EX-99.2 4 ex99-2.htm EXHIBIT 99.2
 

PMA Capital Corporation
Statistical Supplement
Third Quarter - 2006
     
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
  
     
 
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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
  
 Quarter
  
                            
Gross Premiums Written by Segment:
                           
    PMA Insurance Group
  
$
129,163
  
$
82,490
  
$
133,737
  
$
99,328
  
$
133,903
    
3.7
%
    Run-off Operations
   
1,138
   
4,959
   
398
   
960
   
526
   
-53.8
%
    Corporate & Other
    
(195
)
  
(209
)
  
(168
)
  
(213
)
  
(158
)
  
19.0
%
Gross premiums written
  
$
130,106
  
$
87,240
  
$
133,967
  
$
100,075
  
$
134,271
    
3.2
%
                                       
Net Premiums Written by Segment:
                                      
    PMA Insurance Group
  
$
116,877
  
$
71,339
  
$
113,390
  
$
85,639
  
$
107,795
    
-7.8
%
    Run-off Operations
   
789
   
3,028
   
606
   
527
   
701
   
-11.2
%
    Corporate & Other
    
(195
)
  
(209
)
  
(168
)
  
(213
)
  
(158
)
  
19.0
%
Net premiums written
  
$
117,471
  
$
74,158
  
$
113,828
  
$
85,953
  
$
108,338
    
-7.8
%
                                       
Major Components of Net Income (Loss):
                                     
Pre-tax operating income (loss) by segment:
                                      
    PMA Insurance Group
  
$
6,600
  
$
3,867
  
$
8,141
  
$
6,671
  
$
8,351
    
26.5
%
    Run-off Operations 
    
(258
)
  
1,838
   
161
   
428
   
174
   
NM
  
    Corporate & Other
    
(5,609
)
  
(6,722
)
  
(6,139
)
  
(6,128
)
  
(5,016
)
  
10.6
%
Pre-tax operating income (loss)
    
733
   
(1,017
)
  
2,163
   
971
   
3,509
   
NM
  
Net realized investment gains (losses)
    
483
   
(1,084
)
  
1,818
   
(1,978
)
  
(799
)
  
NM
  
Pre-tax income (loss)
    
1,216
   
(2,101
)
  
3,981
   
(1,007
)
  
2,710
   
NM
  
Income tax expense (benefit)
    
476
   
(875
)
  
1,500
   
(245
)
  
1,209
   
NM
  
Net income (loss)
  
$
740
  
$
(1,226
)
$
2,481
  
$
(762
)
$
1,501
    
NM
  
After-tax operating income (loss)
  
$
426
  
$
(521
)
$
1,299
  
$
524
  
$
2,020
    
NM
  
                                       
Diluted Earnings (Loss) Per Share:
                                      
Net income (loss)
  
$
0.02
  
$
(0.04
)
$
0.08
  
$
(0.02
)
$
0.05
    
NM
  
Less the impact of:
                                      
Realized gains (losses) after tax
    
0.01
   
(0.02
)
  
0.04
   
(0.04
)
  
(0.01
)
  
NM
  
After-tax operating income (loss)
  
$
0.01
  
$
(0.02
)
$
0.04
  
$
0.02
  
$
0.06
    
NM
  
                                       
Capitalization:
                                      
Debt
  
$
216,808
  
$
196,181
  
$
189,181
  
$
148,303
  
$
131,561
    
-39.3
%
Shareholders' equity excluding FAS 115 unrealized gain (loss)
    
413,513
   
409,019
   
413,516
   
417,064
   
418,372
   
1.2
%
Total capitalization excluding FAS 115 unrealized gain (loss)
    
630,321
   
605,200
   
602,697
   
565,367
   
549,933
   
-12.8
%
FAS 115 unrealized gain (loss)
    
1,151
   
(2,796
)
  
(13,941
)
  
(18,733
)
  
(6,169
)
  
NM
  
Total capitalization including FAS 115 unrealized gain (loss)
  
$
631,472
  
$
602,404
  
$
588,756
  
$
546,634
  
$
543,764
    
-13.9
%
                                       
Book Value Per Share:
                                      
Excluding FAS 115 unrealized gain (loss)
  
$
12.94
  
$
12.79
  
$
12.83
  
$
12.79
  
$
12.82
    
-0.9
%
Including FAS 115 unrealized gain (loss)
  
$
12.98
  
$
12.70
  
$
12.39
  
$
12.21
  
$
12.63
    
-2.7
%
                                       
Debt to Total Capital:
                                      
Excluding FAS 115 unrealized gain (loss)
    
34.4
%
  
32.4
%
  
31.4
%
  
26.2
%
  
23.9
%
  
-30.5
%
Including FAS 115 unrealized gain (loss)
    
34.3
%
  
32.6
%
  
32.1
%
  
27.1
%
  
24.2
%
  
-29.4
%
                                       
Interest Coverage:
                                      
Income before interest and income taxes
                                      
to interest expense
    
1.30
   
0.47
   
2.03
   
0.73
   
1.89
   
45.4
%
                                       
Operating income before interest and income taxes
                                      
to interest expense
    
1.18
   
0.75
   
1.56
   
1.26
   
2.15
   
82.2
%
                                       
 
 
1
 

PMA Capital Corporation  
Selected Financial Data  
(Dollar Amounts in Thousands, Except Per Share Data)  
                
   
Nine
 
Nine
 
 % Change
 
   
Months
 
Months
 
 Nine
 
   
2006
  
2005
  
 Months
  
                
Gross Premiums Written by Segment:
               
    PMA Insurance Group
  
$
366,968
  
$
339,115
    
8.2
%
    Run-off Operations
   
1,884
   
7,982
   
-76.4
%
    Corporate & Other
    
(539
)
  
(609
)
  
11.5
%
Gross premiums written
  
$
368,313
  
$
346,488
    
6.3
%
                     
Net Premiums Written by Segment:
                    
    PMA Insurance Group
  
$
306,824
  
$
304,454
    
0.8
%
    Run-off Operations
   
1,834
   
7,222
   
-74.6
%
    Corporate & Other
    
(539
)
  
(609
)
  
11.5
%
Net premiums written
  
$
308,119
  
$
311,067
    
-0.9
%
                     
Major Components of Net Income (Loss):
                    
Pre-tax operating income (loss) by segment:
                    
    PMA Insurance Group
  
$
23,163
  
$
18,153
    
27.6
%
    Run-off Operations
   
763
   
(28,771
)
  
NM
  
    Corporate & Other
    
(17,283
)
  
(17,497
)
  
1.2
%
Pre-tax operating income (loss)
    
6,643
   
(28,115
)
  
NM
  
Net realized investment gains (losses)
    
(959
)
  
3,201
   
NM
  
Pre-tax income (loss)
    
5,684
   
(24,914
)
  
NM
  
Income tax expense (benefit)
    
2,464
   
(5,120
)
  
NM
  
Net income (loss)
  
$
3,220
  
$
(19,794
)
  
NM
  
After-tax operating income (loss)
  
$
3,843
  
$
(21,875
)
  
NM
  
                     
Diluted Earnings (Loss) Per Share:
                    
Net income (loss)
  
$
0.10
  
$
(0.63
)
  
NM
  
Less the impact of:
                    
Realized gains (losses) after tax
   
(0.02
)
  
0.06
   
NM
  
After-tax operating income (loss)
  
$
0.12
  
$
(0.69
)
  
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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
  
                                
Diluted Earnings (Loss) Per Share:
                               
                                
Net income (loss)
  
$
0.02
  
$
(0.04
)
$
0.08
  
$
(0.02
)
$
0.05
  
$
0.10
  
$
(0.63
)
                                             
Pre-tax operating income (loss)
  
$
0.02
  
$
(0.03
)
$
0.07
  
$
0.03
  
$
0.11
  
$
0.20
  
$
(0.89
)
                                             
After-tax operating income (loss)
  
$
0.01
  
$
(0.02
)
$
0.04
  
$
0.02
  
$
0.06
  
$
0.12
  
$
(0.69
)
                                             
Diluted weighted average common
                                            
      shares outstanding
    
32,244,295
   
31,833,384
   
32,405,934
   
32,132,618
   
32,922,643
   
32,669,303
   
31,631,850
 
   
                                             
Dividends declared:
                                            
Class A Common stock
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
                                             
Actual common shares issued
                                            
      and outstanding
    
31,956,983
   
31,983,283
   
32,239,288
   
32,613,234
   
32,646,689
   
32,646,689
   
31,956,983
 
   
                                             
Class A Common Stock prices:
                                            
High
  
$
9.50
  
$
9.73
  
$
10.43
  
$
10.49
  
$
10.75
  
$
10.75
  
$
10.65
  
Low
  
$
7.83
  
$
7.99
  
$
8.68
  
$
9.24
  
$
8.60
  
$
8.60
  
$
5.91
  
Close
  
$
8.78
  
$
9.13
  
$
10.18
  
$
10.30
  
$
8.82
  
$
8.82
  
$
8.78
  
                                             
 
 
3
 
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4
PMA Capital Corporation  
Consolidated Statements of Operations  
(In Thousands)  
                            
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 % Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 3rd
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 Quarter
  
                            
Gross Premiums Written
  
$
130,106
  
$
87,240
  
$
133,967
  
$
100,075
  
$
134,271
    
3.2
%
                                       
Net Premiums Written
  
$
117,471
  
$
74,158
  
$
113,828
  
$
85,953
  
$
108,338
    
-7.8
%
                                       
Revenues:
                                      
Net premiums earned
  
$
92,223
  
$
99,364
  
$
91,659
  
$
94,922
  
$
95,284
    
3.3
%
Net investment income
    
12,648
   
11,761
   
11,400
   
11,058
   
10,747
   
-15.0
%
Net realized investment gains (losses)
    
483
   
(1,084
)
  
1,818
   
(1,978
)
  
(799
)
  
NM
  
Other revenues
    
6,209
   
6,946
   
7,104
   
7,286
   
6,624
   
6.7
%
Total revenues
    
111,563
   
116,987
   
111,981
   
111,288
   
111,856
   
0.3
%
                                       
Expenses:
                                      
Losses and loss adjustment expenses
    
68,112
   
69,713
   
65,393
   
66,379
   
66,754
   
-2.0
%
Acquisition expenses
    
19,691
   
19,536
   
17,325
   
19,552
   
19,811
   
0.6
%
Operating expenses
    
17,872
   
23,499
   
19,987
   
21,580
   
18,953
   
6.0
%
Dividends to policyholders
    
567
   
2,343
   
1,422
   
1,011
   
589
   
3.9
%
Interest expense
    
4,105
   
3,997
   
3,873
   
3,773
   
3,039
   
-26.0
%
Total losses and expenses
    
110,347
   
119,088
   
108,000
   
112,295
   
109,146
   
-1.1
%
                                       
Pre-tax income (loss)
    
1,216
   
(2,101
)
  
3,981
   
(1,007
)
  
2,710
   
NM
  
                                       
Income tax expense (benefit):
                                      
Current
    
-
   
-
   
-
   
-
   
-
   
NM
  
Deferred
    
476
   
(875
)
  
1,500
   
(245
)
  
1,209
   
NM
  
                                       
Total income tax expense (benefit)
    
476
   
(875
)
  
1,500
   
(245
)
  
1,209
   
NM
  
                                       
Net income (loss)
  
$
740
  
$
(1,226
)
$
2,481
  
$
(762
)
$
1,501
    
NM
  
                                       
Pre-tax operating income (loss)
  
$
733
  
$
(1,017
)
$
2,163
  
$
971
  
$
3,509
    
NM
  
                                       
After-tax operating income (loss)
  
$
426
  
$
(521
)
$
1,299
  
$
524
  
$
2,020
    
NM
  
                                       
 
 
 
5
 

PMA Capital Corporation  
Consolidated Statements of Operations  
(In Thousands)  
                
   
Nine
  
Nine
  
 % Change
  
   
Months
  
Months
  
 Nine
 
   
2006
  
2005
  
 Months
  
                
Gross Premiums Written
  
$
368,313
  
$
346,488
    
6.3
%
                     
Net Premiums Written
  
$
308,119
  
$
311,067
    
-0.9
%
                     
Revenues:
                    
Net premiums earned
  
$
281,865
  
$
268,666
    
4.9
%
Net investment income
    
33,205
   
36,902
   
-10.0
%
Net realized investment gains (losses)
    
(959
)
  
3,201
   
NM
  
Other revenues
    
21,014
   
17,340
   
21.2
%
Total revenues
    
335,125
   
326,109
   
2.8
%
                     
Expenses:
                    
Losses and loss adjustment expenses
    
198,526
   
225,361
   
-11.9
%
Acquisition expenses
    
56,688
   
56,345
   
0.6
%
Operating expenses
    
60,520
   
54,372
   
11.3
%
Dividends to policyholders
    
3,022
   
2,831
   
6.7
%
Interest expense
    
10,685
   
12,114
   
-11.8
%
Total losses and expenses
    
329,441
   
351,023
   
-6.1
%
                     
Pre-tax income (loss)
    
5,684
   
(24,914
)
  
NM
  
                     
Income tax expense (benefit):
                    
Current
    
-
   
-
   
NM
  
Deferred
    
2,464
   
(5,120
)
  
NM
  
                     
Total income tax expense (benefit)
    
2,464
   
(5,120
)
  
NM
  
                     
Net income (loss)
  
$
3,220
  
$
(19,794
)
  
NM
  
                     
Pre-tax operating income (loss)
  
$
6,643
  
$
(28,115
)
  
NM
  
                     
After-tax operating income (loss)
  
$
3,843
  
$
(21,875
)
  
NM
  
                     
 
 
6
 

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
                       
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
   
2005
  
2005
  
2006
  
2006
  
2006
  
                       
Assets:
                      
Investments in fixed maturities available for sale
  
$
1,184,301
  
$
1,049,254
  
$
994,972
  
$
913,376
  
$
904,074
  
Short-term investments
    
67,636
   
57,997
   
63,641
   
70,994
   
59,227
 
Short-term investments, loaned securities collateral
    
63,751
   
-
   
9,991
   
4,771
   
-
 
Total investments
    
1,315,688
   
1,107,251
   
1,068,604
   
989,141
   
963,301
 
                                 
Cash
    
43,282
   
30,239
   
13,667
   
26,004
   
30,387
 
Accrued investment income
    
13,703
   
11,528
   
11,395
   
9,312
   
10,993
 
Premiums receivable
    
212,847
   
197,582
   
209,354
   
205,825
   
218,126
 
Reinsurance receivables
    
1,115,953
   
1,094,674
   
1,086,830
   
1,071,332
   
1,069,153
 
Deferred income taxes
    
98,568
   
103,656
   
107,908
   
110,452
   
102,986
 
Deferred acquisition costs
    
39,432
   
34,236
   
39,308
   
37,336
   
40,384
 
Funds held by reinsureds
    
153,064
   
146,374
   
148,512
   
151,873
   
133,222
 
Other assets
    
167,192
   
162,505
   
179,061
   
171,713
   
184,904
 
Total assets
  
$
3,159,729
  
$
2,888,045
  
$
2,864,639
  
$
2,772,988
  
$
2,753,456
  
                                 
Liabilities:
                                
Unpaid losses and loss adjustment expenses
  
$
1,966,907
  
$
1,820,043
  
$
1,776,822
  
$
1,727,369
  
$
1,690,483
  
Unearned premiums
    
199,153
   
173,432
   
199,129
   
189,140
   
217,506
 
Debt
    
216,808
   
196,181
   
189,181
   
148,303
   
131,561
 
Accounts payable, accrued expenses
                                
and other liabilities
    
198,441
   
209,654
   
205,114
   
220,350
   
219,146
 
Funds held under reinsurance treaties
    
96,067
   
78,058
   
79,815
   
79,966
   
77,813
 
Dividends to policyholders
    
3,931
   
4,452
   
4,998
   
4,725
   
4,744
 
Payable under securities loan agreements
    
63,758
   
2
   
10,005
   
4,804
   
-
 
Total liabilities
    
2,745,065
   
2,481,822
   
2,465,064
   
2,374,657
   
2,341,253
 
                                 
Shareholders' Equity:
                                
Class A Common stock
    
171,090
   
171,090
   
171,090
   
171,090
   
171,090
 
Additional paid-in capital
    
109,331
   
109,331
   
110,042
   
110,552
   
111,116
 
Retained earnings
    
188,409
   
187,265
   
185,393
   
180,626
   
181,719
 
Accumulated other comprehensive loss
    
(14,861
)
  
(22,684
)
  
(33,358
)
  
(37,630
)
  
(26,010
)
Treasury stock, at cost
    
(39,305
)
  
(38,779
)
  
(33,592
)
  
(26,307
)
  
(25,712
)
Total shareholders' equity
    
414,664
   
406,223
   
399,575
   
398,331
   
412,203
 
Total liabilities and shareholders' equity
  
$
3,159,729
  
$
2,888,045
  
$
2,864,639
  
$
2,772,988
  
$
2,753,456
  
                                 
                                 
 
 
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
 
   
2005
  
2005
  
2006
  
2006
  
2006
  
 2006
  
2005
  
                                
Total Investments & Cash
                               
As reported
  
$
1,358,970
  
$
1,137,490
  
$
1,082,271
  
$
1,015,145
  
$
993,688
  
$
993,688
  
$
1,358,970
  
Less:
                                            
Securities lending activity
    
63,758
   
2
   
10,005
   
4,804
   
-
   
-
   
63,758
 
Unrealized gain (loss)
    
1,771
   
(4,302
)
  
(21,448
)
  
(28,820
)
  
(9,490
)
  
(9,490
)
  
1,771
 
Total adjusted investments & cash
  
$
1,293,441
  
$
1,141,790
  
$
1,093,714
  
$
1,039,161
  
$
1,003,178
  
$
1,003,178
  
$
1,293,441
  
                                             
Net Investment Income
                                            
As reported
  
$
12,648
  
$
11,761
  
$
11,400
  
$
11,058
  
$
10,747
  
$
33,205
  
$
36,902
  
Funds held:
                                            
Assumed
   
535
   
545
   
335
   
537
   
185
   
1,057
   
851
 
Ceded
   
(1,694
)
  
(1,897
)
  
(1,519
)
  
(1,643
)
  
(1,482
)
  
(4,644
)
  
(6,002
)
Total funds held
    
(1,159
)
  
(1,352
)
  
(1,184
)
  
(1,106
)
  
(1,297
)
  
(3,587
)
  
(5,151
)
                                             
Total adjusted investment income
  
$
13,807
  
$
13,113
  
$
12,584
  
$
12,164
  
$
12,044
  
$
36,792
  
$
42,053
  
                                             
Yield
                                            
As reported
    
3.62
%
  
3.77
%
  
4.11
%
  
4.22
%
  
4.28
%
  
4.19
%
  
3.42
%
Investment portfolio
    
4.22
%
  
4.31
%
  
4.50
%
  
4.56
%
  
4.72
%
  
4.59
%
  
4.12
%
                                             
Duration (in years)
    
3.7
   
3.7
   
3.7
   
3.5
   
3.4
   
3.4
   
3.7
 
                                             
                                             
 

PMA Capital Corporation
Debt
(Dollars in Thousands)
       
Amount
      
       
Outstanding
  
Maturity
  
6.50% convertible debt 
        
$
19,326
    
20221
  
Derivative component of 6.50% convertible debt
          
3,506
       
4.25% convertible debt 
          
455
   
20222
  
8.50% senior notes
          
54,900
   
2018
  
Junior subordinated debt 3
          
43,816
   
2033
  
Surplus notes 4
          
10,000
   
2035
  
Unamortized debt discount
          
(442
)
      
Total long-term debt
        
$
131,561
        
 
                       
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 $18.4 million principal amount and $15.891 per share for $941,000 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, 2008, 2010, 2012 and 2017.  Holders required us to repurchase $200,000 of this debt on September 30, 2006. 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 9.52% as of September 30, 2006.
 4     
Interest rate on surplus notes is 9.97% as of September 30, 2006.
                       

 
PMA Capital Corporation
Balance Sheet Impact of Commutations - Run-off Operations
(Dollars in Thousands)
               
   
3rd Quarter and Nine Months 2006
  
Assets
  
Assumed
 
Ceded
 
Total
  
Funds held by reinsureds
  
$
(20,248
)
$
-
  
$
(20,248
)
                     
Liabilities
    
Assumed
 
 
Ceded
 
 
Total
  
Unpaid losses and loss adjustment expenses
  
$
(23,013
)
$
-
  
$
(23,013
)
                     
                     
 
 
8
 

PMA Capital Corporation
Statements of Operations - Consolidating
Nine Months Ended September 30, 2006
(In Thousands)
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
     
       
Group
 
& Other1
  
Operations
  
Consolidated
 
                       
Gross Premiums Written
        
$
366,968
  
$
(539
)
$
1,884
  
$
368,313
  
                                 
Net Premiums Written
        
$
306,824
  
$
(539
)
$
1,834
  
$
308,119
  
                                 
Revenues:
                                
Net premiums earned
        
$
280,720
  
$
(539
)
$
1,684
  
$
281,865
  
Net investment income
          
26,310
   
(409
)
  
7,304
   
33,205
 
Other revenues
          
20,812
   
202
   
-
   
21,014
 
Operating revenues
          
327,842
   
(746
)
  
8,988
   
336,084
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
200,456
   
-
   
(1,930
)
  
198,526
 
Acquisition expenses
          
56,240
   
-
   
448
   
56,688
 
Operating expenses
          
44,238
   
6,575
   
9,707
   
60,520
 
Dividends to policyholders
          
3,022
   
-
   
-
   
3,022
 
Total losses and expenses
          
303,956
   
6,575
   
8,225
   
318,756
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
23,886
   
(7,321
)
  
763
   
17,328
 
                                 
Interest expense
          
723
   
9,962
   
-
   
10,685
 
                                 
Pre-tax operating income (loss)
        
$
23,163
  
$
(17,283
)
$
763
    
6,643
 
                                 
Net realized investment losses
                            
(959
)
                                 
Pre-tax income
                          
$
5,684
  
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
 
 
9
 

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
)
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
                                 
 
 
 
10
 

PMA Capital Corporation
  
Statements of Operations - Consolidating
  
Three Months Ended September 30, 2006
  
(In Thousands)
  
                       
       
PMA
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
Corporate
 
Run-off
 
 
 
 
 
 
 
Group
 
& Other1
 
Operations
 
Consolidated
  
                       
Gross Premiums Written
        
$
133,903
  
$
(158
)
$
526
  
$
134,271
  
                                 
Net Premiums Written
        
$
107,795
  
$
(158
)
$
701
  
$
108,338
  
                                 
Revenues:
                                
Net premiums earned
        
$
94,696
  
$
(158
)
$
746
  
$
95,284
  
Net investment income
          
8,998
   
54
   
1,695
   
10,747
 
Other revenues
          
6,573
   
51
   
-
   
6,624
 
Operating revenues
          
110,267
   
(53
)
  
2,441
   
112,655
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
68,255
   
-
   
(1,501
)
  
66,754
 
Acquisition expenses
          
19,098
   
-
   
713
   
19,811
 
Operating expenses
          
13,720
   
2,178
   
3,055
   
18,953
 
Dividends to policyholders
          
589
   
-
   
-
   
589
 
Total losses and expenses
          
101,662
   
2,178
   
2,267
   
106,107
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
8,605
   
(2,231
)
  
174
   
6,548
 
                                 
Interest expense
          
254
   
2,785
   
-
   
3,039
 
                                 
Pre-tax operating income (loss)
        
$
8,351
  
$
(5,016
)
$
174
    
3,509
 
                                 
Net realized investment losses
                            
(799
)
                                 
Pre-tax income
                          
$
2,710
  
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
 
 
 
11

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
  
                                 
1Corporate & 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)    
                                         
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 3rd
 
Nine
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
 
                                         
Gross Premiums Written
  
$
129,163
  
$
82,490
  
$
133,737
  
$
99,328
  
$
133,903
  
$
366,968
  
$
339,115
    
3.7
%
  
8.2
%
                                                         
Net Premiums Written
  
$
116,877
  
$
71,339
  
$
113,390
  
$
85,639
  
$
107,795
  
$
306,824
  
$
304,454
    
-7.8
%
  
0.8
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
92,214
  
$
96,187
  
$
91,221
  
$
94,803
  
$
94,696
  
$
280,720
  
$
262,455
    
2.7
%
  
7.0
%
Net investment income
    
8,160
   
8,328
   
8,559
   
8,753
   
8,998
   
26,310
   
23,417
   
10.3
%
  
12.4
%
Other revenues
    
6,172
   
6,837
   
7,074
   
7,165
   
6,573
   
20,812
   
17,043
   
6.5
%
  
22.1
%
Total revenues
    
106,546
   
111,352
   
106,854
   
110,721
   
110,267
   
327,842
   
302,915
   
3.5
%
  
8.2
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
67,995
   
68,732
   
64,519
   
67,682
   
68,255
   
200,456
   
191,544
   
0.4
%
  
4.7
%
Acquisition expenses
    
18,279
   
18,998
   
18,219
   
18,923
   
19,098
   
56,240
   
52,300
   
4.5
%
  
7.5
%
Operating expenses
    
13,100
   
17,191
   
14,325
   
16,193
   
13,720
   
44,238
   
38,082
   
4.7
%
  
16.2
%
Dividends to policyholders
    
567
   
2,343
   
1,422
   
1,011
   
589
   
3,022
   
2,831
   
3.9
%
  
6.7
%
Total losses and expenses
    
99,941
   
107,264
   
98,485
   
103,809
   
101,662
   
303,956
   
284,757
   
1.7
%
  
6.7
%
                                                         
Operating income before income taxes
                                                        
and interest expense
    
6,605
   
4,088
   
8,369
   
6,912
   
8,605
   
23,886
   
18,158
   
30.3
%
  
31.5
%
                                                         
Interest expense
    
5
   
221
   
228
   
241
   
254
   
723
   
5
   
NM
    
NM
  
                                                         
Pre-tax operating income
 
$
6,600
  
$
3,867
  
$
8,141
  
$
6,671
  
$
8,351
  
$
23,163
  
$
18,153
    
26.5
%
  
27.6
%
                                                         
                                                         
 
 
13
 

PMA Capital Corporation    
Insurance Ratios - PMA Insurance Group    
                                         
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 Point Chg.
 
Point Chg.
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 3rd Quarter
 
Nine Months
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Better Worse)
 
Better (Worse)
  
                                         
Ratios - GAAP Basis:
                                        
                                         
                                         
Loss and LAE ratio
    
73.7
%
  
71.5
%
  
70.7
%
  
71.4
%
  
72.1
%
  
71.4
%
  
73.0
%
  
1.6
   
1.6
 
                                                         
Expense ratio:
                                                        
Acquisition expenses
    
19.8
%
  
19.8
%
  
20.0
%
  
20.0
%
  
20.2
%
  
20.0
%
  
19.9
%
  
(0.4
)
  
(0.1
)
Operating expenses 1
    
9.2
%
  
12.5
%
  
9.8
%
  
10.4
%
  
8.5
%
  
9.6
%
  
9.6
%
  
0.7
   
-
 
Total expense ratio
    
29.0
%
  
32.3
%
  
29.8
%
  
30.4
%
  
28.7
%
  
29.6
%
  
29.5
%
  
0.3
   
(0.1
)
                                                         
Policyholders' dividend ratio
    
0.6
%
  
2.4
%
  
1.6
%
  
1.1
%
  
0.6
%
  
1.1
%
  
1.1
%
  
-
   
-
 
Combined ratio
    
103.3
%
  
106.2
%
  
102.1
%
  
102.9
%
  
101.4
%
  
102.1
%
  
103.6
%
  
1.9
   
1.5
 
                                                         
Net investment income ratio
    
-8.8
%
  
-8.7
%
  
-9.4
%
  
-9.2
%
  
-9.5
%
  
-9.4
%
  
-8.9
%
  
0.7
   
0.5
 
Operating ratio
    
94.5
%
  
97.5
%
  
92.7
%
  
93.7
%
  
91.9
%
  
92.7
%
  
94.7
%
  
2.6
   
2.0
 
                                                         
                                                         
1 The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $8.4 million, $12.1 million, $8.9 million, $10.0 million and $8.1 million for the third and fourth quarters of 2005 and the first, second and third quarters of 2006, 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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
  
$
1,138
  
$
4,959
  
$
398
  
$
960
  
$
526
  
$
1,884
  
$
7,982
    
-53.8
%
  
-76.4
%
                                                         
Net Premiums Written
  
$
789
  
$
3,028
  
$
606
  
$
527
  
$
701
  
$
1,834
  
$
7,222
    
-11.2
%
  
-74.6
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
204
  
$
3,386
  
$
606
  
$
332
  
$
746
  
$
1,684
  
$
6,820
    
NM
    
-75.3
%
Net investment income
    
4,217
   
3,652
   
3,201
   
2,408
   
1,695
   
7,304
   
12,686
   
-59.8
%
  
-42.4
%
Total revenues
    
4,421
   
7,038
   
3,807
   
2,740
   
2,441
   
8,988
   
19,506
   
-44.8
%
  
-53.9
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
117
   
981
   
874
   
(1,303
)
  
(1,501
)
  
(1,930
)
  
33,817
   
NM
    
NM
  
Acquisition expenses
    
1,412
   
538
   
(894
)
  
629
   
713
   
448
   
4,045
   
-49.5
%
  
-88.9
%
Operating expenses
    
3,150
   
3,681
   
3,666
   
2,986
   
3,055
   
9,707
   
10,415
   
-3.0
%
  
-6.8
%
Total losses and expenses
    
4,679
   
5,200
   
3,646
   
2,312
   
2,267
   
8,225
   
48,277
   
-51.5
%
  
-83.0
%
                                                         
Pre-tax operating income (loss)
  
$
(258
)
$
1,838
  
$
161
  
$
428
  
$
174
  
$
763
  
$
(28,771
)
  
NM
    
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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
 
$
(195
)
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(539
)
$
(609
)
  
19.0
%
  
11.5
%
                                                         
Net Premiums Written
 
$
(195
)
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(539
)
$
(609
)
  
19.0
%
  
11.5
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
(195
)
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(539
)
$
(609
)
  
19.0
%
  
11.5
%
Net investment income
    
271
   
(219
)
  
(360
)
  
(103
)
  
54
   
(409
)
  
799
   
-80.1
%
  
NM
  
Other revenues
    
37
   
109
   
30
   
121
   
51
   
202
   
297
   
37.8
%
  
-32.0
%
Total revenues
    
113
   
(319
)
  
(498
)
  
(195
)
  
(53
)
  
(746
)
  
487
   
NM
    
NM
  
                                                         
Losses and Expenses:
                                                        
Operating expenses
    
1,622
   
2,627
   
1,996
   
2,401
   
2,178
   
6,575
   
5,875
   
34.3
%
  
11.9
%
Total losses and expenses
    
1,622
   
2,627
   
1,996
   
2,401
   
2,178
   
6,575
   
5,875
   
34.3
%
  
11.9
%
                                                         
Operating loss before income taxes
                                                        
and interest expense
    
(1,509
)
  
(2,946
)
  
(2,494
)
  
(2,596
)
  
(2,231
)
  
(7,321
)
  
(5,388
)
  
-47.8
%
  
-35.9
%
                                                         
Interest expense
    
4,100
   
3,776
   
3,645
   
3,532
   
2,785
   
9,962
   
12,109
   
-32.1
%
  
-17.7
%
                                                         
Pre-tax operating loss
  
$
(5,609
)
$
(6,722
)
$
(6,139
)
$
(6,128
)
$
(5,016
)
$
(17,283
)
$
(17,497
)
  
10.6
%
  
1.2
%
                                                         
 
 
16

PMA Capital Corporation  
Operating Cash Flows - Consolidated  
(In Thousands)  
                                
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 Nine
 
Nine
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
  
Receipts:
                               
Premiums and other revenues collected
  
$
90,858
  
$
98,661
  
$
104,991
  
$
96,652
  
$
108,027
  
$
309,670
  
$
296,239
  
Investment income received
    
15,942
   
16,393
   
15,368
   
14,890
   
11,795
   
42,053
   
45,412
 
Total receipts
    
106,800
   
115,054
   
120,359
   
111,542
   
119,822
   
351,723
   
341,651
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
16,593
   
20,720
   
3,496
   
17,337
   
17,034
   
37,867
   
34,645
 
Losses and LAE paid - prior years
    
86,329
   
174,212
   
92,597
   
92,004
   
65,455
   
250,056
   
332,823
 
Total losses and LAE paid
    
102,922
   
194,932
   
96,093
   
109,341
   
82,489
   
287,923
   
367,468
 
Insurance operating expenses paid
    
39,009
   
27,271
   
46,203
   
39,618
   
26,899
   
112,720
   
117,226
 
Policyholders' dividends paid
    
820
   
531
   
246
   
397
   
451
   
1,094
   
4,219
 
Interest on corporate debt
    
5,327
   
2,197
   
4,791
   
2,965
   
3,470
   
11,226
   
11,701
 
Total disbursements
    
148,078
   
224,931
   
147,333
   
152,321
   
113,309
   
412,963
   
500,614
 
                                             
Net other
    
3,564
   
(15,349
)
  
(12,368
)
  
7,406
   
(9,204
)
  
(14,166
)
  
11,868
 
                                             
Net operating cash flows
  
$
(37,714
)
$
(125,226
)
$
(39,342
)
$
(33,373
)
$
(2,691
)
$
(75,406
)
$
(147,095
)
                                             
 
 
 
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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
  
Receipts:
                               
Premiums and other revenues collected
  
$
91,212
  
$
97,910
  
$
99,740
  
$
94,320
  
$
107,102
  
$
301,162
  
$
284,530
  
Investment income received
    
10,262
   
10,606
   
10,479
   
10,598
   
8,831
   
29,908
   
29,348
 
Total receipts
    
101,474
   
108,516
   
110,219
   
104,918
   
115,933
   
331,070
   
313,878
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
16,584
   
20,720
   
3,496
   
17,337
   
17,034
   
37,867
   
34,627
 
Losses and LAE paid - prior years
    
55,520
   
43,853
   
65,113
   
57,537
   
45,463
   
168,113
   
197,795
 
Total losses and LAE paid
    
72,104
   
64,573
   
68,609
   
74,874
   
62,497
   
205,980
   
232,422
 
Insurance operating expenses paid
    
33,988
   
23,305
   
42,110
   
35,129
   
24,446
   
101,685
   
105,214
 
Policyholders' dividends paid
    
820
   
531
   
246
   
397
   
451
   
1,094
   
4,219
 
Interest on corporate debt
    
-
   
80
   
224
   
227
   
246
   
697
   
-
 
Total disbursements
    
106,912
   
88,489
   
111,189
   
110,627
   
87,640
   
309,456
   
341,855
 
                                             
Net other
    
6,012
   
(18,742
)
  
(6,376
)
  
1,955
   
(1,939
)
  
(6,360
)
  
21,774
 
                                             
Net operating cash flows
  
$
574
  
$
1,285
  
$
(7,346
)
$
(3,754
)
$
26,354
  
$
15,254
  
$
(6,203
)
                                             
                                             
 
 
 
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
 
 
 
2005
 
2005
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
  
Receipts:
                               
Premiums collected
  
$
(354
)
$
751
  
$
5,251
  
$
2,332
  
$
925
  
$
8,508
  
$
11,709
  
Investment income received
    
5,680
   
5,787
   
4,889
   
4,292
   
2,964
   
12,145
   
16,064
 
Total receipts
    
5,326
   
6,538
   
10,140
   
6,624
   
3,889
   
20,653
   
27,773
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
9
   
-
   
-
   
-
   
-
   
-
   
18
 
Losses and LAE paid - prior years
    
30,809
   
130,359
   
27,484
   
34,467
   
19,992
   
81,943
   
135,028
 
Total losses and LAE paid
    
30,818
   
130,359
   
27,484
   
34,467
   
19,992
   
81,943
   
135,046
 
Insurance operating expenses paid
    
5,021
   
3,966
   
4,093
   
4,489
   
2,453
   
11,035
   
12,012
 
Total disbursements
    
35,839
   
134,325
   
31,577
   
38,956
   
22,445
   
92,978
   
147,058
 
                                             
Net other
    
(1,912
)
  
4,004
   
1,083
   
1,775
   
(5,500
)
  
(2,642
)
  
(6,876
)
                                             
Net operating cash flows
  
$
(32,425
)
$
(123,783
)
$
(20,354
)
$
(30,557
)
$
(24,056
)
$
(74,967
)
$
(126,161
)
                                             
 
 
19
 
PMA Capital Corporation
Statutory Surplus
(In Thousands)
                       
   
3rd
 
4th
 
1st
 
2nd
 
3rd
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 
 
2005
 
2005
 
2006
 
2006
 
20061
  
                       
                       
PMA Pool 2
  
$
311,802
  
$
315,056
  
$
316,726
  
$
321,114
  
$
325,242
 4 
PMA Capital Insurance Company 3
    
210,663
   
204,920
   
203,261
   
125,989
5   
123,428
4,5 
                                 
 

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
 
 
 
 
 
2005
 
2005
 
2006
 
2006
 
20061
 
20061
 
2005
  
                                   
Net Premiums Written:
                                  
   Workers' Compensation & Integrated
      Disability
        
$
101,435
  
$
63,086
  
$
100,096
  
$
76,602
  
$
95,437
  
$
272,135
  
$
267,116
  
Other Commercial Lines
          
13,487
   
4,723
   
11,048
   
6,687
   
6,067
   
23,802
   
35,272
 
Total - PMA Pool
        
$
114,922
  
$
67,809
  
$
111,144
  
$
83,289
  
$
101,504
  
$
295,937
  
$
302,388
  
                                                   
Statutory Ratios:
                                                  
Loss and LAE ratio
          
73.3
%
  
73.0
%
  
71.5
%
  
72.5
%
  
72.1
%
  
72.0
%
  
73.2
%
Underwriting expense ratio
          
25.1
%
  
32.5
%
  
24.6
%
  
31.6
%
  
26.3
%
  
27.2
%
  
26.5
%
Policyholders' dividend ratio
          
0.8
%
  
1.1
%
  
0.9
%
  
0.1
%
  
0.5
%
  
0.5
%
  
0.9
%
Combined ratio
          
99.2
%
  
106.6
%
  
97.0
%
  
104.2
%
  
98.9
%
  
99.7
%
  
100.6
%
Operating ratio
          
91.2
%
  
98.6
%
  
88.4
%
  
96.0
%
  
90.5
%
  
91.3
%
  
92.3
%
                                                   
                                                   

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 $146.0 million and $3.4 million for the PMA Pool and PMA Capital Insurance Company, respectively.
5
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:
    
610.397.5298
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 11/01/2006):
          
           
   
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