EX-99.2 4 ex99-2.htm EXHIBIT 99.2 Exhibit 99.2
PMA Capital Corporation
      
Statistical Supplement
      
Third Quarter - 2005
    
 
  
         
Table of Contents
    
Page
  
 
        
Consolidated Highlights:
        
Selected Financial Data - Third Quarter
    
1
 
Selected Financial Data - Year-to-date
    
2
 
Consolidated Statements of Operations - Per Share Data
    
3
 
Consolidated Statements of Operations - Third Quarter
    
5
 
Consolidated Statements of Operations - Year-to-date
    
6
 
Consolidated Balance Sheets
    
7
 
Invested Assets and Net Investment Income; Debt; Balance Sheet Impact of Commutations - Run-off Operations
    
8
 
         
Segment Information:
        
Statements of Operations - Consolidating - Year-to-date
    
9-10 
  
Statements of Operations - Consolidating - Third Quarter
    
11-12 
  
Statements of Operations - PMA Insurance Group
    
13
 
Insurance Ratios - PMA Insurance Group
    
14
 
Statements of Operations - Run-off Operations
    
15
 
Statements of Operations - Corporate & Other
    
16
 
 
        
Operating Cash Flow Information:
        
Operating Cash Flows - Consolidated
    
17
 
Operating Cash Flows - PMA Insurance Group
    
18
 
Operating Cash Flows - Run-off Operations
    
19
 
         
Statutory Financial Information:
        
Statutory Surplus; Statutory Financial Information - PMA Pool
    
20
 
         
Other Information:
        
Industry Ratings and Market Information
    
21
 
         
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 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)             
  
                            
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 % Change
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 3rd
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
 Quarter
  
                            
Net Premiums Written by Segment:
                           
PMA Insurance Group
  
$
97,637
  
$
62,910
  
$
105,474
  
$
82,103
  
$
116,877
    
19.7
%
Run-off Operations
   
(13,884
)
  
(5,974
)
  
4,929
   
1,504
   
789
   
NM
  
Corporate & Other
    
(186
)
  
(264
)
  
(194
)
  
(220
)
  
(195
)
  
-4.8
%
Net premiums written
  
$
83,567
  
$
56,672
  
$
110,209
  
$
83,387
  
$
117,471
    
40.6
%
                                       
Major Components of Net Income (Loss):
                                     
Pre-tax operating income (loss) by segment:
                                      
PMA Insurance Group
  
$
3,537
  
$
261
  
$
6,612
  
$
4,941
  
$
6,600
    
86.6
%
Run-off Operations 
    
(2,115
)
  
(1,946
)
  
(29,646
)
  
1,133
   
(258
)
  
87.8
%
Corporate & Other
    
(4,982
)
  
(5,423
)
  
(6,167
)
  
(5,721
)
  
(5,609
)
  
-12.6
%
Pre-tax operating income (loss)
    
(3,560
)
  
(7,108
)
  
(29,201
)
  
353
   
733
   
NM
  
Net realized investment gains (losses)
    
3,515
   
(7,870
)
  
2,983
   
(265
)
  
483
   
-86.3
%
Pre-tax income (loss)
    
(45
)
  
(14,978
)
  
(26,218
)
  
88
   
1,216
   
NM
  
Income tax expense (benefit)
    
29
   
(4,665
)
  
(5,667
)
  
71
   
476
   
NM
  
Net income (loss)
  
$
(74
)
$
(10,313
)
$
(20,551
)
$
17
  
$
740
    
NM
  
After-tax operating income (loss)
  
$
(2,359
)
$
(5,198
)
$
(22,490
)
$
189
  
$
426
    
NM
  
                                       
Diluted Earnings (Loss) Per Share:
                                      
Net income (loss)
  
$
-
  
$
(0.33
)
$
(0.65
)
$
-
  
$
0.02
    
NM
  
Less the impact of:
                                      
Realized gains (losses) after tax
    
0.08
   
(0.16
)
  
0.06
   
(0.01
)
  
0.01
   
-87.5
%
After-tax operating income (loss)
  
$
(0.08
)
$
(0.17
)
$
(0.71
)
$
0.01
  
$
0.01
    
NM
  
                                       
Capitalization:
                                      
Debt
  
$
187,566
  
$
210,784
  
$
208,294
  
$
208,586
  
$
216,808
    
15.6
%
Shareholders' equity excluding FAS 115 unrealized gain
    
442,797
   
431,828
   
412,349
   
412,330
   
413,513
   
-6.6
%
Total capitalization excluding FAS 115 unrealized gain
    
630,363
   
642,612
   
620,643
   
620,916
   
630,321
   
0.0
%
FAS 115 unrealized gain
    
15,350
   
13,623
   
1,539
   
17,266
   
1,151
   
-92.5
%
Total capitalization including FAS 115 unrealized gain
  
$
645,713
  
$
656,235
  
$
622,182
  
$
638,182
  
$
631,472
    
-2.2
%
                                       
Book Value Per Share:
                                      
Excluding FAS 115 unrealized gain
  
$
13.98
  
$
13.63
  
$
12.95
  
$
12.93
  
$
12.94
    
-7.4
%
Including FAS 115 unrealized gain
  
$
14.46
  
$
14.06
  
$
13.00
  
$
13.47
  
$
12.98
    
-10.3
%
                                       
Debt to Total Capital:
                                      
Excluding FAS 115 unrealized gain
    
29.8
%
  
32.8
%
  
33.6
%
  
33.6
%
  
34.4
%
  
15.4
%
Including FAS 115 unrealized gain
    
29.0
%
  
32.1
%
  
33.5
%
  
32.7
%
  
34.3
%
  
18.3
%
                                       
Interest Coverage:
                                      
Income before interest and income taxes
                                      
to interest expense
    
0.98
   
NM
   
NM
   
1.02
   
1.30
   
32.7
%
                                       
Operating income before interest and income
                                     
     taxes to interest expense
    
NM
   
NM
   
NM
   
1.09
   
1.18
   
NM
  
                                       
                                       
 
 
 
1
 
PMA Capital Corporation             
  
Selected Financial Data             
  
(Dollar Amounts in Thousands, Except Per Share Data)     

   
Nine
 
Nine
 
 % Change
 
   
Months
 
Months
 
 Nine
 
   
2005
  
2004
  
 Months
  
                
Net Premiums Written by Segment:
               
   PMA Insurance Group
  
$
304,454
  
$
314,885
    
-3.3
%
   Run-off Operations 
    
7,222
   
(69,386
)
  
NM
  
   Corporate & Other
    
(609
)
  
(561
)
  
-8.6
%
Net premiums written
  
$
311,067
  
$
244,938
    
27.0
%
                     
Major Components of Net Income (Loss):                     
   Pre-tax operating income (loss) by segment:
                    
      PMA Insurance Group
  
$
18,153
  
$
12,905
    
40.7
%
      Run-off Operations
   
(28,771
)
  
7,455
   
NM
  
      Corporate & Other
    
(17,497
)
  
(15,800
)
  
-10.7
%
   Pre-tax operating income (loss)
    
(28,115
)
  
4,560
   
NM
  
   Net realized investment gains
    
3,201
   
14,363
   
-77.7
%
   Pre-tax income (loss)
    
(24,914
)
  
18,923
   
NM
  
   Income tax expense (benefit)
    
(5,120
)
  
6,780
   
NM
  
   Net income (loss)
  
$
(19,794
)
$
12,143
    
NM
  
   After-tax operating income (loss)
  
$
(21,875
)
$
2,807
    
NM
  
                     
Diluted Earnings (Loss) Per Share:                     
   Net income (loss)
  
$
(0.63
)
$
0.38
    
NM
  
   Less the impact of:
                    
      Realized gains after tax
   
0.06
   
0.26
   
-76.9
%
   After-tax operating income (loss)
  
$
(0.69
)
$
0.12
    
NM
  
                     
                     
 
 
2
 
 

PMA Capital Corporation                
Consolidated Statements of Operations - Per Share Data                
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
 2005
  
2004
  
                                
Diluted Earnings (Loss) Per Share:
                               
                                
Net income (loss)
  
$
-
  
$
(0.33
)
$
(0.65
)
$
-
  
$
0.02
  
$
(0.63
)
$
0.38
  
                                             
Pre-tax operating income (loss)
  
$
(0.11
)
$
(0.23
)
$
(0.93
)
$
0.01
  
$
0.02
  
$
(0.89
)
$
0.20
  
                                             
After-tax operating income (loss)
  
$
(0.08
)
$
(0.17
)
$
(0.71
)
$
0.01
  
$
0.01
  
$
(0.69
)
$
0.12
  
                                             
Diluted weighted average common
                                            
   shares outstanding
    
31,350,825
   
31,350,825
   
31,393,684
   
32,015,127
   
32,244,295
   
31,631,850
   
36,903,965
 
                                             
                                             
Dividends declared:
                                            
Class A Common stock
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
                                             
Actual common shares issued
                                            
        and outstanding
    
31,681,751
   
31,676,851
   
31,835,136
   
31,885,541
   
31,956,983
   
31,956,983
   
31,681,751
 
                                             
                                             
Class A Common Stock prices:
                                            
High
  
$
9.16
  
$
10.85
  
$
10.65
  
$
9.00
  
$
9.50
  
$
10.65
  
$
9.16
  
Low
  
$
5.70
  
$
6.74
  
$
7.05
  
$
5.91
  
$
7.83
  
$
5.91
  
$
4.78
  
Close
  
$
7.55
  
$
10.35
  
$
8.00
  
$
8.83
  
$
8.78
  
$
8.78
  
$
7.55
  
                                             
                                             
 
 
 
3
 
 
 
This Page Intentionally Left Blank
 
 
4
 

PMA Capital Corporation              
Consolidated Statements of Operations              
(In Thousands)              
                            
                           
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 % Change
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 3rd
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
 Quarter
  
                            
Gross Premiums Written
  
$
100,013
  
$
69,940
  
$
121,313
  
$
95,069
  
$
130,106
    
30.1
%
                                       
Net Premiums Written
  
$
83,567
  
$
56,672
  
$
110,209
  
$
83,387
  
$
117,471
    
40.6
%
                                       
Revenues:
                                      
Net premiums earned
  
$
104,210
  
$
89,758
  
$
87,723
  
$
88,720
  
$
92,223
    
-11.5
%
Net investment income
    
13,238
   
12,142
   
11,712
   
12,542
   
12,648
   
-4.5
%
Net realized investment gains (losses)
    
3,515
   
(7,870
)
  
2,983
   
(265
)
  
483
   
-86.3
%
Other revenues
    
5,881
   
12,125
   
6,192
   
4,939
   
6,209
   
5.6
%
Total revenues
    
126,844
   
106,155
   
108,610
   
105,936
   
111,563
   
-12.0
%
                                       
Expenses:
                                      
Losses and loss adjustment expenses
    
80,706
   
70,189
   
93,988
   
63,261
   
68,112
   
-15.6
%
Acquisition expenses
    
24,087
   
18,935
   
18,671
   
17,983
   
19,691
   
-18.3
%
Operating expenses
    
18,318
   
20,735
   
17,698
   
18,802
   
17,872
   
-2.4
%
Dividends to policyholders
    
805
   
1,819
   
502
   
1,762
   
567
   
-29.6
%
Interest expense
    
2,973
   
3,482
   
3,969
   
4,040
   
4,105
   
38.1
%
Loss on debt exchange
    
-
   
5,973
   
-
   
-
   
-
   
NM
  
Total losses and expenses
    
126,889
   
121,133
   
134,828
   
105,848
   
110,347
   
-13.0
%
                                       
Pre-tax income (loss)
    
(45
)
  
(14,978
)
  
(26,218
)
  
88
   
1,216
   
NM
  
                                       
Income tax expense (benefit):
                                      
Current
    
(117
)
  
(272
)
  
-
   
-
   
-
   
NM
  
Deferred
    
146
   
(4,393
)
  
(5,667
)
  
71
   
476
   
NM
  
                                       
Total income tax expense (benefit)
    
29
   
(4,665
)
  
(5,667
)
  
71
   
476
   
NM
  
                                       
Net income (loss)
  
$
(74
)
$
(10,313
)
$
(20,551
)
$
17
  
$
740
    
NM
  
                                       
Pre-tax operating income (loss)
  
$
(3,560
)
$
(7,108
)
$
(29,201
)
$
353
  
$
733
    
NM
  
                                       
After-tax operating income (loss)
  
$
(2,359
)
$
(5,198
)
$
(22,490
)
$
189
  
$
426
    
NM
  
                                       
                                       
 
 
 
5
 
 

PMA Capital Corporation        
Consolidated Statements of Operations        
(In Thousands)        
                
   
Nine
  
Nine
  
 % Change
  
   
Months
  
Months
  
 Nine
 
   
2005
  
2004
  
 Months
  
                
Gross Premiums Written
  
$
346,488
  
$
282,322
    
22.7
%
                     
Net Premiums Written
  
$
311,067
  
$
244,938
    
27.0
%
                     
Revenues:
                    
Net premiums earned
  
$
268,666
  
$
428,827
    
-37.3
%
Net investment income
    
36,902
   
44,803
   
-17.6
%
Net realized investment gains
    
3,201
   
14,363
   
-77.7
%
Other revenues
    
17,340
   
18,576
   
-6.7
%
Total revenues
    
326,109
   
506,569
   
-35.6
%
                     
Expenses:
                    
Losses and loss adjustment expenses
    
225,361
   
310,367
   
-27.4
%
Acquisition expenses
    
56,345
   
96,290
   
-41.5
%
Operating expenses
    
54,372
   
68,937
   
-21.1
%
Dividends to policyholders
    
2,831
   
3,180
   
-11.0
%
Interest expense
    
12,114
   
8,872
   
36.5
%
Total losses and expenses
    
351,023
   
487,646
   
-28.0
%
                     
Pre-tax income (loss)
    
(24,914
)
  
18,923
   
NM
  
                     
Income tax expense (benefit):
                    
Current
    
-
   
272
   
NM
  
Deferred
    
(5,120
)
  
6,508
   
NM
  
                     
Total income tax expense (benefit)
    
(5,120
)
  
6,780
   
NM
  
                     
Net income (loss)
  
$
(19,794
)
$
12,143
    
NM
  
                     
Pre-tax operating income (loss)
  
$
(28,115
)
$
4,560
    
NM
  
                     
After-tax operating income (loss)
  
$
(21,875
)
$
2,807
    
NM
  
                     
                     
 
 
6
 

PMA Capital Corporation          
  
Consolidated Balance Sheets          
  
(In Thousands)          
  
                       
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
                       
Assets:
                      
Investments in fixed maturities available for sale
  
$
1,381,788
  
$
1,304,086
  
$
1,283,406
  
$
1,256,169
  
$
1,184,301
  
Short-term investments
    
98,761
   
123,746
   
60,325
   
61,058
   
67,636
 
Short-term investments, loaned securities collateral
    
96,606
   
-
   
102,620
   
90,114
   
63,751
 
Total investments
    
1,577,155
   
1,427,832
   
1,446,351
   
1,407,341
   
1,315,688
 
                                 
Cash
    
48,046
   
35,537
   
49,921
   
30,464
   
43,282
 
Accrued investment income
    
16,407
   
15,517
   
15,188
   
14,147
   
13,703
 
Premiums receivable
    
219,111
   
197,831
   
208,748
   
183,713
   
212,847
 
Reinsurance receivables
    
1,170,004
   
1,142,552
   
1,129,507
   
1,129,857
   
1,115,953
 
Deferred income taxes
    
80,541
   
86,501
   
98,714
   
90,301
   
98,568
 
Deferred acquisition costs
    
37,800
   
31,426
   
35,138
   
34,655
   
39,432
 
Funds held by reinsureds
    
134,978
   
142,064
   
146,674
   
150,078
   
153,064
 
Other assets
    
219,536
   
171,042
   
167,200
   
169,028
   
167,192
 
Total assets
  
$
3,503,578
  
$
3,250,302
  
$
3,297,441
  
$
3,209,584
  
$
3,159,729
  
                                 
Liabilities:
                                
Unpaid losses and loss adjustment expenses
  
$
2,179,900
  
$
2,111,598
  
$
2,077,599
  
$
2,005,386
  
$
1,966,907
  
Unearned premiums
    
193,221
   
158,489
   
177,415
   
175,025
   
199,153
 
Debt
    
187,566
   
210,784
   
208,294
   
208,586
   
216,808
 
Accounts payable, accrued expenses
                                
and other liabilities
    
254,467
   
196,744
   
200,350
   
191,309
   
198,441
 
Funds held under reinsurance treaties
    
127,239
   
121,234
   
112,712
   
105,572
   
96,067
 
Dividends to policyholders
    
6,424
   
5,977
   
4,580
   
3,992
   
3,931
 
Payable under securities loan agreements
    
96,614
   
25
   
102,603
   
90,118
   
63,758
 
Total liabilities
    
3,045,431
   
2,804,851
   
2,883,553
   
2,779,988
   
2,745,065
 
                                 
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
    
223,519
   
213,313
   
189,787
   
189,109
   
188,834
 
Accumulated other comprehensive income (loss)
    
885
   
(1,959
)
  
(14,116
)
  
1,377
   
(14,861
)
Treasury stock, at cost
    
(45,474
)
  
(45,573
)
  
(41,752
)
  
(40,734
)
  
(39,305
)
Unearned restricted stock compensation
    
(1,204
)
  
(751
)
  
(452
)
  
(577
)
  
(425
)
Total shareholders' equity
    
458,147
   
445,451
   
413,888
   
429,596
   
414,664
 
Total liabilities and shareholders' equity
  
$
3,503,578
  
$
3,250,302
  
$
3,297,441
  
$
3,209,584
  
$
3,159,729
  
 
 
 
7
 

PMA Capital Corporation               
  
Invested Assets and Net Investment Income               
  
(Dollars in Thousands)               
  
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
 2005
  
2004
  
                                
Total Investments & Cash
                               
As reported
  
$
1,625,201
  
$
1,463,369
  
$
1,496,272
  
$
1,437,805
  
$
1,358,970
  
$
1,358,970
  
$
1,625,201
  
Less:
                                            
Securities lending activity
    
96,614
   
25
   
102,603
   
90,118
   
63,758
   
63,758
   
96,614
 
Unrealized gain
    
23,615
   
20,958
   
2,368
   
26,563
   
1,771
   
1,771
   
23,615
 
Total adjusted investments & cash
  
$
1,504,972
  
$
1,442,386
  
$
1,391,301
  
$
1,321,124
  
$
1,293,441
  
$
1,293,441
  
$
1,504,972
  
                                             
Net Investment Income
                                            
As reported
  
$
13,238
  
$
12,142
  
$
11,712
  
$
12,542
  
$
12,648
  
$
36,902
  
$
44,803
  
Funds held:
                                            
Assumed
   
73
   
846
   
187
   
129
   
535
   
851
   
169
 
Ceded
   
(2,536
)
  
(2,026
)
  
(2,437
)
  
(1,871
)
  
(1,694
)
  
(6,002
)
  
(9,883
)
Total funds held
    
(2,463
)
  
(1,180
)
  
(2,250
)
  
(1,742
)
  
(1,159
)
  
(5,151
)
  
(9,714
)
                                             
Total adjusted investment income
  
$
15,701
  
$
13,322
  
$
13,962
  
$
14,284
  
$
13,807
  
$
42,053
  
$
54,517
  
                                             
Yield
                                            
As reported
    
3.13
%
  
3.15
%
  
3.17
%
  
3.42
%
  
3.62
%
  
3.42
%
  
3.20
%
Investment portfolio
    
4.01
%
  
3.62
%
  
3.94
%
  
4.21
%
  
4.22
%
  
4.12
%
  
4.15
%
                                             
Duration (in years)
    
3.6
   
3.6
   
3.8
   
3.9
   
3.7
   
3.7
   
3.6
 
                                             
                                             
 

PMA Capital Corporation     
Debt     
(Dollars in Thousands)     
           
           
   
Amount
      
   
Outstanding
  
Maturity
  
6.50% convertible debt 
  
$
94,640
    
20221
  
Derivative component of 6.50% convertible debt
    
13,117
       
4.25% convertible debt 
    
655
   
20222
  
8.50% senior notes
    
57,500
   
2018
  
Trust preferred debt 3
    
43,816
   
2033
  
Surplus notes 4
    
10,000
   
2035
  
Unamortized debt discount
    
(2,920
)
      
Total long-term debt
  
$
216,808
        
 
                                   
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 $10.5 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 8.0% as of September 30, 2005.         
              
4
Interest rate on surplus notes is 8.51% as of September 30, 2005.      
                    
 
                   
PMA Capital Corporation        
  
Balance Sheet Impact of Commutations - Run-off Operations         
(Dollars in Thousands)         
                   
   
3rd Quarter 2005       
Liabilities
    
Assumed
 
      
Ceded
    
Total
  
Unpaid loss and loss adjustment expenses
  
$
(4,475
)
    
$
-
  
$
(4,475
)
Funds held under reinsurance treaties
    
(219
)
      
-
   
(219
)
                         
 
    
Nine Months 2005         
Liabilities
    
Assumed
        
Ceded
    
Total
  
Unpaid loss and loss adjustment expenses
  
$
(9,477
)
    
$
-
  
$
(9,477
)
Funds held under reinsurance treaties
    
(219
)
      
-
   
(219
)
                         
                         
                         
 
 
8
 

PMA Capital Corporation          
  
Statements of Operations - Consolidating           
Nine Months Ended September 30, 2005          
  
(In Thousands)          
  
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
     
       
Group
 
& Other1
  
Operations
  
Consolidated
 
                       
Gross Premiums Written
        
$
339,115
  
$
(609
)
$
7,982
  
$
346,488
  
                                 
Net Premiums Written
        
$
304,454
  
$
(609
)
$
7,222
  
$
311,067
  
                                 
Revenues:
                                
Net premiums earned
        
$
262,455
  
$
(609
)
$
6,820
  
$
268,666
  
Net investment income
          
23,417
   
799
   
12,686
   
36,902
 
Other revenues
          
17,043
   
297
   
-
   
17,340
 
Operating revenues
          
302,915
   
487
   
19,506
   
322,908
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
191,544
   
-
   
33,817
   
225,361
 
Acquisition expenses
          
52,300
   
-
   
4,045
   
56,345
 
Operating expenses
          
38,082
   
5,875
   
10,415
   
54,372
 
Dividends to policyholders
          
2,831
   
-
   
-
   
2,831
 
Total losses and expenses
          
284,757
   
5,875
   
48,277
   
338,909
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
18,158
   
(5,388
)
  
(28,771
)
  
(16,001
)
                                 
Interest expense
          
5
   
12,109
   
-
   
12,114
 
                                 
Pre-tax operating income (loss)
        
$
18,153
  
$
(17,497
)
$
(28,771
)
  
(28,115
)
                                 
Net realized investment gains
                            
3,201
 
                                 
Pre-tax loss
                          
$
(24,914
)
                                 
                                 
1  Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
 
 
 
9
 

 


PMA Capital Corporation           
Statements of Operations - Consolidating          
  
Nine Months Ended September 30, 2004          
  
(In Thousands)          
  
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
     
       
Group
 
& Other1
  
Operations
  
Consolidated
 
                       
Gross Premiums Written
        
$
350,674
  
$
(561
)
$
(67,791
)
$
282,322
  
                                 
Net Premiums Written
        
$
314,885
  
$
(561
)
$
(69,386
)
$
244,938
  
                                 
Revenues:
                                
Net premiums earned
        
$
352,970
  
$
(561
)
$
76,418
  
$
428,827
  
Net investment income
          
24,475
   
888
   
19,440
   
44,803
 
Other revenues
          
18,257
   
319
   
-
   
18,576
 
Operating revenues
          
395,702
   
646
   
95,858
   
492,206
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
264,897
   
-
   
45,470
   
310,367
 
Acquisition expenses
          
67,528
   
-
   
28,762
   
96,290
 
Operating expenses
          
47,192
   
7,574
   
14,171
   
68,937
 
Dividends to policyholders
          
3,180
   
-
   
-
   
3,180
 
Total losses and expenses
          
382,797
   
7,574
   
88,403
   
478,774
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
12,905
   
(6,928
)
  
7,455
   
13,432
 
                                 
Interest expense
          
-
   
8,872
   
-
   
8,872
 
                                 
Pre-tax operating income (loss)
        
$
12,905
  
$
(15,800
)
$
7,455
    
4,560
 
                                 
Net realized investment gains
                            
14,363
 
                                 
Pre-tax income
                          
$
18,923
  
                                 
                                 
1  Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
                                 
 
 
 
10
 

PMA Capital Corporation          
  
Statements of Operations - Consolidating          
  
Three Months Ended September 30, 2005          
  
(In Thousands)          
  
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
     
       
Group
 
& Other1
  
Operations
  
Consolidated
 
                       
Gross Premiums Written
        
$
129,163
  
$
(195
)
$
1,138
  
$
130,106
  
.
                               
Net Premiums Written
        
$
116,877
  
$
(195
)
$
789
  
$
117,471
  
                                 
Revenues:
                                
Net premiums earned
        
$
92,214
  
$
(195
)
$
204
  
$
92,223
  
Net investment income
          
8,160
   
271
   
4,217
   
12,648
 
Other revenues
          
6,172
   
37
   
-
   
6,209
 
Operating revenues
          
106,546
   
113
   
4,421
   
111,080
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
67,995
   
-
   
117
   
68,112
 
Acquisition expenses
          
18,279
   
-
   
1,412
   
19,691
 
Operating expenses
          
13,100
   
1,622
   
3,150
   
17,872
 
Dividends to policyholders
          
567
   
-
   
-
   
567
 
Total losses and expenses
          
99,941
   
1,622
   
4,679
   
106,242
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
6,605
   
(1,509
)
  
(258
)
  
4,838
 
                                 
Interest expense
          
5
   
4,100
   
-
   
4,105
 
                                 
Pre-tax operating income (loss)
        
$
6,600
  
$
(5,609
)
$
(258
)
  
733
 
                                 
Net realized investment gains
                            
483
 
                                 
Pre-tax income
                          
$
1,216
  
                                 
                                 
1  Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.             

 
11
 

PMA Capital Corporation           
Statements of Operations - Consolidating          
  
Three Months Ended September 30, 2004          
  
(In Thousands)           
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
     
       
Group
 
& Other1
  
Operations
  
Consolidated
 
                       
Gross Premiums Written
        
$
109,788
  
$
(186
)
$
(9,589
)
$
100,013
  
.
                               
Net Premiums Written
        
$
97,637
  
$
(186
)
$
(13,884
)
$
83,567
  
                                 
Revenues:
                                
Net premiums earned
        
$
103,032
  
$
(186
)
$
1,364
  
$
104,210
  
Net investment income
          
8,083
   
271
   
4,884
   
13,238
 
Other revenues
          
5,856
   
25
   
-
   
5,881
 
Operating revenues
          
116,971
   
110
   
6,248
   
123,329
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
77,994
   
-
   
2,712
   
80,706
 
Acquisition expenses
          
21,876
   
-
   
2,211
   
24,087
 
Operating expenses
          
12,759
   
2,119
   
3,440
   
18,318
 
Dividends to policyholders
          
805
   
-
   
-
   
805
 
Total losses and expenses
          
113,434
   
2,119
   
8,363
   
123,916
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
3,537
   
(2,009
)
  
(2,115
)
  
(587
)
                                 
Interest expense
          
-
   
2,973
   
-
   
2,973
 
                                 
Pre-tax operating income (loss)
        
$
3,537
  
$
(4,982
)
$
(2,115
)
  
(3,560
)
                                 
Net realized investment gains
                            
3,515
 
                                 
Pre-tax loss
                          
$
(45
)
                                 
                                 
1  Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
                                 
 
 
 
12
 

PMA Capital Corporation                    
  
Statements of Operations - PMA Insurance Group                     
(Dollar Amounts in Thousands)                    
  
                                         
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 3rd
 
Nine
 
   
2004
  
2004
  
2005
  
2005
  
2005
  
 2005
  
2004
  
 Quarter
  
Months
  
                                         
Gross Premiums Written
  
$
109,788
  
$
72,380
  
$
116,272
  
$
93,680
  
$
129,163
  
$
339,115
  
$
350,674
    
17.6
%
  
-3.3
%
                                                         
Net Premiums Written
  
$
97,637
  
$
62,910
  
$
105,474
  
$
82,103
  
$
116,877
  
$
304,454
  
$
314,885
    
19.7
%
  
-3.3
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
103,032
  
$
89,373
  
$
84,700
  
$
85,541
  
$
92,214
  
$
262,455
  
$
352,970
    
-10.5
%
  
-25.6
%
Net investment income
    
8,083
   
6,509
   
7,541
   
7,716
   
8,160
   
23,417
   
24,475
   
1.0
%
  
-4.3
%
Other revenues
    
5,856
   
5,511
   
5,965
   
4,906
   
6,172
   
17,043
   
18,257
   
5.4
%
  
-6.6
%
Total revenues
    
116,971
   
101,393
   
98,206
   
98,163
   
106,546
   
302,915
   
395,702
   
-8.9
%
  
-23.4
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
77,994
   
66,284
   
62,218
   
61,331
   
67,995
   
191,544
   
264,897
   
-12.8
%
  
-27.7
%
Acquisition expenses
    
21,876
   
18,550
   
16,767
   
17,254
   
18,279
   
52,300
   
67,528
   
-16.4
%
  
-22.6
%
Operating expenses
    
12,759
   
14,479
   
12,107
   
12,875
   
13,100
   
38,082
   
47,192
   
2.7
%
  
-19.3
%
Dividends to policyholders
    
805
   
1,819
   
502
   
1,762
   
567
   
2,831
   
3,180
   
-29.6
%
  
-11.0
%
Total losses and expenses
    
113,434
   
101,132
   
91,594
   
93,222
   
99,941
   
284,757
   
382,797
   
-11.9
%
  
-25.6
%
                                                         
Operating income before income taxes
                                                        
and interest expense
    
3,537
   
261
   
6,612
   
4,941
   
6,605
   
18,158
   
12,905
   
86.7
%
  
40.7
%
                                                         
Interest expense
    
-
   
-
   
-
   
-
   
5
   
5
   
-
   
NM
    
NM
  
                                                         
Pre-tax operating income
 
$
3,537
  
$
261
  
$
6,612
  
$
4,941
  
$
6,600
  
$
18,153
  
$
12,905
    
86.6
%
  
40.7
%
                                                         
                                                         
 
 
13
 

PMA Capital Corporation                    
  
Insurance Ratios - PMA Insurance Group                     
 
 
3rd
Quarter
2004
 
4th
Quarter
2004
 
1st
Quarter
2005
 
2nd
Quarter
2005
 
3rd
Quarter
2005
 
 Nine
Months
2005
 
Nine
Months
2004
 
 Point Chg. 3rd Quarter
Better (Worse)
 
Point Chg.
Nine Months
Better (Worse)
  
                                         
Ratios - GAAP Basis:
                                        
                                         
                                         
Loss and LAE ratio
    
75.7
%
  
74.2
%
  
73.5
%
  
71.7
%
  
73.7
%
  
73.0
%
  
75.0
%
  
2.0
   
2.0
 
                                                         
Expense ratio:
                                                        
Acquisition expenses
    
21.2
%
  
20.8
%
  
19.8
%
  
20.2
%
  
19.8
%
  
19.9
%
  
19.1
%
  
1.4
   
(0.8
)
Operating expenses 1
    
7.8
%
  
11.5
%
  
9.5
%
  
10.3
%
  
9.2
%
  
9.6
%
  
9.5
%
  
(1.4
)
  
(0.1
)
Total expense ratio
    
29.0
%
  
32.3
%
  
29.3
%
  
30.5
%
  
29.0
%
  
29.5
%
  
28.6
%
  
(0.0
)
  
(0.9
)
                                                         
Policyholders' dividend ratio
    
0.8
%
  
2.0
%
  
0.6
%
  
2.1
%
  
0.6
%
  
1.1
%
  
0.9
%
  
0.2
   
(0.2
)
Combined ratio
    
105.5
%
  
108.5
%
  
103.4
%
  
104.3
%
  
103.3
%
  
103.6
%
  
104.5
%
  
2.2
   
0.9
 
                                                         
Net investment income ratio
    
-7.8
%
  
-7.3
%
  
-8.9
%
  
-9.0
%
  
-8.8
%
  
-8.9
%
  
-6.9
%
  
1.0
   
2.0
 
Operating ratio
    
97.7
%
  
101.2
%
  
94.5
%
  
95.3
%
  
94.5
%
  
94.7
%
  
97.6
%
  
3.2
   
2.9
 
                                                         
 
1  The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $8.1 million, $10.3 million, $8.0 million, $8.9 million and $8.4 million for the third and fourth quarters of 2004 and the first, second and third quarters of 2005, respectively.
 
 
 
 
14
 

PMA Capital Corporation                    
  
Statements of Operations - Run-off Operations                    
  
(Dollar Amounts in Thousands)                    
  
                                         
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 3rd
 
Nine
 
 
 
2004
 
2004
 
2005
 
2005
 
2005
 
 2005
 
2004
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
 
$
(9,589
)
$
(2,176
)
$
5,235
  
$
1,609
  
$
1,138
  
$
7,982
  
$
(67,791
)
  
NM
    
NM
  
                                                         
Net Premiums Written
 
$
(13,884
)
$
(5,974
)
$
4,929
  
$
1,504
  
$
789
  
$
7,222
  
$
(69,386
)
  
NM
    
NM
  
                                                         
Revenues:
                                                        
Net premiums earned
  
$
1,364
  
$
649
  
$
3,217
  
$
3,399
  
$
204
  
$
6,820
  
$
76,418
    
-85.0
%
  
-91.1
%
Net investment income
    
4,884
   
5,215
   
3,900
   
4,569
   
4,217
   
12,686
   
19,440
   
-13.7
%
  
-34.7
%
Total revenues
    
6,248
   
5,864
   
7,117
   
7,968
   
4,421
   
19,506
   
95,858
   
-29.2
%
  
-79.7
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
2,712
   
3,905
   
31,770
   
1,930
   
117
   
33,817
   
45,470
   
-95.7
%
  
-25.6
%
Acquisition expenses
    
2,211
   
385
   
1,904
   
729
   
1,412
   
4,045
   
28,762
   
-36.1
%
  
-85.9
%
Operating expenses
    
3,440
   
3,520
   
3,089
   
4,176
   
3,150
   
10,415
   
14,171
   
-8.4
%
  
-26.5
%
Total losses and expenses
    
8,363
   
7,810
   
36,763
   
6,835
   
4,679
   
48,277
   
88,403
   
-44.1
%
  
-45.4
%
                                                         
Pre-tax operating income (loss)
  
$
(2,115
)
$
(1,946
)
$
(29,646
)
$
1,133
  
$
(258
)
$
(28,771
)
  
7,455
   
87.8
%
  
NM
  
                                                         
                                                         
 
 
 
15
 

PMA Capital Corporation                    
  
Statements of Operations - Corporate & Other                    
  
(Dollar Amounts in Thousands)                    
  
                                         
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 3rd
 
Nine
 
 
 
2004
 
2004
 
2005
 
2005
 
2005
 
 2005
 
2004
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
 
$
(186
)
$
(264
)
$
(194
)
$
(220
)
$
(195
)
$
(609
)
$
(561
)
  
-4.8
%
  
-8.6
%
                                                         
Net Premiums Written
 
$
(186
)
$
(264
)
$
(194
)
$
(220
)
$
(195
)
$
(609
)
$
(561
)
  
-4.8
%
  
-8.6
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
(186
)
$
(264
)
$
(194
)
$
(220
)
$
(195
)
$
(609
)
$
(561
)
  
-4.8
%
  
-8.6
%
Net investment income
    
271
   
418
   
271
   
257
   
271
   
799
   
888
   
0.0
%
  
-10.0
%
Other revenues
    
25
   
6,614
   
227
   
33
   
37
   
297
   
319
   
48.0
%
  
-6.9
%
Total revenues
    
110
   
6,768
   
304
   
70
   
113
   
487
   
646
   
2.7
%
  
-24.6
%
                                                         
Losses and Expenses:
                                                        
Operating expenses
    
2,119
   
2,736
   
2,502
   
1,751
   
1,622
   
5,875
   
7,574
   
-23.5
%
  
-22.4
%
Total losses and expenses
    
2,119
   
2,736
   
2,502
   
1,751
   
1,622
   
5,875
   
7,574
   
-23.5
%
  
-22.4
%
                                                         
Operating income (loss) before income taxes,
                                                        
interest expense, and loss on debt exchange
    
(2,009
)
  
4,032
   
(2,198
)
  
(1,681
)
  
(1,509
)
  
(5,388
)
  
(6,928
)
  
24.9
%
  
22.2
%
                                                         
Interest expense
    
2,973
   
3,482
   
3,969
   
4,040
   
4,100
   
12,109
   
8,872
   
37.9
%
  
36.5
%
                                                         
Loss on debt exchange
    
-
   
5,973
   
-
   
-
   
-
   
-
   
-
   
NM
    
NM
  
                                                         
Pre-tax operating loss
  
$
(4,982
)
$
(5,423
)
$
(6,167
)
$
(5,721
)
$
(5,609
)
$
(17,497
)
  
(15,800
)
  
-12.6
%
  
-10.7
%
                                                         
                                                         
 
 
 
16
 

PMA Capital Corporation               
  
Operating Cash Flows - Consolidated                
(In Thousands)                
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2004
 
2004
 
2005
 
2005
 
2005
 
 2005
 
2004
  
                                
Receipts:
                               
Premiums and other revenues collected
  
$
91,121
  
$
101,641
  
$
95,437
  
$
109,944
  
$
90,858
  
$
296,239
  
$
380,948
  
Investment income received
    
20,627
   
18,986
   
14,814
   
14,656
   
15,942
   
45,412
   
69,288
 
Total receipts
    
111,748
   
120,627
   
110,251
   
124,600
   
106,800
   
341,651
   
450,236
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
43,406
   
34,520
   
3,812
   
14,240
   
16,593
   
34,645
   
87,736
 
Losses and LAE paid - prior years
    
178,193
   
87,203
   
112,312
   
134,182
   
86,329
   
332,823
   
668,103
 
Total losses and LAE paid
    
221,599
   
121,723
   
116,124
   
148,422
   
102,922
   
367,468
   
755,839
 
Insurance operating expenses paid
    
43,228
   
27,716
   
37,394
   
40,823
   
39,009
   
117,226
   
171,768
 
Policyholders' dividends paid
    
2,145
   
765
   
2,115
   
1,284
   
820
   
4,219
   
4,591
 
Interest on corporate debt
    
3,694
   
2,371
   
4,387
   
1,987
   
5,327
   
11,701
   
9,236
 
Total disbursements
    
270,666
   
152,575
   
160,020
   
192,516
   
148,078
   
500,614
   
941,434
 
                                             
Net other
    
6,997
   
(56,713
)
  
7,258
   
1,046
   
3,564
   
11,868
   
(23,408
)
                                             
Net operating cash flows
  
$
(151,921
)
$
(88,661
)
$
(42,511
)
$
(66,870
)
$
(37,714
)
$
(147,095
)
$
(514,606
)
                                             
                                             
 
 
 
17
 

PMA Capital Corporation               
  
Operating Cash Flows - PMA Insurance Group               
  
(In Thousands)               
  
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2004
 
2004
 
2005
 
2005
 
2005
 
 2005
 
2004
  
                                
Receipts:
                               
Premiums and other revenues collected
  
$
97,543
  
$
111,150
  
$
91,910
  
$
101,408
  
$
91,212
  
$
284,530
  
$
349,703
  
Investment income received
    
9,574
   
9,851
   
9,404
   
9,682
   
10,262
   
29,348
   
29,689
 
Total receipts
    
107,117
   
121,001
   
101,314
   
111,090
   
101,474
   
313,878
   
379,392
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
29,827
   
31,304
   
3,810
   
14,233
   
16,584
   
34,627
   
55,142
 
Losses and LAE paid - prior years
    
57,160
   
31,086
   
72,999
   
69,276
   
55,520
   
197,795
   
195,723
 
Losses and LAE
    
86,987
   
62,390
   
76,809
   
83,509
   
72,104
   
232,422
   
250,865
 
Insurance operating expenses paid
    
34,600
   
29,531
   
33,000
   
38,226
   
33,988
   
105,214
   
126,176
 
Policyholders' dividends paid
    
2,145
   
765
   
2,115
   
1,284
   
820
   
4,219
   
4,591
 
Total disbursements
    
123,732
   
92,686
   
111,924
   
123,019
   
106,912
   
341,855
   
381,632
 
                                             
Net other
    
8,102
   
(21,974
)
  
13,760
   
2,002
   
6,012
   
21,774
   
(8,739
)
                                             
Net operating cash flows
  
$
(8,513
)
$
6,341
  
$
3,150
  
$
(9,927
)
$
574
  
$
(6,203
)
$
(10,979
)
                                             
                                             
 
 
 
18
 

PMA Capital Corporation               
  
Operating Cash Flows - Run-off Operations               
  
(In Thousands)               
  
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2004
 
2004
 
2005
 
2005
 
2005
 
 2005
 
2004
 
                                
Receipts:
                               
Premiums collected
  
$
(6,422
)
$
(9,509
)
$
3,527
  
$
8,536
  
$
(354
)
$
11,709
  
$
31,245
  
Investment income received
    
11,053
   
9,135
   
5,410
   
4,974
   
5,680
   
16,064
   
39,599
 
Total receipts
    
4,631
   
(374
)
  
8,937
   
13,510
   
5,326
   
27,773
   
70,844
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
13,579
   
3,216
   
2
   
7
   
9
   
18
   
32,594
 
Losses and LAE paid - prior years
    
121,033
   
56,117
   
39,313
   
64,906
   
30,809
   
135,028
   
472,380
 
Total losses and LAE paid
    
134,612
   
59,333
   
39,315
   
64,913
   
30,818
   
135,046
   
504,974
 
Insurance operating expenses paid
    
8,628
   
(1,815
)
  
4,394
   
2,597
   
5,021
   
12,012
   
45,592
 
Total disbursements
    
143,240
   
57,518
   
43,709
   
67,510
   
35,839
   
147,058
   
550,566
 
                                             
Net other
    
282
   
(34,482
)
  
(74
)
  
(4,890
)
  
(1,912
)
  
(6,876
)
  
(11,169
)
                                             
Net operating cash flows
  
$
(138,327
)
$
(92,374
)
$
(34,846
)
$
(58,890
)
$
(32,425
)
$
(126,161
)
$
(490,891
)
                                             
                                             
 
 
 
19
 

PMA Capital Corporation           
Statutory Surplus           
(In Thousands)           
                       
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
   
2004
  
2004
  
2005
  
2005
  
20051
  
                       
                       
PMA Pool 2
  
$
294,587
  
$
300,034
  
$
298,686
  
$
299,219
  
$
311,802 4
  
PMA Capital Insurance Company 3
    
236,443
   
224,511
   
218,322
   
215,348
   
210,663 5
  
                                 
 
 
 
                                    
PMA Capital Corporation                 
  
Statutory Financial Information - PMA Pool 2                 
  
(In Thousands)                 
  
                                    
       
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
 
 
2004
 
2004
 
2005
 
2005
 
20051
 
 20051
 
2004
  
                                    
Net Premiums Written:
                                   
 Workers Compensation & Integrated  
 
                               
Disability
        
$
88,814
  
$
54,556
  
$
94,737
  
$
70,944
  
$
101,435
  
$
267,116
  
$
251,768
  
Other Commercial Lines
          
8,962
   
3,700
   
10,787
   
10,998
   
13,487
   
35,272
   
29,152
 
Total - PMA Pool
        
$
97,776
  
$
58,256
  
$
105,524
  
$
81,942
  
$
114,922
  
$
302,388
  
$
280,920
  
                                                   
Statutory Ratios:
                                                  
Loss and LAE ratio
          
75.9
%
  
75.2
%
  
73.3
%
  
73.0
%
  
73.3
%
  
73.2
%
  
75.3
%
Underwriting expense ratio
          
29.5
%
  
37.5
%
  
25.2
%
  
30.2
%
  
25.1
%
  
26.5
%
  
30.7
%
Policyholders' dividend ratio
          
0.4
%
  
0.4
%
  
0.9
%
  
0.8
%
  
0.8
%
  
0.9
%
  
0.8
%
Combined ratio
          
105.8
%
  
113.1
%
  
99.4
%
  
104.0
%
  
99.2
%
  
100.6
%
  
106.8
%
Operating ratio
          
98.9
%
  
104.2
%
  
91.2
%
  
95.2
%
  
91.2
%
  
92.3
%
  
99.8
%
 
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 unassigned surplus of $132.5 million and $10 million related to surplus notes.
5  Includes unassigned surplus of $17.1 million.
 
20
 
 

PMA Capital Corporation       
  
Industry Ratings and Market Information        
                
Transfer Agent and Registrar:
      
Inquiries:
      
American Stock Transfer & Trust Company
      
William E. Hitselberger
      
Shareholder Relations
      
Chief Financial Officer
      
59 Maiden Lane – Plaza Level
      
215.665.5070
      
New York, NY 10038
      
e-mail:  bhitselberger@pmacapital.com   
www.amstock.com
               
       
Investor Relations
      
Phone Inquiries:
      
215.665.5046
      
800.937.5449
     
investorrelations@pmacapital.com   
                
Email Inquiries:
      
Company Website:
      
info@amstock.com
     
www.pmacapital.com
      
                
                
Securities Listing:
               
The Corporation's Class A Common Stock is listed
               
on the NASDAQ Stock Market. It trades under
               
the stock symbol: PMACA.
               
                
                
Financial Strength Ratings (as of 10/28/2005):
               
                
   
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.
            
 
21