460			-33.6	%
Dividends to policyholders		1,429		946			805			1,819			502			-64.9	%
Interest expense		2,939		2,960			2,973			3,482			3,969			35.0	%
Loss on debt exchange		-		-			-			5,973			-			NM
Total losses and expenses		218,572		139,908			125,513			120,026			133,590			-38.9	%
Pre-tax income (loss)		18,793		175			(45	)		(14,978	)		(26,218	)		NM
Income tax expense (benefit):
Current		325		64			(117	)		(272	)		-			-100.0	%
Deferred		6,315		47			146			(4,393	)		(5,667	)		NM
Total income tax expense (benefit)		6,640		111			29			(4,665	)		(5,667	)		NM
Net income (loss)	$	12,153	$	64		$	(74	)	$	(10,313	)	$	(20,551	)		NM
Pre-tax operating income (loss)	$	10,193	$	(2,073	)	$	(3,560	)	$	(7,108	)	$	(29,201	)		NM
After-tax operating income (loss)	$	6,563	$	(1,397	)	$	(2,359	)	$	(5,198	)	$	(22,490	)		NM

3

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2004			2004			2004			2004			2005
Assets:
Investments in fixed maturities available for sale	$	1,825,076		$	1,469,027		$	1,381,788		$	1,304,086		$	1,283,406
Short-term investments		98,385			88,664			98,761			123,746			60,325
Short-term investments, loaned securities collateral		112,689			129,999			96,606			-			102,620
Total investments		2,036,150			1,687,690			1,577,155			1,427,832			1,446,351
Cash		22,311			66,100			48,046			35,537			49,921
Accrued investment income		22,820			17,913			16,407			15,517			15,188
Premiums receivable		316,771			249,112			219,111			197,831			208,748
Reinsurance receivables		1,145,314			1,210,765			1,170,004			1,142,552			1,129,507
Deferred income taxes		65,114			88,250			80,541			86,501			98,714
Deferred acquisition costs		71,631			41,321			37,800			31,426			35,138
Funds held by reinsureds		119,640			107,804			134,978			142,064			146,674
Other assets		231,600			248,578			219,536			174,725			167,200
Total assets	$	4,031,351		$	3,717,533		$	3,503,578		$	3,253,985		$	3,297,441
Liabilities:
Unpaid losses and loss adjustment expenses	$	2,438,509		$	2,292,281		$	2,179,900		$	2,111,598		$	2,077,599
Unearned premiums		332,391			216,155			193,221			158,489			177,415
Debt		187,566			187,566			187,566			214,467			211,769
Accounts payable, accrued expenses
and other liabilities		282,422			277,457			254,467			196,744			196,875
Funds held under reinsurance treaties		183,406			162,293			127,239			121,234			112,712
Dividends to policyholders		8,292			8,121			6,424			5,977			4,580
Payable under securities loan agreements		112,674			129,997			96,614			25			102,603
Total liabilities		3,545,260			3,273,870			3,045,431			2,808,534			2,883,553
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		228,268			223,442			223,519			213,313			189,787
Accumulated other comprehensive income (loss)		29,894			(13,160	)		885			(1,959	)		(14,116	)
Notes receivable from officers		(66	)		(59	)		-			-			-
Treasury stock, at cost		(52,426	)		(45,261	)		(45,474	)		(45,573	)		(41,752	)
Unearned restricted stock compensation		-			(1,720	)		(1,204	)		(751	)		(452	)
Total shareholders' equity		486,091			443,663			458,147			445,451			413,888
Total liabilities and shareholders' equity	$	4,031,351		$	3,717,533		$	3,503,578		$	3,253,985		$	3,297,441

4

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollars in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2004			2004			2004			2004			2005
Total Investments & Cash
As reported	$	2,058,461		$	1,753,790		$	1,625,201		$	1,463,369		$	1,496,272
Less:
Securities lending activity		112,674			129,997			96,614			25			102,603
Unrealized gain		62,797			45			23,615			20,958			2,368
Total adjusted investments & cash	$	1,882,990		$	1,623,748		$	1,504,972		$	1,442,386		$	1,391,301
Net Investment Income
As reported	$	16,758		$	14,807		$	13,238		$	12,142		$	11,712
Funds held:
Assumed		(13	)		109			73			846			187
Ceded		(2,222	)		(3,962	)		(2,140	)		(1,394	)		(2,125	)
Total funds held		(2,235	)		(3,853	)		(2,067	)		(548	)		(1,938	)
Total adjusted investment income	$	18,993		$	18,660		$	15,305		$	12,690		$	13,650
Yield
As reported		3.27	%		3.11	%		3.13	%		3.15	%		3.17	%
Investment portfolio		3.93	%		4.10	%		3.91	%		3.44	%		3.85	%
Duration (in years)		3.7			3.4			3.6			3.6			3.8

PMA Capital Corporation
Debt
(Dollars in Thousands)
	Amount
	Outstanding		Maturity
6.50% convertible debt	$	99,140		20221
Derivative component of 6.50% convertible debt		10,658
4.25% convertible debt		655		20222
8.50% senior notes		57,500		2018
Trust preferred debt 3		43,816		2033
Total long-term debt	$	211,769

1	Holders of this 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. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share for $84.1 million principal amount and $15.891 per share for $15.0 million principal amount.
2	Holders of this 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. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share.
3	Weighted average interest rate on trust preferred debt is 7.03% as of March 31, 2005.

5

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6

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended March 31, 2005
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	116,272	$	(194	)	$	5,235		$	121,313
Net Premiums Written	$	105,474	$	(194	)	$	4,929		$	110,209
Revenues:
Net premiums earned	$	84,700	$	(194	)	$	3,217		$	87,723
Net investment income		7,541		271			3,900			11,712
Other revenues		4,727		227			-			4,954
Operating revenues		96,968		304			7,117			104,389
Losses and Expenses:
Losses and loss adjustment expenses		62,218		-			31,770			93,988
Acquisition expenses		16,767		-			1,904			18,671
Operating expenses		10,869		2,502			3,089			16,460
Dividends to policyholders		502		-			-			502
Total losses and expenses		90,356		2,502			36,763			129,621
Operating income (loss) before income taxes
and interest expense		6,612		(2,198	)		(29,646	)		(25,232	)
Interest expense		-		3,969			-			3,969
Pre-tax operating income (loss)	$	6,612	$	(6,167	)	$	(29,646	)		(29,201	)
Net realized investment gains										2,983
Pre-tax loss									$	(26,218	)

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

7

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended March 31, 2004
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations		Consolidated
Gross Premiums Written	$	146,486	$	(150	)	$	11,524	$	157,860
Net Premiums Written	$	135,286	$	(150	)	$	23,362	$	158,498
Revenues:
Net premiums earned	$	131,650	$	(150	)	$	74,769	$	206,269
Net investment income		8,028		344			8,386		16,758
Other revenues		5,735		3			-		5,738
Operating revenues		145,413		197			83,155		228,765
Losses and Expenses:
Losses and loss adjustment expenses		98,831		-			43,359		142,190
Acquisition expenses		23,032		-			24,203		47,235
Operating expenses		15,562		2,570			6,647		24,779
Dividends to policyholders		1,429		-			-		1,429
Total losses and expenses		138,854		2,570			74,209		215,633
Operating income (loss) before income taxes
and interest expense		6,559		(2,373	)		8,946		13,132
Interest expense		-		2,939			-		2,939
Pre-tax operating income (loss)	$	6,559	$	(5,312	)	$	8,946		10,193
Net realized investment gains									8,600
Pre-tax income								$	18,793

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

8

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
	1st		2nd		3rd		4th		1st		% Change
	Quarter		Quarter		Quarter		Quarter		Quarter		1st
	2004		2004		2004		2004		2005		Quarter
Gross Premiums Written	$	146,486	$	94,400	$	109,788	$	72,380	$	116,272		-20.6	%
Net Premiums Written	$	135,286	$	81,962	$	97,637	$	62,910	$	105,474		-22.0	%
Revenues:
Net premiums earned	$	131,650	$	118,288	$	103,032	$	89,373	$	84,700		-35.7	%
Net investment income		8,028		8,364		8,083		6,509		7,541		-6.1	%
Other revenues		5,735		4,389		4,480		4,404		4,727		-17.6	%
Total revenues		145,413		131,041		115,595		100,286		96,968		-33.3	%
Losses and Expenses:
Losses and loss adjustment expenses		98,831		88,072		77,994		66,284		62,218		-37.0	%
Acquisition expenses		23,032		22,620		21,876		18,550		16,767		-27.2	%
Operating expenses		15,562		16,594		11,383		13,372		10,869		-30.2	%
Dividends to policyholders		1,429		946		805		1,819		502		-64.9	%
Total losses and expenses		138,854		128,232		112,058		100,025		90,356		-34.9	%
Pre-tax operating income	$	6,559	$	2,809	$	3,537	$	261	$	6,612		0.8	%

9

PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
	1st Quarter 2004			2nd Quarter 2004			3rd Quarter 2004			4th Quarter 2004			1st Quarter 2005			Point Chg. 1st Quarter Better (Worse)
Ratios - GAAP Basis:
Loss and LAE ratio		75.1	%		74.5	%		75.7	%		74.2	%		73.5	%		1.6
Expense ratio:
Acquisition expenses		17.5	%		19.1	%		21.2	%		20.8	%		19.8	%		(2.3	)
Operating expenses 1		9.2	%		11.2	%		7.8	%		11.5	%		9.5	%		(0.3	)
Total expense ratio		26.7	%		30.3	%		29.0	%		32.3	%		29.3	%		(2.6	)
Policyholders' dividend ratio		1.1	%		0.8	%		0.8	%		2.0	%		0.6	%		0.5
Combined ratio		102.9	%		105.6	%		105.5	%		108.5	%		103.4	%		(0.5	)
Net investment income ratio		-6.1	%		-7.1	%		-7.8	%		-7.3	%		-8.9	%		2.8
Operating ratio		96.8	%		98.5	%		97.7	%		101.2	%		94.5	%		2.3

¹ The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $12.1 million, $13.2 million, $8.1 million, $10.3 million and $8.0 million for the first, second, third and fourth quarters of 2004 and the first quarter of 2005, respectively.

10

PMA Capital Corporation
Statements of Operations - Run-off Operations
(Dollar Amounts in Thousands)
	1st		2nd			3rd			4th			1st			% Change
	Quarter		Quarter			Quarter			Quarter			Quarter			1st
	2004		2004			2004			2004			2005			Quarter
Gross Premiums Written	$	11,524	$	(69,726	)	$	(9,589	)	$	(2,176	)	$	5,235			-54.6	%
Net Premiums Written	$	23,362	$	(78,864	)	$	(13,884	)	$	(5,974	)	$	4,929			-78.9	%
Revenues:
Net premiums earned	$	74,769	$	285		$	1,364		$	649		$	3,217			-95.7	%
Net investment income		8,386		6,170			4,884			5,215			3,900			-53.5	%
Total revenues		83,155		6,455			6,248			5,864			7,117			-91.4	%
Losses and Expenses:
Losses and loss adjustment expenses		43,359		(601	)		2,712			3,905			31,770			-26.7	%
Acquisition expenses		24,203		2,348			2,211			385			1,904			-92.1	%
Operating expenses		6,647		4,084			3,440			3,520			3,089			-53.5	%
Total losses and expenses		74,209		5,831			8,363			7,810			36,763			-50.5	%
Pre-tax operating income (loss)	$	8,946	$	624		$	(2,115	)	$	(1,946	)	$	(29,646	)		NM

11

PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			1st
	2004			2004			2004			2004			2005			Quarter
Gross Premiums Written	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(194	)		-29.3	%
Net Premiums Written	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(194	)		-29.3	%
Revenues:
Net premiums earned	$	(150	)	$	(225	)	$	(186	)	$	(264	)	$	(194	)		-29.3	%
Net investment income		344			273			271			418			271			-21.2	%
Other revenues		3			291			25			6,614			227			NM
Total revenues		197			339			110			6,768			304			54.3	%
Losses and Expenses:
Operating expenses		2,570			2,885			2,119			2,736			2,502			-2.6	%
Total losses and expenses		2,570			2,885			2,119			2,736			2,502			-2.6	%
Operating income (loss) before income taxes, interest expense, and loss on debt exchange		(2,373	)		(2,546	)		(2,009	)		4,032			(2,198	)		7.4	%
Interest expense		2,939			2,960			2,973			3,482			3,969			35.0	%
Loss on debt exchange		-			-			-			5,973			-			NM
Pre-tax operating loss	$	(5,312	)	$	(5,506	)	$	(4,982	)	$	(5,423	)	$	(6,167	)		-16.1	%

12

PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2004			2004			2004			2004			2005
Receipts:
Premiums and other revenues collected	$	186,561		$	103,266		$	91,121		$	101,641		$	95,437
Investment income received		22,141			26,520			20,627			18,986			14,814
Total receipts		208,702			129,786			111,748			120,627			110,251
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		6,491			37,839			43,406			34,520			3,812
Losses and LAE paid - prior years		217,746			272,164			178,193			87,203			112,312
Total losses and LAE paid		224,237			310,003			221,599			121,723			116,124
Insurance operating expenses paid		73,845			54,695			43,228			27,716			37,394
Policyholders' dividends paid		1,573			873			2,145			765			2,115
Interest on corporate debt		3,686			1,856			3,694			2,371			4,387
Total disbursements		303,341			367,427			270,666			152,575			160,020
Net other		(7,511	)		(22,894	)		6,997			(56,713	)		7,258
Net operating cash flows	$	(102,150	)	$	(260,535	)	$	(151,921	)	$	(88,661	)	$	(42,511	)

13

PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2004			2004			2004			2004			2005
Receipts:
Premiums and other revenues collected	$	128,216		$	123,944		$	97,543		$	111,150		$	91,910
Investment income received		10,246			9,869			9,574			9,851			9,404
Total receipts		138,462			133,813			107,117			121,001			101,314
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		6,157			19,158			29,827			31,304			3,810
Losses and LAE paid - prior years		75,447			63,116			57,160			31,086			72,999
Losses and LAE		81,604			82,274			86,987			62,390			76,809
Insurance operating expenses paid		52,645			38,931			34,600			29,531			33,000
Policyholders' dividends paid		1,573			873			2,145			765			2,115
Total disbursements		135,822			122,078			123,732			92,686			111,924
Net other		(8,306	)		(8,535	)		8,102			(21,974	)		13,760
Net operating cash flows	$	(5,666	)	$	3,200		$	(8,513	)	$	6,341		$	3,150

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PMA Capital Corporation
Operating Cash Flows - Run-off Operations
(In Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2004			2004			2004			2004			2005
Receipts:
Premiums collected	$	58,345		$	(20,678	)	$	(6,422	)	$	(9,509	)	$	3,527
Investment income received		11,895			16,651			11,053			9,135			5,410
Total receipts		70,240			(4,027	)		4,631			(374	)		8,937
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		334			18,681			13,579			3,216			2
Losses and LAE paid - prior years		142,299			209,048			121,033			56,117			39,313
Total losses and LAE paid		142,633			227,729			134,612			59,333			39,315
Insurance operating expenses paid		21,200			15,764			8,628			(1,815	)		4,394
Total disbursements		163,833			243,493			143,240			57,518			43,709
Net other		1,860			(13,311	)		282			(34,482	)		(74	)
Net operating cash flows	$	(91,733	)	$	(260,831	)	$	(138,327	)	$	(92,374	)	$	(34,846	)

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PMA Capital Corporation
Statutory Surplus
(In Thousands)
	1st			2nd		3rd		4th		1st
	Quarter			Quarter		Quarter		Quarter		Quarter
	2004			2004		2004		2004		20051
PMA Pool 2	$	296,785		$	305,074	$	294,587	$	300,034	$	298,686	5
PMA Capital Insurance Company 3		517,143	4		236,247		236,443		224,511		218,322	5

PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(In Thousands)
		1st			2nd			3rd			4th			1st
		Quarter			Quarter			Quarter			Quarter			Quarter
		2004			2004			2004			2004			20051
Net Premiums Written:
Workers Compensation & Integrated
Disability	$	106,190		$	56,764		$	88,814		$	54,556		$	94,737
Other Commercial Lines		11,915			8,275			8,962			3,700			10,787
Total - PMA Pool	$	118,105		$	65,039		$	97,776		$	58,256		$	105,524
Statutory Ratios:
Loss and LAE ratio		74.9	%		75.2	%		75.9	%		75.2	%		73.3	%
Underwriting expense ratio		27.1	%		39.0	%		29.5	%		37.5	%		25.2	%
Policyholders' dividend ratio		1.2	%		0.7	%		0.4	%		0.4	%		0.9	%
Combined ratio		103.2	%		114.9	%		105.8	%		113.1	%		99.4	%
Operating ratio		96.5	%		107.4	%		98.9	%		104.2	%		91.2	%

1	Estimated.
2	The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company.
3	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.
4	Includes the statutory surplus of the PMA Pool.
5	Includes unassigned surplus of $129.4 million and $24.8 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: Certificate Transfers and Conversions: The Bank of New York Receive and Deliver Department - 11 W P.O. Box 11002 Church Street Station New York, NY 10286   Written Inquiries: The Bank of New York Shareholder Relations Department - 11 E P.O. Box 11258 Church Street Station New York, NY 10286   Phone Inquiries: 800.524.4458   Email Inquiries: shareowner-svcs@bankofny.com Securities Listing: The Corporation's Class A Common Stock is listed on the NASDAQ Stock Market^Ò. It trades under the stock symbol: PMACA.   Inquiries: William E. Hitselberger Chief Financial Officer 215.665.5070 e-mail: bhitselberger@pmacapital.com   Investor Relations 215.665.5046 investorrelations@pmacapital.com   Company Website: http://www.pmacapital.com    

Financial Strength Ratings (as of 5/3/2005):
	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 in run-off.

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