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) August 3, 2006

PMA Capital Corporation

(Exact name of Registrant as specified in its charter)

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

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

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

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On August 3, 2006, PMA Capital Corporation (the “Registrant”) issued a news release regarding its Second Quarter 2006 results, a copy of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. Additionally, the registrant’s Second Quarter 2006 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 Item 2.02 of 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 August 3, 2006
Exhibit 99.2	PMA Capital Corporation Second Quarter 2006 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
August 3, 2006	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 August 3, 2006
Exhibit 99.2	PMA Capital Corporation Second Quarter 2006 Statistical Supplement

EX-99.1

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

PMA Capital Announces Second Quarter 2006 Results; Improved Operating Income for Second Quarter and First Six Months of 2006

Blue Bell, PA, August 3, 2006 -- PMA Capital Corporation (NASDAQ: PMACA) today announced financial results for the second quarter of 2006. PMA Capital reported a net loss of $762,000, or two cents per share, for the second quarter of 2006, compared to net income of $17,000 for the same period in 2005. Operating income, which we define as net income excluding realized gains (losses), for the quarter increased to $524,000 from $189,000 in the second quarter of 2005. For the six months ended June 30, 2006, the Company reported net income of $1.7 million, or five cents per diluted share, compared to a net loss of $20.5 million, or 65 cents per share, for the same period last year. Operating income for the first six months of 2006 increased to $1.8 million compared to an operating loss of $22.3 million in the first half of 2005. The net loss and operating loss for the first six months 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 Company’s Run-off Operations.

The net loss for the second quarter of 2006 included after-tax net realized investment losses of $1.3 million, or four cents per share, compared to $172,000, or one cent per diluted share, in the second quarter of 2005. Net income for the first six months of 2006 included after-tax net realized investment losses of $104,000, compared to after-tax net realized investment gains of $1.8 million, or six cents per share, for the same period last year. Included in after-tax net realized investment losses for the first six months in 2006 were gains of $620,000, compared to $1.5 million for the same period in 2005, resulting from decreases in the fair value of the derivative component of our 6.50% Convertible Debt.

“Our focus in 2006 has been on the execution of a three-pronged plan: maintain and prudently grow our workers' compensation operation, continue the growth of our fee-based business and reduce our run-off exposures and redeploy the capital invested in our Run-off Operations,” said Vincent T. Donnelly, President and Chief Executive Officer. “We are pleased with the progress that we have made through June on the execution of this plan, but we recognize that we still have work to do. Pre-tax operating income for The PMA Insurance Group increased to $6.7 million for the second quarter of 2006, compared to $4.9 million in the second quarter of 2005. Our year to date direct premiums written increased 10% from the same period a year ago, although direct premiums written for the quarter improved by only 2% compared to the same period last year. Although we continued to see pricing pressure in our territories, we maintained our underwriting discipline and grew our premiums. For the first six months of 2006, our

workers’ compensation renewal retention rate improved to 83%, compared to 70% for the same period of 2005, while our new business increased modestly.”

"Our revenues from PMA Management Corp. improved by $3 million, to $14 million for the six months ended June 30, 2006," Mr. Donnelly continued. "We continue to see growth opportunities for our fee-based business and expect growth to continue from this service-focused aspect of The PMA Insurance Group."

Mr. Donnelly continued, “During the quarter, our financial flexibility improved as a result of the $73.5 million extraordinary dividend received from our Run-off Operations. We used the proceeds of the dividend to reduce our level of debt outstanding and to improve liquidity at the holding company. We reduced our convertible debt during the second quarter by $36 million, which leaves us with $33 million par value of convertible debt outstanding as of June 30, 2006.”

“We continue to execute our plan of reducing the insurance liabilities at our Run-off Operations. Our insurance liabilities have decreased by 10% since year end 2005, and after the end of the second quarter, we finalized a commutation agreement with one of our ten largest ceding companies that will further decrease our liabilities by over $22 million,” Mr. Donnelly concluded.

Consolidated revenues for the second quarter and first six months of 2006 increased to $111.3 million and $223.3 million, compared to $105.9 million and $214.5 million for the same periods in 2005. Direct premiums written for the second quarter of 2006 improved to $92.3 million, up from $90.1 million in the second quarter last year, while year to date premiums written increased by more than 10% to $219.7 million, compared to the same period a year ago. Net premiums earned for the second quarter and first six months of 2006 increased 7% and 6%, respectively, to $94.9 million and $186.6 million, compared to the same periods last year.

Segment Operating Results

Operating income (loss), which we define as net income (loss) under accounting principles generally accepted in the United States (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 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.

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The following is a reconciliation of our segment operating results and operating income (loss) to GAAP net income (loss).

	Three months ended						Six months ended
	June 30,						June 30,
(in thousands)	2006			2005			2006			2005
Pre-tax operating income (loss):
The PMA Insurance Group	$	6,671		$	4,941		$	14,812		$	11,553
Run-off Operations		428			1,133			589			(28,513	)
Corporate & Other		(6,128	)		(5,721	)		(12,267	)		(11,888	)
Pre-tax operating income (loss)		971			353			3,134			(28,848	)
Income tax expense (benefit)		447			164			1,311			(6,547	)
Operating income (loss)		524			189			1,823			(22,301	)
Net realized gains (losses) after tax		(1,286	)		(172	)		(104	)		1,767
Net income (loss)	$	(762	)	$	17		$	1,719		$	(20,534	)

The PMA Insurance Group

The PMA Insurance Group reported pre-tax operating income of $6.7 million and $14.8 million for the second quarter and first six months of 2006, compared to $4.9 million and $11.6 million for the same periods last year. The increases between periods are due to both improved underwriting results and increased investment income.

Direct premiums written were $92.4 million for the second quarter of 2006, up from $90.3 million for the second quarter of 2005. For the six months ended June 30, 2006, direct premiums written increased to $220.0 million, compared to $199.2 million for the same period last year. We wrote $20.1 million and $50.1 million of new business in the second quarter and first six months of 2006, compared to $25.9 million and $49.9 million for the same periods in 2005. Our renewal retention rate on existing workers’ compensation accounts remained strong at 84% for the second quarter of 2006, consistent with that retained for the same period in 2005, while our renewal retention rate for the first six months of 2006 improved to 83%, up from 70% for the comparable period last year. Net premiums written were $85.6 million and $199.0 million in the second quarter and first six months of 2006, compared to $82.1 million and $187.6 million during the same periods a year ago.

For the second quarter and first six months of 2006, the combined ratio on a GAAP basis was 102.9% and 102.5%, compared to 104.3% and 103.8% for the same periods last year. The improvement in the combined ratio for the second quarter of 2006, compared to the same period last year, primarily reflected improved loss and LAE and policyholders’ dividend ratios. The improvement in the combined ratio for the first six months of 2006, compared to the same period a year ago, was mainly due to an improved loss and LAE ratio.

The improved loss and LAE ratio was primarily due to a lower current accident year loss and LAE ratio in 2006, compared to 2005. Pricing changes coupled with payroll inflation for rate sensitive workers’ compensation business are slightly below overall estimated loss trends. Our loss and LAE ratio benefited from changes in workers’ compensation products selected by our insureds, modest changes in our geographic mix and a reduction in our estimate of medical cost inflation. We estimated our medical cost inflation to be 8.5% during the first six months of 2006, compared to our estimate of 11% through the first six months of 2005. We believe our enhanced network and managed care initiatives helped improve our 2006 medical cost inflation rate by 0.5%. We expect that medical cost inflation will remain a significant

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component of our overall loss experience. The policyholders’ dividend ratio improved in the second quarter of 2006 due to slightly higher than expected losses resulting in lower than expected dividends on participating products where the policyholders may receive a dividend based, to a large extent, on their loss experience.

Net investment income increased to $8.8 million in the second quarter of 2006 compared to $7.7 million in the prior year quarter. For the first six months of 2006, net investment income increased $2.1 million to $17.3 million compared to the first half of 2005. The improvements in both periods were due primarily to higher yields of approximately 40 basis points on our investment portfolio, which had a book yield of 5.0% at June 30, 2006.

Run-off Operations

Our Run-off Operations includes the results of our former reinsurance and excess and surplus lines businesses. The Run-off Operations had pre-tax operating income of $428,000 and $589,000 for the three and six months ended June 30, 2006, compared to pre-tax operating income of $1.1 million and a pre-tax operating loss of $28.5 million for the same periods last year. The pre-tax operating loss for the first six months of 2005 included the first quarter charge of $30 million for prior year loss development.

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 $6.1 million during the second quarter of 2006, compared to $5.7 million during the same period last year, primarily due to higher stock-based compensation. Pre-tax operating losses were $12.3 million during the first six months of 2006, compared to $11.9 million for the same period in 2005, primarily due to higher interest expense. For segment reporting purposes, we allocate interest income for the bonds owned by our operating companies back to their respective segments and reduce investment income in the Corporate and Other segment. Although the Corporate and Other segment does not benefit from the reduced level of consolidated interest expense on the $16.1 million principal amount of its 6.50% Convertible Debt held by its operating segments, it will benefit from the reduced level of its outstanding 6.50% Convertible Debt due to the $35.0 million mandatory redemption which occurred in June 2006, as well as the 2006 open market purchases. During the first six months of 2006, we retired $15.9 million principal amount of our 6.50% Convertible Debt, through open market purchases.

Financial Condition

Total assets were $2.8 billion as of June 30, 2006, compared to $2.9 billion as of December 31, 2005. Shareholders’ equity was $398.3 million as of June 30, 2006, compared with $406.2 million as of December 31, 2005. Book value per share was $12.21 as of June 30, 2006, compared to $12.70 at year end 2005. The decreases in shareholders’ equity and book value per share were primarily due to an increase in unrealized losses on our invested asset portfolio. Net unrealized holding losses increased on our invested asset portfolio to $18.7 million, or 58 cents per share, as of June 30, 2006, compared to $2.8 million, or nine cents per share, at year end 2005, mainly due to higher market interest rates. At June 30, 2006, we had $32.7 million in cash and short-term investments at the holding company and its non-regulated subsidiaries.

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The components of our debt as of June 30, 2006 were as follows:

(dollar amounts in thousands)	Amount			Maturity
6.50% Convertible Debt	$	32,165			2022	1
Derivative component of 6.50% Convertible Debt		4,953
4.25% Convertible Debt2		655			2022
8.50% Senior Notes		57,500			2018
Junior subordinated debt		43,816			2033
Surplus Notes		10,000			2035
Unamortized debt discount		(786	)
Total long-term debt	$	148,303

(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 $29.7 million principal amount and $15.891 per share for $2.5 million principal amount.

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

As of June 30, 2006, our total outstanding debt was $148.3 million, compared to $196.2 million at December 31, 2005. The decrease was primarily due to the mandatory redemption and open market purchases of our 6.50% Convertible Debt. As a result of this activity, our debt-to-capital ratio has decreased to 27% as of June 30, 2006, compared to 33% as of December 31, 2005.

During the first six months of 2006, we retired $15.9 million principal amount of our 6.50% Convertible Debt, including $10.5 million in June 2006, through open market purchases by PMA Capital Corporation. We paid $17.7 million for these bond purchases, including $11.8 million for the June 2006 purchases, exclusive of accrued interest.

Also in June 2006, the Company completed the redemption of $35 million principal amount, including $9.6 million held by its consolidated operating companies, of its 6.50% Convertible Debt. This redemption reduced the par value of our consolidated convertible debt by $25.4 million. The mandatory redemption was triggered by the extraordinary dividend the Company received from PMA Capital Insurance Company (“PMACIC”). In conjunction with the redemption, PMA Capital Corporation paid $36.0 million, including $10.6 million to its consolidated operating companies, and issued 307,990 shares of its Class A Common stock. As the derivative component of the bonds was already reflected in our debt balance, the redemption and repurchase activity did not result in any significant realized gain or loss.

The PMA Insurance Group had statutory capital and surplus of $321.1 million as of June 30, 2006, compared to $315.1 million as of December 31, 2005. The PMA Insurance Group has the ability to pay $25.1 million in dividends during 2006 without the prior approval of the Pennsylvania Insurance Department. The statutory capital and surplus of PMACIC, PMA Capital Corporation’s wholly-owned run-off reinsurance subsidiary, was $126.0 million as of June 30, 2006, compared to $204.9 million as of December 31, 2005. The reduction in PMACIC’s statutory capital and surplus was due primarily to its extraordinary dividend payment of $73.5 million to PMA Capital in May 2006.

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Conference Call with Investors

As a reminder, we will hold a conference call with investors beginning at 8:30 a.m. Eastern Time on Friday, August 4^th to review our 2006 second quarter 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. 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
800-706-7741(Domestic)	888-286-8010(Domestic)
617-614-3471(International)	617-801-6888(International)
Passcode 55222075	Passcode 57654565

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 10:30 a.m. Eastern Time on Friday, August 4^th until 11:59 p.m. Eastern Time on Monday, September 4^th.

Quarterly Statistical Supplement

Our Second 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 Thursday, August 3, 2006. 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 and changing judicial interpretations of available coverage for certain insured losses;

·   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;

·   whether state or federal asbestos liability legislation is enacted and the impact of such legislation on us;

·   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 TRIEA is extended beyond its December 31, 2007 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 June 30,
(dollars in thousands)	2006			2005
Direct premiums written:
The PMA Insurance Group	$	92,434		$	90,282
Run-off Operations		47			57
Corporate and Other		(213	)		(220	)
Consolidated direct premiums written	$	92,268		$	90,119
Net premiums written:
The PMA Insurance Group	$	85,639		$	82,103
Run-off Operations		527			1,504
Corporate and Other		(213	)		(220	)
Consolidated net premiums written	$	85,953		$	83,387
Revenues:
Net premiums earned:
The PMA Insurance Group	$	94,803		$	85,541
Run-off Operations		332			3,399
Corporate and Other		(213	)		(220	)
Consolidated net premiums earned		94,922			88,720
Net investment income		11,058			12,542
Realized losses		(1,978	)		(265	)
Other revenues		7,286			4,939
Consolidated revenues	$	111,288		$	105,936
Components of net income (loss):
Pre-tax operating income (loss) (1):
The PMA Insurance Group	$	6,671		$	4,941
Run-off Operations		428			1,133
Corporate and Other		(6,128	)		(5,721	)
Pre-tax operating income		971			353
Income tax expense		447			164
Operating income		524			189
Realized losses after-tax		(1,286	)		(172	)
Net income (loss)	$	(762	)	$	17
Weighted average common shares outstanding:
Basic		32,132,618			31,723,432
Diluted		32,132,618			32,015,127

(1)   Operating income (loss), which is GAAP net income (loss) excluding net realized investment 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 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

Selected Financial Data

(Unaudited)

	Six months ended June 30,
(dollars in thousands)	2006			2005
Direct premiums written:
The PMA Insurance Group	$	220,007		$	199,194
Run-off Operations		47			213
Corporate and Other		(381	)		(414	)
Consolidated direct premiums written	$	219,673		$	198,993
Net premiums written:
The PMA Insurance Group	$	199,029		$	187,577
Run-off Operations		1,133			6,433
Corporate and Other		(381	)		(414	)
Consolidated net premiums written	$	199,781		$	193,596
Revenues:
Net premiums earned:
The PMA Insurance Group	$	186,024		$	170,241
Run-off Operations		938			6,616
Corporate and Other		(381	)		(414	)
Consolidated net premiums earned		186,581			176,443
Net investment income		22,458			24,254
Realized gains (losses)		(160	)		2,718
Other revenues		14,390			11,131
Consolidated revenues	$	223,269		$	214,546
Components of net income (loss):
Pre-tax operating income (loss) (1):
The PMA Insurance Group	$	14,812		$	11,553
Run-off Operations		589			(28,513	)
Corporate and Other		(12,267	)		(11,888	)
Pre-tax operating income (loss)		3,134			(28,848	)
Income tax expense (benefit)		1,311			(6,547	)
Operating income (loss)		1,823			(22,301	)
Realized gains (losses) after-tax		(104	)		1,767
Net income (loss)	$	1,719		$	(20,534	)
Weighted average common shares outstanding:
Basic		32,014,150			31,559,468
Diluted		32,540,905			31,559,468

(1)   Operating income (loss), which is GAAP net income (loss) excluding net realized investment 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 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 Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
(in thousands, except per share data)	2006			2005
Assets:
Investments:
Fixed maturities available for sale	$	913,376		$	1,049,254
Short-term investments		70,994			57,997
Short-term investments, loaned securities collateral		4,771			-
Total investments		989,141			1,107,251
Cash		26,004			30,239
Accrued investment income		9,312			11,528
Premiums receivable		205,825			197,582
Reinsurance receivables		1,071,332			1,094,674
Deferred income taxes		110,452			103,656
Deferred acquisition costs		37,336			34,236
Funds held by reinsureds		151,873			146,374
Other assets		171,713			162,505
Total assets	$	2,772,988		$	2,888,045
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,727,369		$	1,820,043
Unearned premiums		189,140			173,432
Debt		148,303			196,181
Accounts payable, accrued expenses
and other liabilities		220,350			209,654
Funds held under reinsurance treaties		79,966			78,058
Dividends to policyholders		4,725			4,452
Payable under securities loan agreements		4,804			2
Total liabilities		2,374,657			2,481,822
Shareholders' Equity:
Class A Common stock		171,090			171,090
Additional paid-in capital		110,552			109,331
Retained earnings		180,626			187,265
Accumulated other comprehensive loss		(37,630	)		(22,684	)
Treasury stock, at cost		(26,307	)		(38,779	)
Total shareholders' equity		398,331			406,223
Total liabilities and shareholders' equity	$	2,772,988		$	2,888,045
Shareholders' equity per share	$	12.21		$	12.70

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PMA Capital Corporation

GAAP Consolidated Statements of Operations

(Unaudited)

	Three months ended June 30,
(in thousands, except per share data)	2006			2005
Gross premiums written	$	100,075		$	95,069
Net premiums written	$	85,953		$	83,387
Revenues:
Net premiums earned	$	94,922		$	88,720
Net investment income		11,058			12,542
Net realized investment losses		(1,978	)		(265	)
Other revenues		7,286			4,939
Total revenues		111,288			105,936
Expenses:
Losses and loss adjustment expenses		66,379			63,261
Acquisition expenses		19,552			17,983
Operating expenses		21,580			18,802
Dividends to policyholders		1,011			1,762
Interest expense		3,773			4,040
Total losses and expenses		112,295			105,848
Pre-tax income (loss)		(1,007	)		88
Income tax expense (benefit):
Current		-			-
Deferred		(245	)		71
Total income tax expense (benefit)		(245	)		71
Net income (loss)	$	(762	)	$	17
Net income (loss) per share:
Basic	$	(0.02	)	$	0.00
Diluted	$	(0.02	)	$	0.00

11

PMA Capital Corporation

GAAP Consolidated Statements of Operations

(Unaudited)

	Six months ended June 30,
(in thousands, except per share data)	2006			2005
Gross premiums written	$	234,042		$	216,382
Net premiums written	$	199,781		$	193,596
Revenues:
Net premiums earned	$	186,581		$	176,443
Net investment income		22,458			24,254
Net realized investment gains (losses)		(160	)		2,718
Other revenues		14,390			11,131
Total revenues		223,269			214,546
Expenses:
Losses and loss adjustment expenses		131,772			157,249
Acquisition expenses		36,877			36,654
Operating expenses		41,567			36,500
Dividends to policyholders		2,433			2,264
Interest expense		7,646			8,009
Total losses and expenses		220,295			240,676
Pre-tax income (loss)		2,974			(26,130	)
Income tax expense (benefit):
Current		-			-
Deferred		1,255			(5,596	)
Total income tax expense (benefit)		1,255			(5,596	)
Net income (loss)	$	1,719		$	(20,534	)
Net income (loss) per share:
Basic	$	0.05		$	(0.65	)
Diluted	$	0.05		$	(0.65	)

12

EX-99.2

Exhibit 99.2

PMA Capital Corporation
Statistical Supplement
Second Quarter - 2006
Table of Contents
		Page
Consolidated Highlights:
Selected Financial Data - Second Quarter				1
Selected Financial Data - Year-to-date				2
Consolidated Statements of Operations - Per Share Data				3
Consolidated Statements of Operations - Second Quarter				5
Consolidated Statements of Operations - Year-to-date				6
Consolidated Balance Sheets				7
Invested Assets and Net Investment Income; Debt				8
Segment Information:
Statements of Operations - Consolidating - Year-to-date		9	-	10
Statements of Operations - Consolidating - Second 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
	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)
	2nd			3rd			4th			1st			2nd			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			2nd
	2005			2005			2005			2006			2006			Quarter
Net Premiums Written by Segment:
PMA Insurance Group	$	82,103		$	116,877		$	71,339		$	113,390		$	85,639			4.3	%
Run-off Operations		1,504			789			3,028			606			527			-65.0	%
Corporate & Other		(220	)		(195	)		(209	)		(168	)		(213	)		3.2	%
Net premiums written	$	83,387		$	117,471		$	74,158		$	113,828		$	85,953			3.1	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	4,941		$	6,600		$	3,867		$	8,141		$	6,671			35.0	%
Run-off Operations		1,133			(258	)		1,838			161			428			-62.2	%
Corporate & Other		(5,721	)		(5,609	)		(6,722	)		(6,139	)		(6,128	)		-7.1	%
Pre-tax operating income (loss)		353			733			(1,017	)		2,163			971			NM
Net realized investment gains (losses)		(265	)		483			(1,084	)		1,818			(1,978	)		NM
Pre-tax income (loss)		88			1,216			(2,101	)		3,981			(1,007	)		NM
Income tax expense (benefit)		71			476			(875	)		1,500			(245	)		NM
Net income (loss)	$	17		$	740		$	(1,226	)	$	2,481		$	(762	)		NM
After-tax operating income (loss)	$	189		$	426		$	(521	)	$	1,299		$	524			NM
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	-		$	0.02		$	(0.04	)	$	0.08		$	(0.02	)		NM
Less the impact of:
Realized gains (losses) after tax		(0.01	)		0.01			(0.02	)		0.04			(0.04	)		NM
After-tax operating income (loss)	$	0.01		$	0.01		$	(0.02	)	$	0.04		$	0.02			100.0	%
Capitalization:
Debt	$	208,586		$	216,808		$	196,181		$	189,181		$	148,303			-28.9	%
Shareholders' equity excluding FAS 115 unrealized gain (loss)		412,330			413,513			409,019			413,516			417,064			1.1	%
Total capitalization excluding FAS 115 unrealized gain (loss)		620,916			630,321			605,200			602,697			565,367			-8.9	%
FAS 115 unrealized gain (loss)		17,266			1,151			(2,796	)		(13,941	)		(18,733	)		NM
Total capitalization including FAS 115 unrealized gain (loss)	$	638,182		$	631,472		$	602,404		$	588,756		$	546,634			-14.3	%
Book Value Per Share:
Excluding FAS 115 unrealized gain (loss)	$	12.93		$	12.94		$	12.79		$	12.83		$	12.79			-1.1	%
Including FAS 115 unrealized gain (loss)	$	13.47		$	12.98		$	12.70		$	12.39		$	12.21			-9.4	%
Debt to Total Capital:
Excluding FAS 115 unrealized gain (loss)		33.6	%		34.4	%		32.4	%		31.4	%		26.2	%		-22.0	%
Including FAS 115 unrealized gain (loss)		32.7	%		34.3	%		32.6	%		32.1	%		27.1	%		-17.1	%
Interest Coverage:
Income before interest and income taxes
to interest expense		1.02			1.30			0.47			2.03			0.73			-28.4	%
Operating income before interest and income taxes
to interest expense		1.09			1.18			0.75			1.56			1.26			15.6	%

1

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
	Six			Six			% Change
	Months			Months			Six
	2006			2005			Months
Net Premiums Written by Segment:
PMA Insurance Group	$	199,029		$	187,577			6.1	%
Run-off Operations		1,133			6,433			-82.4	%
Corporate & Other		(381	)		(414	)		8.0	%
Net premiums written	$	199,781		$	193,596			3.2	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	14,812		$	11,553			28.2	%
Run-off Operations		589			(28,513	)		NM
Corporate & Other		(12,267	)		(11,888	)		-3.2	%
Pre-tax operating income (loss)		3,134			(28,848	)		NM
Net realized investment gains (losses)		(160	)		2,718			NM
Pre-tax income (loss)		2,974			(26,130	)		NM
Income tax expense (benefit)		1,255			(5,596	)		NM
Net income (loss)	$	1,719		$	(20,534	)		NM
After-tax operating income (loss)	$	1,823		$	(22,301	)		NM
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.05		$	(0.65	)		NM
Less the impact of:
Realized gains (losses) after tax		(0.01	)		0.06			NM
After-tax operating income (loss)	$	0.06		$	(0.71	)		NM

2

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
	2nd		3rd		4th			1st		2nd			Six		Six
	Quarter		Quarter		Quarter			Quarter		Quarter			Months		Months
	2005		2005		2005			2006		2006			2006		2005
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	-	$	0.02	$	(0.04	)	$	0.08	$	(0.02	)	$	0.05	$	(0.65	)
Pre-tax operating income (loss)	$	0.01	$	0.02	$	(0.03	)	$	0.07	$	0.03		$	0.10	$	(0.91	)
After-tax operating income (loss)	$	0.01	$	0.01	$	(0.02	)	$	0.04	$	0.02		$	0.06	$	(0.71	)
Diluted weighted average common
shares outstanding		32,015,127		32,244,295		31,833,384			32,405,934		32,132,618			32,540,905		31,559,468
Dividends declared:
Class A Common stock	$	-	$	-	$	-		$	-	$	-		$	-	$	-
Actual common shares issued
and outstanding		31,885,541		31,956,983		31,983,283			32,239,288		32,613,234			32,613,234		31,885,541
Class A Common Stock prices:
High	$	9.00	$	9.50	$	9.73		$	10.43	$	10.49		$	10.49	$	10.65
Low	$	5.91	$	7.83	$	7.99		$	8.68	$	9.24		$	8.68	$	5.91
Close	$	8.83	$	8.78	$	9.13		$	10.18	$	10.30		$	10.30	$	8.83

3

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4

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
	2nd			3rd		4th			1st		2nd			% Change
	Quarter			Quarter		Quarter			Quarter		Quarter			2nd
	2005			2005		2005			2006		2006			Quarter
Gross Premiums Written	$	95,069		$	130,106	$	87,240		$	133,967	$	100,075			5.3	%
Net Premiums Written	$	83,387		$	117,471	$	74,158		$	113,828	$	85,953			3.1	%
Revenues:
Net premiums earned	$	88,720		$	92,223	$	99,364		$	91,659	$	94,922			7.0	%
Net investment income		12,542			12,648		11,761			11,400		11,058			-11.8	%
Net realized investment gains (losses)		(265	)		483		(1,084	)		1,818		(1,978	)		NM
Other revenues		4,939			6,209		6,946			7,104		7,286			47.5	%
Total revenues		105,936			111,563		116,987			111,981		111,288			5.1	%
Expenses:
Losses and loss adjustment expenses		63,261			68,112		69,713			65,393		66,379			4.9	%
Acquisition expenses		17,983			19,691		19,536			17,325		19,552			8.7	%
Operating expenses		18,802			17,872		23,499			19,987		21,580			14.8	%
Dividends to policyholders		1,762			567		2,343			1,422		1,011			-42.6	%
Interest expense		4,040			4,105		3,997			3,873		3,773			-6.6	%
Total losses and expenses		105,848			110,347		119,088			108,000		112,295			6.1	%
Pre-tax income (loss)		88			1,216		(2,101	)		3,981		(1,007	)		NM
Income tax expense (benefit):
Current		-			-		-			-		-			NM
Deferred		71			476		(875	)		1,500		(245	)		NM
Total income tax expense (benefit)		71			476		(875	)		1,500		(245	)		NM
Net income (loss)	$	17		$	740	$	(1,226	)	$	2,481	$	(762	)		NM
Pre-tax operating income (loss)	$	353		$	733	$	(1,017	)	$	2,163	$	971			NM
After-tax operating income (loss)	$	189		$	426	$	(521	)	$	1,299	$	524			NM

5

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
	Six			Six			% Change
	Months			Months			Six
	2006			2005			Months
Gross Premiums Written	$	234,042		$	216,382			8.2	%
Net Premiums Written	$	199,781		$	193,596			3.2	%
Revenues:
Net premiums earned	$	186,581		$	176,443			5.7	%
Net investment income		22,458			24,254			-7.4	%
Net realized investment gains (losses)		(160	)		2,718			NM
Other revenues		14,390			11,131			29.3	%
Total revenues		223,269			214,546			4.1	%
Expenses:
Losses and loss adjustment expenses		131,772			157,249			-16.2	%
Acquisition expenses		36,877			36,654			0.6	%
Operating expenses		41,567			36,500			13.9	%
Dividends to policyholders		2,433			2,264			7.5	%
Interest expense		7,646			8,009			-4.5	%
Total losses and expenses		220,295			240,676			-8.5	%
Pre-tax income (loss)		2,974			(26,130	)		NM
Income tax expense (benefit):
Current		-			-			NM
Deferred		1,255			(5,596	)		NM
Total income tax expense (benefit)		1,255			(5,596	)		NM
Net income (loss)	$	1,719		$	(20,534	)		NM
Pre-tax operating income (loss)	$	3,134		$	(28,848	)		NM
After-tax operating income (loss)	$	1,823		$	(22,301	)		NM

6

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
	2nd			3rd			4th			1st			2nd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2005			2005			2005			2006			2006
Assets:
Investments in fixed maturities available for sale	$	1,256,169		$	1,184,301		$	1,049,254		$	994,972		$	913,376
Short-term investments		61,058			67,636			57,997			63,641			70,994
Short-term investments, loaned securities collateral		90,114			63,751			-			9,991			4,771
Total investments		1,407,341			1,315,688			1,107,251			1,068,604			989,141
Cash		30,464			43,282			30,239			13,667			26,004
Accrued investment income		14,147			13,703			11,528			11,395			9,312
Premiums receivable		183,713			212,847			197,582			209,354			205,825
Reinsurance receivables		1,129,857			1,115,953			1,094,674			1,086,830			1,071,332
Deferred income taxes		90,301			98,568			103,656			107,908			110,452
Deferred acquisition costs		34,655			39,432			34,236			39,308			37,336
Funds held by reinsureds		150,078			153,064			146,374			148,512			151,873
Other assets		169,028			167,192			162,505			179,061			171,713
Total assets	$	3,209,584		$	3,159,729		$	2,888,045		$	2,864,639		$	2,772,988
Liabilities:
Unpaid losses and loss adjustment expenses	$	2,005,386		$	1,966,907		$	1,820,043		$	1,776,822		$	1,727,369
Unearned premiums		175,025			199,153			173,432			199,129			189,140
Debt		208,586			216,808			196,181			189,181			148,303
Accounts payable, accrued expenses
and other liabilities		191,309			198,441			209,654			205,114			220,350
Funds held under reinsurance treaties		105,572			96,067			78,058			79,815			79,966
Dividends to policyholders		3,992			3,931			4,452			4,998			4,725
Payable under securities loan agreements		90,118			63,758			2			10,005			4,804
Total liabilities		2,779,988			2,745,065			2,481,822			2,465,064			2,374,657
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			110,042			110,552
Retained earnings		188,532			188,409			187,265			185,393			180,626
Accumulated other comprehensive income (loss)		1,377			(14,861	)		(22,684	)		(33,358	)		(37,630	)
Treasury stock, at cost		(40,734	)		(39,305	)		(38,779	)		(33,592	)		(26,307	)
Total shareholders' equity		429,596			414,664			406,223			399,575			398,331
Total liabilities and shareholders' equity	$	3,209,584		$	3,159,729		$	2,888,045		$	2,864,639		$	2,772,988

7

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollars in Thousands)
	2nd			3rd			4th			1st			2nd			Six			Six
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2005			2006			2006			2006			2005
Total Investments & Cash
As reported	$	1,437,805		$	1,358,970		$	1,137,490		$	1,082,271		$	1,015,145		$	1,015,145		$	1,437,805
Less:
Securities lending activity		90,118			63,758			2			10,005			4,804			4,804			90,118
Unrealized gain (loss)		26,563			1,771			(4,302	)		(21,448	)		(28,820	)		(28,820	)		26,563
Total adjusted investments & cash	$	1,321,124		$	1,293,441		$	1,141,790		$	1,093,714		$	1,039,161		$	1,039,161		$	1,321,124
Net Investment Income
As reported	$	12,542		$	12,648		$	11,761		$	11,400		$	11,058		$	22,458		$	24,254
Funds held:
Assumed		129			535			545			335			537			872			316
Ceded		(1,871	)		(1,694	)		(1,897	)		(1,519	)		(1,643	)		(3,162	)		(4,308	)
Total funds held		(1,742	)		(1,159	)		(1,352	)		(1,184	)		(1,106	)		(2,290	)		(3,992	)
Total adjusted investment income	$	14,284		$	13,807		$	13,113		$	12,584		$	12,164		$	24,748		$	28,246
Yield
As reported		3.42	%		3.62	%		3.77	%		4.11	%		4.22	%		4.17	%		3.31	%
Investment portfolio		4.21	%		4.22	%		4.31	%		4.50	%		4.56	%		4.53	%		4.08	%
Duration (in years)		3.9			3.7			3.7			3.7			3.5			3.5			3.9

PMA Capital Corporation
Debt
(Dollars in Thousands)
		Amount
		Outstanding			Maturity
	6.50% convertible debt	$	32,165		20221
	Derivative component of 6.50% convertible debt		4,953
	4.25% convertible debt		655		20222
	8.50% senior notes		57,500		2018
	Junior subordinated debt 3		43,816		2033
	Surplus notes 4		10,000		2035
	Unamortized debt discount		(786	)
	Total long-term debt	$	148,303
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 $29.7 million principal amount and $15.891 per share for $2.5 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 junior subordinated debt is 9.39% as of June 30, 2006.
4	Interest rate on surplus notes is 9.63% as of June 30, 2006.

8

PMA Capital Corporation
Statements of Operations - Consolidating
Six Months Ended June 30, 2006
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	233,065	$	(381	)	$	1,358		$	234,042
Net Premiums Written	$	199,029	$	(381	)	$	1,133		$	199,781
Revenues:
Net premiums earned	$	186,024	$	(381	)	$	938		$	186,581
Net investment income		17,312		(463	)		5,609			22,458
Other revenues		14,239		151			-			14,390
Operating revenues		217,575		(693	)		6,547			223,429
Losses and Expenses:
Losses and loss adjustment expenses		132,201		-			(429	)		131,772
Acquisition expenses		37,142		-			(265	)		36,877
Operating expenses		30,518		4,397			6,652			41,567
Dividends to policyholders		2,433		-			-			2,433
Total losses and expenses		202,294		4,397			5,958			212,649
Operating income (loss) before income taxes
and interest expense		15,281		(5,090	)		589			10,780
Interest expense		469		7,177			-			7,646
Pre-tax operating income (loss)	$	14,812	$	(12,267	)	$	589			3,134
Net realized investment losses										(160	)
Pre-tax income									$	2,974

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

9

PMA Capital Corporation
Statements of Operations - Consolidating
Six Months Ended June 30, 2005
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	209,952	$	(414	)	$	6,844		$	216,382
Net Premiums Written	$	187,577	$	(414	)	$	6,433		$	193,596
Revenues:
Net premiums earned	$	170,241	$	(414	)	$	6,616		$	176,443
Net investment income		15,257		528			8,469			24,254
Other revenues		10,871		260			-			11,131
Operating revenues		196,369		374			15,085			211,828
Losses and Expenses:
Losses and loss adjustment expenses		123,549		-			33,700			157,249
Acquisition expenses		34,021		-			2,633			36,654
Operating expenses		24,982		4,253			7,265			36,500
Dividends to policyholders		2,264		-			-			2,264
Total losses and expenses		184,816		4,253			43,598			232,667
Operating income (loss) before income taxes
and interest expense		11,553		(3,879	)		(28,513	)		(20,839	)
Interest expense		-		8,009			-			8,009
Pre-tax operating income (loss)	$	11,553	$	(11,888	)	$	(28,513	)		(28,848	)
Net realized investment gains										2,718
Pre-tax loss									$	(26,130	)

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

10

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended June 30, 2006
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	99,328	$	(213	)	$	960		$	100,075
Net Premiums Written	$	85,639	$	(213	)	$	527		$	85,953
Revenues:
Net premiums earned	$	94,803	$	(213	)	$	332		$	94,922
Net investment income		8,753		(103	)		2,408			11,058
Other revenues		7,165		121			-			7,286
Operating revenues		110,721		(195	)		2,740			113,266
Losses and Expenses:
Losses and loss adjustment expenses		67,682		-			(1,303	)		66,379
Acquisition expenses		18,923		-			629			19,552
Operating expenses		16,193		2,401			2,986			21,580
Dividends to policyholders		1,011		-			-			1,011
Total losses and expenses		103,809		2,401			2,312			108,522
Operating income (loss) before income taxes
and interest expense		6,912		(2,596	)		428			4,744
Interest expense		241		3,532			-			3,773
Pre-tax operating income (loss)	$	6,671	$	(6,128	)	$	428			971
Net realized investment losses										(1,978	)
Pre-tax loss									$	(1,007	)

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

11

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended June 30, 2005
(In Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations		Consolidated
Gross Premiums Written	$	93,680	$	(220	)	$	1,609	$	95,069
Net Premiums Written	$	82,103	$	(220	)	$	1,504	$	83,387
Revenues:
Net premiums earned	$	85,541	$	(220	)	$	3,399	$	88,720
Net investment income		7,716		257			4,569		12,542
Other revenues		4,906		33			-		4,939
Operating revenues		98,163		70			7,968		106,201
Losses and Expenses:
Losses and loss adjustment expenses		61,331		-			1,930		63,261
Acquisition expenses		17,254		-			729		17,983
Operating expenses		12,875		1,751			4,176		18,802
Dividends to policyholders		1,762		-			-		1,762
Total losses and expenses		93,222		1,751			6,835		101,808
Operating income (loss) before income taxes
and interest expense		4,941		(1,681	)		1,133		4,393
Interest expense		-		4,040			-		4,040
Pre-tax operating income (loss)	$	4,941	$	(5,721	)	$	1,133		353
Net realized investment losses									(265	)
Pre-tax income								$	88

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

12

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
	2nd		3rd		4th		1st		2nd		Six		Six		% Change			% Change
	Quarter		Quarter		Quarter		Quarter		Quarter		Months		Months		2nd			Six
	2005		2005		2005		2006		2006		2006		2005		Quarter			Months
Gross Premiums Written	$	93,680	$	129,163	$	82,490	$	133,737	$	99,328	$	233,065	$	209,952		6.0	%		11.0	%
Net Premiums Written	$	82,103	$	116,877	$	71,339	$	113,390	$	85,639	$	199,029	$	187,577		4.3	%		6.1	%
Revenues:
Net premiums earned	$	85,541	$	92,214	$	96,187	$	91,221	$	94,803	$	186,024	$	170,241		10.8	%		9.3	%
Net investment income		7,716		8,160		8,328		8,559		8,753		17,312		15,257		13.4	%		13.5	%
Other revenues		4,906		6,172		6,837		7,074		7,165		14,239		10,871		46.0	%		31.0	%
Total revenues		98,163		106,546		111,352		106,854		110,721		217,575		196,369		12.8	%		10.8	%
Losses and Expenses:
Losses and loss adjustment expenses		61,331		67,995		68,732		64,519		67,682		132,201		123,549		10.4	%		7.0	%
Acquisition expenses		17,254		18,279		18,998		18,219		18,923		37,142		34,021		9.7	%		9.2	%
Operating expenses		12,875		13,100		17,191		14,325		16,193		30,518		24,982		25.8	%		22.2	%
Dividends to policyholders		1,762		567		2,343		1,422		1,011		2,433		2,264		-42.6	%		7.5	%
Total losses and expenses		93,222		99,941		107,264		98,485		103,809		202,294		184,816		11.4	%		9.5	%
Operating income before income taxes
and interest expense		4,941		6,605		4,088		8,369		6,912		15,281		11,553		39.9	%		32.3	%
Interest expense		-		5		221		228		241		469		-		NM			NM
Pre-tax operating income	$	4,941	$	6,600	$	3,867	$	8,141	$	6,671	$	14,812	$	11,553		35.0	%		28.2	%

13

PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
	2nd Quarter 2005			3rd Quarter 2005			4th Quarter 2005			1st Quarter 2006			2nd Quarter 2006			Six Months 2006			Six Months 2005			Point Chg. 2nd Quarter Better (Worse)			Point Chg. Six Months Better (Worse)
Ratios - GAAP Basis:
Loss and LAE ratio		71.7	%		73.7	%		71.5	%		70.7	%		71.4	%		71.1	%		72.6	%		0.3			1.5
Expense ratio:
Acquisition expenses		20.2	%		19.8	%		19.8	%		20.0	%		20.0	%		20.0	%		20.0	%		0.2			-
Operating expenses 1		10.3	%		9.2	%		12.5	%		9.8	%		10.4	%		10.1	%		9.9	%		(0.1	)		(0.2	)
Total expense ratio		30.5	%		29.0	%		32.3	%		29.8	%		30.4	%		30.1	%		29.9	%		0.1			(0.2	)
Policyholders' dividend ratio		2.1	%		0.6	%		2.4	%		1.6	%		1.1	%		1.3	%		1.3	%		1.0			-
Combined ratio		104.3	%		103.3	%		106.2	%		102.1	%		102.9	%		102.5	%		103.8	%		1.4			1.3
Net investment income ratio		-9.0	%		-8.8	%		-8.7	%		-9.4	%		-9.2	%		-9.3	%		-9.0	%		0.2			0.3
Operating ratio		95.3	%		94.5	%		97.5	%		92.7	%		93.7	%		93.2	%		94.8	%		1.6			1.6

¹ The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $8.9 million, $8.4 million, $12.1 million, $8.9 million and $10.0 million for the second, third and fourth quarters of 2005 and the first and second quarters of 2006, respectively.

14

PMA Capital Corporation
Statements of Operations - Run-off Operations
(Dollar Amounts in Thousands)
	2nd		3rd			4th		1st			2nd			Six			Six			% Change			% Change
	Quarter		Quarter			Quarter		Quarter			Quarter			Months			Months			2nd			Six
	2005		2005			2005		2006			2006			2006			2005			Quarter			Months
Gross Premiums Written	$	1,609	$	1,138		$	4,959	$	398		$	960		$	1,358		$	6,844			-40.3	%		-80.2	%
Net Premiums Written	$	1,504	$	789		$	3,028	$	606		$	527		$	1,133		$	6,433			-65.0	%		-82.4	%
Revenues:
Net premiums earned	$	3,399	$	204		$	3,386	$	606		$	332		$	938		$	6,616			-90.2	%		-85.8	%
Net investment income		4,569		4,217			3,652		3,201			2,408			5,609			8,469			-47.3	%		-33.8	%
Total revenues		7,968		4,421			7,038		3,807			2,740			6,547			15,085			-65.6	%		-56.6	%
Losses and Expenses:
Losses and loss adjustment expenses		1,930		117			981		874			(1,303	)		(429	)		33,700			NM			NM
Acquisition expenses		729		1,412			538		(894	)		629			(265	)		2,633			-13.7	%		NM
Operating expenses		4,176		3,150			3,681		3,666			2,986			6,652			7,265			-28.5	%		-8.4	%
Total losses and expenses		6,835		4,679			5,200		3,646			2,312			5,958			43,598			-66.2	%		-86.3	%
Pre-tax operating income (loss)	$	1,133	$	(258	)	$	1,838	$	161		$	428		$	589		$	(28,513	)		-62.2	%		NM

15

PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
	2nd			3rd			4th			1st			2nd			Six			Six			% Change			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months			2nd			Six
	2005			2005			2005			2006			2006			2006			2005			Quarter			Months
Gross Premiums Written	$	(220	)	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(381	)	$	(414	)		3.2	%		8.0	%
Net Premiums Written	$	(220	)	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(381	)	$	(414	)		3.2	%		8.0	%
Revenues:
Net premiums earned	$	(220	)	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(381	)	$	(414	)		3.2	%		8.0	%
Net investment income		257			271			(219	)		(360	)		(103	)		(463	)		528			NM			NM
Other revenues		33			37			109			30			121			151			260			NM			-41.9	%
Total revenues		70			113			(319	)		(498	)		(195	)		(693	)		374			NM			NM
Losses and Expenses:
Operating expenses		1,751			1,622			2,627			1,996			2,401			4,397			4,253			37.1	%		3.4	%
Total losses and expenses		1,751			1,622			2,627			1,996			2,401			4,397			4,253			37.1	%		3.4	%
Operating loss before income taxes
and interest expense		(1,681	)		(1,509	)		(2,946	)		(2,494	)		(2,596	)		(5,090	)		(3,879	)		-54.4	%		-31.2	%
Interest expense		4,040			4,100			3,776			3,645			3,532			7,177			8,009			-12.6	%		-10.4	%
Pre-tax operating loss	$	(5,721	)	$	(5,609	)	$	(6,722	)	$	(6,139	)	$	(6,128	)	$	(12,267	)	$	(11,888	)		-7.1	%		-3.2	%

16

PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)
	2nd			3rd			4th			1st			2nd			Six			Six
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2005			2006			2006			2006			2005
Receipts:
Premiums and other revenues collected	$	108,706		$	90,858		$	98,661		$	104,991		$	96,652		$	201,643		$	205,381
Investment income received		14,656			15,942			16,393			15,368			14,890			30,258			29,470
Total receipts		123,362			106,800			115,054			120,359			111,542			231,901			234,851
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		14,240			16,593			20,720			3,496			17,337			20,833			18,052
Losses and LAE paid - prior years		134,182			86,329			174,212			92,597			92,004			184,601			246,494
Total losses and LAE paid		148,422			102,922			194,932			96,093			109,341			205,434			264,546
Insurance operating expenses paid		39,585			39,009			27,271			46,203			39,618			85,821			78,217
Policyholders' dividends paid		1,284			820			531			246			397			643			3,399
Interest on corporate debt		1,987			5,327			2,197			4,791			2,965			7,756			6,374
Total disbursements		191,278			148,078			224,931			147,333			152,321			299,654			352,536
Net other		1,046			3,564			(15,349	)		(12,368	)		7,406			(4,962	)		8,304
Net operating cash flows	$	(66,870	)	$	(37,714	)	$	(125,226	)	$	(39,342	)	$	(33,373	)	$	(72,715	)	$	(109,381	)

17

PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)
	2nd			3rd		4th			1st			2nd			Six			Six
	Quarter			Quarter		Quarter			Quarter			Quarter			Months			Months
	2005			2005		2005			2006			2006			2006			2005
Receipts:
Premiums and other revenues collected	$	100,170		$	91,212	$	97,910		$	99,740		$	94,320		$	194,060		$	193,318
Investment income received		9,682			10,262		10,606			10,479			10,598			21,077			19,086
Total receipts		109,852			101,474		108,516			110,219			104,918			215,137			212,404
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		14,233			16,584		20,720			3,496			17,337			20,833			18,043
Losses and LAE paid - prior years		69,276			55,520		43,853			65,113			57,537			122,650			142,275
Total Losses and LAE paid		83,509			72,104		64,573			68,609			74,874			143,483			160,318
Insurance operating expenses paid		36,988			33,988		23,305			42,110			35,129			77,239			71,226
Policyholders' dividends paid		1,284			820		531			246			397			643			3,399
Interest on corporate debt		-			-		80			224			227			451			-
Total disbursements		121,781			106,912		88,489			111,189			110,627			221,816			234,943
Net other		2,002			6,012		(18,742	)		(6,376	)		1,955			(4,421	)		15,762
Net operating cash flows	$	(9,927	)	$	574	$	1,285		$	(7,346	)	$	(3,754	)	$	(11,100	)	$	(6,777	)

18

PMA Capital Corporation
Operating Cash Flows - Run-off Operations
(In Thousands)
	2nd			3rd			4th			1st			2nd			Six			Six
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2005			2006			2006			2006			2005
Receipts:
Premiums collected	$	8,536		$	(354	)	$	751		$	5,251		$	2,332		$	7,583		$	12,063
Investment income received		4,974			5,680			5,787			4,889			4,292			9,181			10,384
Total receipts		13,510			5,326			6,538			10,140			6,624			16,764			22,447
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		7			9			-			-			-			-			9
Losses and LAE paid - prior years		64,906			30,809			130,359			27,484			34,467			61,951			104,219
Total losses and LAE paid		64,913			30,818			130,359			27,484			34,467			61,951			104,228
Insurance operating expenses paid		2,597			5,021			3,966			4,093			4,489			8,582			6,991
Total disbursements		67,510			35,839			134,325			31,577			38,956			70,533			111,219
Net other		(4,890	)		(1,912	)		4,004			1,083			1,775			2,858			(4,964	)
Net operating cash flows	$	(58,890	)	$	(32,425	)	$	(123,783	)	$	(20,354	)	$	(30,557	)	$	(50,911	)	$	(93,736	)

19

PMA Capital Corporation
Statutory Surplus
(In Thousands)
	2nd		3rd			4th			1st			2nd
	Quarter		Quarter			Quarter			Quarter			Quarter
	2005		2005			2005			2006			20061
PMA Pool 2	$	299,219	$	311,802	5	$	315,056	5	$	316,726	5	$	321,114	4,5
PMA Capital Insurance Company 3		215,348		210,663			204,920			203,261			125,989	4,6

PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(In Thousands)
	2nd			3rd			4th			1st			2nd			Six			Six
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2005			2006			20061			20061			2005
Net Premiums Written:
Workers' Compensation & Integrated
Disability	$	70,944		$	101,435		$	63,086		$	100,096		$	76,602		$	176,698		$	165,681
Other Commercial Lines		10,998			13,487			4,723			11,048			6,687			17,735			21,785
Total - PMA Pool	$	81,942		$	114,922		$	67,809		$	111,144		$	83,289		$	194,433		$	187,466
Statutory Ratios:
Loss and LAE ratio		73.0	%		73.3	%		73.0	%		71.5	%		72.5	%		72.0	%		73.2	%
Underwriting expense ratio		30.2	%		25.1	%		32.5	%		24.6	%		31.6	%		27.6	%		27.4	%
Policyholders' dividend ratio		0.8	%		0.8	%		1.1	%		0.9	%		0.1	%		0.5	%		0.9	%
Combined ratio		104.0	%		99.2	%		106.6	%		97.0	%		104.2	%		100.1	%		101.5	%
Operating ratio		95.2	%		91.2	%		98.6	%		88.4	%		96.0	%		91.7	%		93.0	%

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 $141.8 million and $5.9 million for the PMA Pool and PMA Capital Insurance Company, respectively.
5	Includes $10 million related to surplus notes.
6	In May 2006, PMA Capital Insurance Company paid an extraordinary dividend in the amount of $73.5 million to its parent, PMA Capital Corporation.

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 8/02/2006):
	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