EX-99.2 3 supplement.htm EXHIBIT 99.2 Exhibit 99.2

PMA Capital Corporation
Statistical Supplement
Fourth Quarter - 2006
                   
Table of Contents
             
 Page
Consolidated Highlights:
  
Selected Financial Data - Fourth Quarter
1
Selected Financial Data - Full Year
2
Consolidated Statements of Operations - Per Share Data
3
Consolidated Statements of Operations - Fourth Quarter
5
Consolidated Statements of Operations - Full Year
6
Consolidated Balance Sheets
7
Invested Assets and Net Investment Income; Debt; Balance Sheet Impact of Commutations - Run-off Operations
8
                   
Segment Information:
    
Statements of Operations - Consolidating - Full Year
9
-
10
Statements of Operations - Consolidating - Fourth 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)  
                            
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 % Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 4th
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 Quarter
  
                            
Gross Premiums Written by Segment:
                           
PMA Insurance Group
  
$
82,490
  
$
133,737
  
$
99,328
  
$
133,903
  
$
89,484
    
8.5
%
Run-off Operations
   
4,959
   
398
   
960
   
526
   
102
   
-97.9
%
Corporate & Other
    
(209
)
  
(168
)
  
(213
)
  
(158
)
  
(157
)
  
24.9
%
Gross premiums written
  
$
87,240
  
$
133,967
  
$
100,075
  
$
134,271
  
$
89,429
    
2.5
%
                                       
Net Premiums Written by Segment:
                                      
PMA Insurance Group
  
$
71,339
  
$
113,390
  
$
85,639
  
$
107,795
  
$
66,873
    
-6.3
%
Run-off Operations
   
3,028
   
606
   
527
   
701
   
309
   
-89.8
%
Corporate & Other
    
(209
)
  
(168
)
  
(213
)
  
(158
)
  
(157
)
  
24.9
%
Net premiums written
  
$
74,158
  
$
113,828
  
$
85,953
  
$
108,338
  
$
67,025
    
-9.6
%
                                       
Major Components of Net Income (Loss):
                                     
Pre-tax operating income (loss) by segment:
                                      
PMA Insurance Group
  
$
3,867
  
$
8,141
  
$
6,671
  
$
8,351
  
$
5,721
    
47.9
%
Run-off Operations 
    
1,838
   
161
   
428
   
174
   
485
   
-73.6
%
Corporate & Other
    
(6,722
)
  
(6,139
)
  
(6,128
)
  
(5,016
)
  
(5,282
)
  
21.4
%
Pre-tax operating income (loss)
    
(1,017
)
  
2,163
   
971
   
3,509
   
924
   
NM
  
Net realized investment gains (losses)
    
(1,084
)
  
1,818
   
(1,978
)
  
(799
)
  
(26
)
  
97.6
%
Pre-tax income (loss)
    
(2,101
)
  
3,981
   
(1,007
)
  
2,710
   
898
   
NM
  
Income tax expense (benefit)
    
(875
)
  
1,500
   
(245
)
  
1,209
   
67
   
NM
  
Net income (loss)
  
$
(1,226
)
$
2,481
  
$
(762
)
$
1,501
  
$
831
    
NM
  
After-tax operating income (loss)
  
$
(521
)
$
1,299
  
$
524
  
$
2,020
  
$
848
    
NM
  
                                       
Diluted Earnings (Loss) Per Share:
                                      
Net income (loss)
  
$
(0.04
)
$
0.08
  
$
(0.02
)
$
0.05
  
$
0.03
    
NM
  
Less the impact of:
                                      
Realized gains (losses) after tax
    
(0.02
)
  
0.04
   
(0.04
)
  
(0.01
)
  
-
   
NM
  
After-tax operating income (loss)
  
$
(0.02
)
$
0.04
  
$
0.02
  
$
0.06
  
$
0.03
    
NM
  
                                       
Capitalization:
                                      
Debt
  
$
196,181
  
$
189,181
  
$
148,303
  
$
131,561
  
$
131,211
    
-33.1
%
Shareholders' equity excluding FAS 115
    unrealized loss
    
409,019
   
413,516
   
417,064
   
418,372
   
425,132
   
3.9
%
Total capitalization excluding FAS 115
    unrealized loss
    
605,200
   
602,697
   
565,367
   
549,933
   
556,343
   
-8.1
%
FAS 115 unrealized loss
    
(2,796
)
  
(13,941
)
  
(18,733
)
  
(6,169
)
  
(6,039
)
  
NM
  
Total capitalization including FAS 115
   unrealized loss
  
$
602,404
  
$
588,756
  
$
546,634
  
$
543,764
  
$
550,304
    
-8.6
%
                                       
Book Value Per Share:
                                      
Excluding FAS 115 unrealized loss
  
$
12.79
  
$
12.83
  
$
12.79
  
$
12.82
  
$
13.02
    
1.8
%
Including FAS 115 unrealized loss
  
$
12.70
  
$
12.39
  
$
12.21
  
$
12.63
  
$
12.83
    
1.0
%
                                       
Debt to Total Capital:
                                      
Excluding FAS 115 unrealized loss
    
32.4
%
  
31.4
%
  
26.2
%
  
23.9
%
  
23.6
%
  
-27.2
%
Including FAS 115 unrealized loss
    
32.6
%
  
32.1
%
  
27.1
%
  
24.2
%
  
23.8
%
  
-27.0
%
                                       
Interest Coverage:
                                      
Income before interest and income taxes
                                      
to interest expense
    
0.47
   
2.03
   
0.73
   
1.89
   
1.32
   
NM
  
                                       
Operating income before interest and income taxes
                                      
to interest expense
    
0.75
   
1.56
   
1.26
   
2.15
   
1.33
   
77.3
%
                                       
                                       
 
 
 
1
 
 

PMA Capital Corporation  
  
Selected Financial Data  
(Dollar Amounts in Thousands, Except Per Share Data)  
                
   
Twelve
 
Twelve
 
 % Change
 
   
Months
 
Months
 
 Twelve
 
   
2006
  
2005
  
 Months
  
                
Gross Premiums Written by Segment:
               
PMA Insurance Group
  
$
456,452
  
$
421,605
    
8.3
%
Run-off Operations
   
1,986
   
12,941
   
-84.7
%
Corporate & Other
    
(696
)
  
(818
)
  
14.9
%
Gross premiums written
  
$
457,742
  
$
433,728
    
5.5
%
                     
Net Premiums Written by Segment:
                    
PMA Insurance Group
  
$
373,697
  
$
375,793
    
-0.6
%
Run-off Operations
   
2,143
   
10,250
   
-79.1
%
Corporate & Other
    
(696
)
  
(818
)
  
14.9
%
Net premiums written
  
$
375,144
  
$
385,225
    
-2.6
%
                     
Major Components of Net Income (Loss):
                    
Pre-tax operating income (loss) by segment:
                    
PMA Insurance Group
  
$
28,884
  
$
22,020
    
31.2
%
Run-off Operations
   
1,248
   
(26,933
)
  
NM
  
Corporate & Other
    
(22,565
)
  
(24,219
)
  
6.8
%
Pre-tax operating income (loss)
    
7,567
   
(29,132
)
  
NM
  
Net realized investment gains (losses)
    
(985
)
  
2,117
   
NM
  
Pre-tax income (loss)
    
6,582
   
(27,015
)
  
NM
  
Income tax expense (benefit)
    
2,531
   
(5,995
)
  
NM
  
Net income (loss)
  
$
4,051
  
$
(21,020
)
  
NM
  
After-tax operating income (loss)
  
$
4,691
  
$
(22,396
)
  
NM
  
                     
Diluted Earnings (Loss) Per Share:
                    
Net income (loss)
  
$
0.12
  
$
(0.66
)
  
NM
  
Less the impact of:
                    
Realized gains (losses) after tax
   
(0.02
)
  
0.05
   
NM
  
After-tax operating income (loss)
  
$
0.14
  
$
(0.71
)
  
NM
  
                     
                     
 
 
 
2
 
 

PMA Capital Corporation  
Consolidated Statements of Operations - Per Share Data  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
  
                                
Diluted Earnings (Loss) Per Share:
                               
                                
Net income (loss)
  
$
(0.04
)
$
0.08
  
$
(0.02
)
$
0.05
  
$
0.03
  
$
0.12
  
$
(0.66
)
                                             
Pre-tax operating income (loss)
  
$
(0.03
)
$
0.07
  
$
0.03
  
$
0.11
  
$
0.03
  
$
0.23
  
$
(0.92
)
                                             
After-tax operating income (loss)
  
$
(0.02
)
$
0.04
  
$
0.02
  
$
0.06
  
$
0.03
  
$
0.14
  
$
(0.71
)
                                             
Diluted weighted average common
                                            
   shares outstanding
    
31,833,384
   
32,405,934
   
32,132,618
   
32,922,643
   
32,916,423
   
32,731,360
   
31,682,648
 
       
                                             
Dividends declared:
                                            
Class A Common stock
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
                                             
Actual common shares issued
                                            
and outstanding
    
31,983,283
   
32,239,288
   
32,613,234
   
32,646,689
   
32,659,194
   
32,659,194
   
31,983,283
 
     
                                             
Class A Common Stock prices:
                                            
High
  
$
9.73
  
$
10.43
  
$
10.49
  
$
10.75
  
$
10.15
  
$
10.75
  
$
10.65
  
Low
  
$
7.99
  
$
8.68
  
$
9.24
  
$
8.60
  
$
8.60
  
$
8.60
  
$
5.91
  
Close
  
$
9.13
  
$
10.18
  
$
10.30
  
$
8.82
  
$
9.22
  
$
9.22
  
$
9.13
  
                                             
 
 
 
 
3
 
 
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4
PMA Capital Corporation  
Consolidated Statements of Operations  
(In Thousands)  
                            
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 % Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 4th
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 Quarter
  
                            
Gross Premiums Written
  
$
87,240
  
$
133,967
  
$
100,075
  
$
134,271
  
$
89,429
    
2.5
%
                                       
Net Premiums Written
  
$
74,158
  
$
113,828
  
$
85,953
  
$
108,338
  
$
67,025
    
-9.6
%
                                       
Revenues:
                                      
Net premiums earned
  
$
99,364
  
$
91,659
  
$
94,922
  
$
95,284
  
$
88,316
    
-11.1
%
Net investment income
    
11,761
   
11,400
   
11,058
   
10,747
   
10,333
   
-12.1
%
Net realized investment gains (losses)
    
(1,084
)
  
1,818
   
(1,978
)
  
(799
)
  
(26
)
  
97.6
%
Other revenues
    
6,946
   
7,104
   
7,286
   
6,624
   
7,107
   
2.3
%
Total revenues
    
116,987
   
111,981
   
111,288
   
111,856
   
105,730
   
-9.6
%
                                       
Expenses:
                                      
Losses and loss adjustment expenses
    
69,713
   
65,393
   
66,379
   
66,754
   
60,695
   
-12.9
%
Acquisition expenses
    
19,536
   
17,325
   
19,552
   
19,811
   
17,825
   
-8.8
%
Operating expenses
    
23,499
   
19,987
   
21,580
   
18,953
   
22,966
   
-2.3
%
Dividends to policyholders
    
2,343
   
1,422
   
1,011
   
589
   
510
   
-78.2
%
Interest expense
    
3,997
   
3,873
   
3,773
   
3,039
   
2,836
   
-29.0
%
Total losses and expenses
    
119,088
   
108,000
   
112,295
   
109,146
   
104,832
   
-12.0
%
                                       
Pre-tax income (loss)
    
(2,101
)
  
3,981
   
(1,007
)
  
2,710
   
898
   
NM
  
                                       
Income tax expense (benefit):
                                      
Current
    
-
   
-
   
-
   
-
   
-
   
NM
  
Deferred
    
(875
)
  
1,500
   
(245
)
  
1,209
   
67
   
NM
  
                                       
Total income tax expense (benefit)
    
(875
)
  
1,500
   
(245
)
  
1,209
   
67
   
NM
  
                                       
Net income (loss)
  
$
(1,226
)
$
2,481
  
$
(762
)
$
1,501
  
$
831
    
NM
  
                                       
Pre-tax operating income (loss)
  
$
(1,017
)
$
2,163
  
$
971
  
$
3,509
  
$
924
    
NM
  
                                       
After-tax operating income (loss)
  
$
(521
)
$
1,299
  
$
524
  
$
2,020
  
$
848
    
NM
  
                                       
                                       
 
 
 
5
 

 
PMA Capital Corporation  
Consolidated Statements of Operations  
(In Thousands)  
                
   
Twelve
  
Twelve
  
 % Change
  
   
Months
  
Months
  
 Twelve
 
   
2006
  
2005
  
 Months
  
                
Gross Premiums Written
  
$
457,742
  
$
433,728
    
5.5
%
                     
Net Premiums Written
  
$
375,144
  
$
385,225
    
-2.6
%
                     
Revenues:
                    
Net premiums earned
  
$
370,181
  
$
368,030
    
0.6
%
Net investment income
    
43,538
   
48,663
   
-10.5
%
Net realized investment gains (losses)
    
(985
)
  
2,117
   
NM
  
Other revenues
    
28,121
   
24,286
   
15.8
%
Total revenues
    
440,855
   
443,096
   
-0.5
%
                     
Expenses:
                    
Losses and loss adjustment expenses
    
259,221
   
295,074
   
-12.2
%
Acquisition expenses
    
74,513
   
75,881
   
-1.8
%
Operating expenses
    
83,486
   
77,871
   
7.2
%
Dividends to policyholders
    
3,532
   
5,174
   
-31.7
%
Interest expense
    
13,521
   
16,111
   
-16.1
%
Total losses and expenses
    
434,273
   
470,111
   
-7.6
%
                     
Pre-tax income (loss)
    
6,582
   
(27,015
)
  
NM
  
                     
Income tax expense (benefit):
                    
Current
    
-
   
-
   
NM
  
Deferred
    
2,531
   
(5,995
)
  
NM
  
                     
Total income tax expense (benefit)
    
2,531
   
(5,995
)
  
NM
  
                     
Net income (loss)
  
$
4,051
  
$
(21,020
)
  
NM
  
                     
Pre-tax operating income (loss)
  
$
7,567
  
$
(29,132
)
  
NM
  
                     
After-tax operating income (loss)
  
$
4,691
  
$
(22,396
)
  
NM
  
                     
 
 
 
6
 
 

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
 
                       
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
   
2005
  
2006
  
2006
  
2006
  
2006
  
                       
Assets:
                      
Investments in fixed maturities available for sale
  
$
1,049,254
  
$
994,972
  
$
913,376
  
$
904,074
  
$
871,951
  
Short-term investments
    
57,997
   
63,641
   
70,994
   
59,227
   
86,448
 
Short-term investments, loaned securities collateral
    
-
   
9,991
   
4,771
   
-
   
-
 
Total investments
    
1,107,251
   
1,068,604
   
989,141
   
963,301
   
958,399
 
                                 
Cash
    
30,239
   
13,667
   
26,004
   
30,387
   
14,105
 
Accrued investment income
    
11,528
   
11,395
   
9,312
   
10,993
   
9,351
 
Premiums receivable
    
197,582
   
209,354
   
205,825
   
218,126
   
207,771
 
Reinsurance receivables
    
1,094,674
   
1,086,830
   
1,071,332
   
1,069,153
   
1,039,979
 
Deferred income taxes, net
    
103,656
   
107,908
   
110,452
   
102,986
   
100,019
 
Deferred acquisition costs
    
34,236
   
39,308
   
37,336
   
40,384
   
36,239
 
Funds held by reinsureds
    
146,374
   
148,512
   
151,873
   
133,222
   
130,214
 
Other assets
    
162,505
   
179,061
   
171,713
   
184,904
   
170,330
 
Total assets
  
$
2,888,045
  
$
2,864,639
  
$
2,772,988
  
$
2,753,456
  
$
2,666,407
  
                                 
Liabilities:
                                
Unpaid losses and loss adjustment expenses
  
$
1,820,043
  
$
1,776,822
  
$
1,727,369
  
$
1,690,483
  
$
1,634,865
  
Unearned premiums
    
173,432
   
199,129
   
189,140
   
217,506
   
202,973
 
Debt
    
196,181
   
189,181
   
148,303
   
131,561
   
131,211
 
Accounts payable, accrued expenses
                                
and other liabilities
    
209,654
   
205,114
   
220,350
   
219,146
   
210,740
 
Funds held under reinsurance treaties
    
78,058
   
79,815
   
79,966
   
77,813
   
63,075
 
Dividends to policyholders
    
4,452
   
4,998
   
4,725
   
4,744
   
4,450
 
Payable under securities loan agreements
    
2
   
10,005
   
4,804
   
-
   
-
 
Total liabilities
    
2,481,822
   
2,465,064
   
2,374,657
   
2,341,253
   
2,247,314
 
                                 
Shareholders' Equity:
                                
Class A Common Stock
    
171,090
   
171,090
   
171,090
   
171,090
   
171,090
 
Additional paid-in capital
    
109,331
   
110,042
   
110,552
   
111,116
   
109,922
 
Retained earnings
    
187,538
   
185,393
   
180,626
   
181,719
   
184,216
 
Accumulated other comprehensive loss
    
(22,684
)
  
(33,358
)
  
(37,630
)
  
(26,010
)
  
(20,624
)
Treasury stock, at cost
    
(38,779
)
  
(33,592
)
  
(26,307
)
  
(25,712
)
  
(25,511
)
Unearned restricted stock compensation
    
(273
)
  
-
   
-
   
-
   
-
 
Total shareholders' equity
    
406,223
   
399,575
   
398,331
   
412,203
   
419,093
 
Total liabilities and shareholders' equity
  
$
2,888,045
  
$
2,864,639
  
$
2,772,988
  
$
2,753,456
  
$
2,666,407
  
                                 
                                 
 
 
 
7
 
 

PMA Capital Corporation  
Invested Assets and Net Investment Income  
(Dollars in Thousands)  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
   
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
   
2005
  
2006
  
2006
  
2006
  
2006
  
 2006
  
2005
  
                                
Total Investments & Cash
                               
As reported
  
$
1,137,490
  
$
1,082,271
  
$
1,015,145
  
$
993,688
  
$
972,504
  
$
972,504
  
$
1,137,490
  
Less:
                                            
Securities lending activity
    
2
   
10,005
   
4,804
   
-
   
-
   
-
   
2
 
Unrealized loss
    
(4,302
)
  
(21,448
)
  
(28,820
)
  
(9,490
)
  
(9,291
)
  
(9,291
)
  
(4,302
)
Total adjusted investments & cash
  
$
1,141,790
  
$
1,093,714
  
$
1,039,161
  
$
1,003,178
  
$
981,795
  
$
981,795
  
$
1,141,790
  
                                             
Net Investment Income
                                            
As reported
  
$
11,761
  
$
11,400
  
$
11,058
  
$
10,747
  
$
10,333
  
$
43,538
  
$
48,663
  
Funds held:
                                            
Assumed
   
545
   
335
   
537
   
185
   
160
   
1,217
   
1,396
 
Ceded
   
(1,897
)
  
(1,519
)
  
(1,643
)
  
(1,482
)
  
(1,374
)
  
(6,018
)
  
(7,899
)
Total funds held
    
(1,352
)
  
(1,184
)
  
(1,106
)
  
(1,297
)
  
(1,214
)
  
(4,801
)
  
(6,503
)
                                             
Total adjusted investment income
  
$
13,113
  
$
12,584
  
$
12,164
  
$
12,044
  
$
11,547
  
$
48,339
  
$
55,166
  
                                             
Yield
                                            
As reported
    
3.77
%
  
4.11
%
  
4.22
%
  
4.28
%
  
4.20
%
  
4.19
%
  
3.53
%
Investment portfolio
    
4.31
%
  
4.50
%
  
4.56
%
  
4.72
%
  
4.65
%
  
4.60
%
  
4.19
%
                                             
Duration (in years)
    
3.7
   
3.7
   
3.5
   
3.4
   
3.3
   
3.3
   
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
    
3,115
       
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
    
(401
)
      
Total long-term debt
  
$
131,211
        
               
 
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 9.49% as of December 31, 2006.
4
Interest rate on surplus notes is 9.87% as of December 31, 2006.
 
 

PMA Capital Corporation
Balance Sheet Impact of Commutations - Run-off Operations
(Dollars in Thousands)
 
 
     4th Quarter 2006   
               
Assets
  
Assumed
 
Ceded
 
Total
  
Funds held by reinsureds
  
$
(4,683
)
$
-
  
$
(4,683
)
                     
Liabilities
    
Assumed
 
 
Ceded
 
 
Total
  
Unpaid loss and loss adjustment expenses
  
$
(5,442
)
$
-
  
$
(5,442
)
Other liabilities
    
(3,185
)
  
-
   
(3,185
)
                     
     
 Twelve Months 2006 
                     
Assets
    
Assumed
 
 
Ceded
 
 
Total
  
Funds held by reinsureds
  
$
(24,931
)
$
-
  
$
(24,931
)
                     
Liabilities
    
Assumed
 
 
Ceded
 
 
Total
  
Unpaid losses and loss adjustment expenses
  
$
(28,455
)
$
-
  
$
(28,455
)
Other liabilities
    
(3,185
)
  
-
   
(3,185
)
                     
 
 
 
8
 

PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2006
(In Thousands)
                       
       
PMA
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
Corporate
 
Run-off
 
 
 
 
 
 
 
Group
 
& Other1
 
Operations
 
Consolidated
 
                       
Gross Premiums Written
        
$
456,452
  
$
(696
)
$
1,986
  
$
457,742
  
                                 
Net Premiums Written
        
$
373,697
  
$
(696
)
$
2,143
  
$
375,144
  
                                 
Revenues:
                                
Net premiums earned
        
$
368,099
  
$
(696
)
$
2,778
  
$
370,181
  
Net investment income
          
35,500
   
(658
)
  
8,696
   
43,538
 
Other revenues
          
27,877
   
244
   
-
   
28,121
 
Operating revenues
          
431,476
   
(1,110
)
  
11,474
   
441,840
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
262,297
   
-
   
(3,076
)
  
259,221
 
Acquisition expenses
          
73,726
   
-
   
787
   
74,513
 
Operating expenses
          
62,059
   
8,912
   
12,515
   
83,486
 
Dividends to policyholders
          
3,532
   
-
   
-
   
3,532
 
Total losses and expenses
          
401,614
   
8,912
   
10,226
   
420,752
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
29,862
   
(10,022
)
  
1,248
   
21,088
 
                                 
Interest expense
          
978
   
12,543
   
-
   
13,521
 
                                 
Pre-tax operating income (loss)
        
$
28,884
  
$
(22,565
)
$
1,248
    
7,567
 
                                 
Net realized investment losses
                            
(985
)
                                 
Pre-tax income
                          
$
6,582
  
                                 
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
 
 
 
9
 
 

PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2005
(In Thousands)
                       
       
PMA
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
Corporate
 
Run-off
 
 
 
 
 
 
 
Group
 
& Other1
 
Operations
 
Consolidated
 
                       
Gross Premiums Written
        
$
421,605
  
$
(818
)
$
12,941
  
$
433,728
  
                                 
Net Premiums Written
        
$
375,793
  
$
(818
)
$
10,250
  
$
385,225
  
                                 
Revenues:
                                
Net premiums earned
        
$
358,642
  
$
(818
)
$
10,206
  
$
368,030
  
Net investment income
          
31,745
   
580
   
16,338
   
48,663
 
Other revenues
          
23,880
   
406
   
-
   
24,286
 
Operating revenues
          
414,267
   
168
   
26,544
   
440,979
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
260,276
   
-
   
34,798
   
295,074
 
Acquisition expenses
          
71,298
   
-
   
4,583
   
75,881
 
Operating expenses
          
55,273
   
8,502
   
14,096
   
77,871
 
Dividends to policyholders
          
5,174
   
-
   
-
   
5,174
 
Total losses and expenses
          
392,021
   
8,502
   
53,477
   
454,000
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
22,246
   
(8,334
)
  
(26,933
)
  
(13,021
)
                                 
Interest expense
          
226
   
15,885
   
-
   
16,111
 
                                 
Pre-tax operating income (loss)
        
$
22,020
  
$
(24,219
)
$
(26,933
)
  
(29,132
)
                                 
Net realized investment gains
                            
2,117
 
                                 
Pre-tax loss
                          
$
(27,015
)
                                 
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
 
 
 
10
 
 

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2006
(In Thousands)
                       
       
PMA
             
       
Insurance
 
Corporate
 
Run-off
 
 
 
 
 
 
 
Group
 
& Other1
 
Operations
 
Consolidated
  
                       
Gross Premiums Written
        
$
89,484
  
$
(157
)
$
102
  
$
89,429
  
                                 
Net Premiums Written
        
$
66,873
  
$
(157
)
$
309
  
$
67,025
  
                                 
Revenues:
                                
Net premiums earned
        
$
87,379
  
$
(157
)
$
1,094
  
$
88,316
  
Net investment income
          
9,190
   
(249
)
  
1,392
   
10,333
 
Other revenues
          
7,065
   
42
   
-
   
7,107
 
Operating revenues
          
103,634
   
(364
)
  
2,486
   
105,756
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
61,841
   
-
   
(1,146
)
  
60,695
 
Acquisition expenses
          
17,486
   
-
   
339
   
17,825
 
Operating expenses
          
17,821
   
2,337
   
2,808
   
22,966
 
Dividends to policyholders
          
510
   
-
   
-
   
510
 
Total losses and expenses
          
97,658
   
2,337
   
2,001
   
101,996
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
5,976
   
(2,701
)
  
485
   
3,760
 
                                 
Interest expense
          
255
   
2,581
   
-
   
2,836
 
                                 
Pre-tax operating income (loss)
        
$
5,721
  
$
(5,282
)
$
485
    
924
 
                                 
Net realized investment losses
                            
(26
)
                                 
Pre-tax income
                          
$
898
  
                                 
                                 
1Corporate & Other includes the effect of eliminating transactions between the Insurance Operations.
                                 
 
 
 
11
 

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2005
(In Thousands)
 
                      
                       
       
PMA
 
 
 
 
 
 
 
 
 
 
 
Insurance
 
Corporate
 
Run-off
 
 
 
 
 
 
 
Group
 
& Other1
 
Operations
 
Consolidated
  
                       
Gross Premiums Written
        
$
82,490
  
$
(209
)
$
4,959
  
$
87,240
  
                                 
Net Premiums Written
        
$
71,339
  
$
(209
)
$
3,028
  
$
74,158
  
                                 
Revenues:
                                
Net premiums earned
        
$
96,187
  
$
(209
)
$
3,386
  
$
99,364
  
Net investment income
          
8,328
   
(219
)
  
3,652
   
11,761
 
Other revenues
          
6,837
   
109
   
-
   
6,946
 
Operating revenues
          
111,352
   
(319
)
  
7,038
   
118,071
 
                                 
Losses and Expenses:
                                
Losses and loss adjustment expenses
          
68,732
   
-
   
981
   
69,713
 
Acquisition expenses
          
18,998
   
-
   
538
   
19,536
 
Operating expenses
          
17,191
   
2,627
   
3,681
   
23,499
 
Dividends to policyholders
          
2,343
   
-
   
-
   
2,343
 
Total losses and expenses
          
107,264
   
2,627
   
5,200
   
115,091
 
                                 
Operating income (loss) before income taxes
                                
and interest expense
          
4,088
   
(2,946
)
  
1,838
   
2,980
 
                                 
Interest expense
          
221
   
3,776
   
-
   
3,997
 
                                 
Pre-tax operating income (loss)
        
$
3,867
  
$
(6,722
)
$
1,838
    
(1,017
)
                                 
Net realized investment losses
                            
(1,084
)
                                 
Pre-tax loss
                          
$
(2,101
)
                                 
                                 
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)

 
                                        
                                         
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 4th
 
Twelve
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
  
$
82,490
  
$
133,737
  
$
99,328
  
$
133,903
  
$
89,484
  
$
456,452
  
$
421,605
    
8.5
%
  
8.3
%
                                                         
Net Premiums Written
  
$
71,339
  
$
113,390
  
$
85,639
  
$
107,795
  
$
66,873
  
$
373,697
  
$
375,793
    
-6.3
%
  
-0.6
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
96,187
  
$
91,221
  
$
94,803
  
$
94,696
  
$
87,379
  
$
368,099
  
$
358,642
    
-9.2
%
  
2.6
%
Net investment income
    
8,328
   
8,559
   
8,753
   
8,998
   
9,190
   
35,500
   
31,745
   
10.4
%
  
11.8
%
Other revenues
    
6,837
   
7,074
   
7,165
   
6,573
   
7,065
   
27,877
   
23,880
   
3.3
%
  
16.7
%
Total revenues
    
111,352
   
106,854
   
110,721
   
110,267
   
103,634
   
431,476
   
414,267
   
-6.9
%
  
4.2
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
68,732
   
64,519
   
67,682
   
68,255
   
61,841
   
262,297
   
260,276
   
-10.0
%
  
0.8
%
Acquisition expenses
    
18,998
   
18,219
   
18,923
   
19,098
   
17,486
   
73,726
   
71,298
   
-8.0
%
  
3.4
%
Operating expenses
    
17,191
   
14,325
   
16,193
   
13,720
   
17,821
   
62,059
   
55,273
   
3.7
%
  
12.3
%
Dividends to policyholders
    
2,343
   
1,422
   
1,011
   
589
   
510
   
3,532
   
5,174
   
-78.2
%
  
-31.7
%
Total losses and expenses
    
107,264
   
98,485
   
103,809
   
101,662
   
97,658
   
401,614
   
392,021
   
-9.0
%
  
2.4
%
                                                         
Operating income before income taxes
                                                        
and interest expense
    
4,088
   
8,369
   
6,912
   
8,605
   
5,976
   
29,862
   
22,246
   
46.2
%
  
34.2
%
                                                         
Interest expense
    
221
   
228
   
241
   
254
   
255
   
978
   
226
   
15.4
%
  
NM
  
                                                         
Pre-tax operating income
 
$
3,867
  
$
8,141
  
$
6,671
  
$
8,351
  
$
5,721
  
$
28,884
  
$
22,020
    
47.9
%
  
31.2
%
                                                         
                                                         
 
 
 
13

PMA Capital Corporation    
Insurance Ratios - PMA Insurance Group    
                                         
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 Point Chg.
 
Point Chg.
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 4th Quarter
 
Twelve Months
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Better (Worse)
 
Better (Worse)
  
                                         
Ratios - GAAP Basis:
                                        
                                         
Loss and LAE ratio
    
71.5
%
  
70.7
%
  
71.4
%
  
72.1
%
  
70.8
%
  
71.3
%
  
72.6
%
  
0.7
   
1.3
 
                                                         
Expense ratio:
                                                        
Acquisition expenses
    
19.8
%
  
20.0
%
  
20.0
%
  
20.2
%
  
20.0
%
  
20.0
%
  
19.9
%
  
(0.2
)
  
(0.1
)
Operating expenses 1
    
12.5
%
  
9.8
%
  
10.4
%
  
8.5
%
  
10.7
%
  
9.8
%
  
10.4
%
  
1.8
   
0.6
 
Total expense ratio
    
32.3
%
  
29.8
%
  
30.4
%
  
28.7
%
  
30.7
%
  
29.8
%
  
30.3
%
  
1.6
   
0.5
 
                                                         
Policyholders' dividend ratio
    
2.4
%
  
1.6
%
  
1.1
%
  
0.6
%
  
0.6
%
  
1.0
%
  
1.4
%
  
1.8
   
0.4
 
Combined ratio
    
106.2
%
  
102.1
%
  
102.9
%
  
101.4
%
  
102.1
%
  
102.1
%
  
104.3
%
  
4.1
   
2.2
 
                                                         
Net investment income ratio
    
-8.7
%
  
-9.4
%
  
-9.2
%
  
-9.5
%
  
-10.5
%
  
-9.6
%
  
-8.9
%
  
1.8
   
0.7
 
Operating ratio
    
97.5
%
  
92.7
%
  
93.7
%
  
91.9
%
  
91.6
%
  
92.5
%
  
95.4
%
  
5.9
   
2.9
 
                                                         
 
1 The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $12.1 million, $8.9 million, $10.0 million, $8.1 million and $9.4 million for the fourth quarter of 2005 and the first, second, third and fourth quarters of 2006, respectively.
 
 
14
 

PMA Capital Corporation    
Statements of Operations - Run-off Operations    
(Dollar Amounts in Thousands)    
                                         
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 4th
 
Twelve
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
  
$
4,959
  
$
398
  
$
960
  
$
526
  
$
102
  
$
1,986
  
$
12,941
    
-97.9
%
  
-84.7
%
                                                         
Net Premiums Written
  
$
3,028
  
$
606
  
$
527
  
$
701
  
$
309
  
$
2,143
  
$
10,250
    
-89.8
%
  
-79.1
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
3,386
  
$
606
  
$
332
  
$
746
  
$
1,094
  
$
2,778
  
$
10,206
    
-67.7
%
  
-72.8
%
Net investment income
    
3,652
   
3,201
   
2,408
   
1,695
   
1,392
   
8,696
   
16,338
   
-61.9
%
  
-46.8
%
Total revenues
    
7,038
   
3,807
   
2,740
   
2,441
   
2,486
   
11,474
   
26,544
   
-64.7
%
  
-56.8
%
                                                         
Losses and Expenses:
                                                        
Losses and loss adjustment expenses
    
981
   
874
   
(1,303
)
  
(1,501
)
  
(1,146
)
  
(3,076
)
  
34,798
   
NM
    
NM
  
Acquisition expenses
    
538
   
(894
)
  
629
   
713
   
339
   
787
   
4,583
   
-37.0
%
  
-82.8
%
Operating expenses
    
3,681
   
3,666
   
2,986
   
3,055
   
2,808
   
12,515
   
14,096
   
-23.7
%
  
-11.2
%
Total losses and expenses
    
5,200
   
3,646
   
2,312
   
2,267
   
2,001
   
10,226
   
53,477
   
-61.5
%
  
-80.9
%
                                                         
Pre-tax operating income (loss)
  
$
1,838
  
$
161
  
$
428
  
$
174
  
$
485
  
$
1,248
  
$
(26,933
)
  
-73.6
%
  
NM
  
                                                         
 
 
 
15
 

PMA Capital Corporation    
Statements of Operations - Corporate & Other    
(Dollar Amounts in Thousands)    
                                         
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 % Change
 
% Change
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 4th
 
Twelve
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
 
 Quarter
 
Months
  
                                         
Gross Premiums Written
 
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(157
)
$
(696
)
$
(818
)
  
24.9
%
  
14.9
%
                                                         
Net Premiums Written
 
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(157
)
$
(696
)
$
(818
)
  
24.9
%
  
14.9
%
                                                         
Revenues:
                                                        
Net premiums earned
  
$
(209
)
$
(168
)
$
(213
)
$
(158
)
$
(157
)
$
(696
)
$
(818
)
  
24.9
%
  
14.9
%
Net investment income
    
(219
)
  
(360
)
  
(103
)
  
54
   
(249
)
  
(658
)
  
580
   
-13.7
%
  
NM
  
Other revenues
    
109
   
30
   
121
   
51
   
42
   
244
   
406
   
-61.5
%
  
-39.9
%
Total revenues
    
(319
)
  
(498
)
  
(195
)
  
(53
)
  
(364
)
  
(1,110
)
  
168
   
-14.1
%
  
NM
  
                                                         
Losses and Expenses:
                                                        
Operating expenses
    
2,627
   
1,996
   
2,401
   
2,178
   
2,337
   
8,912
   
8,502
   
-11.0
%
  
4.8
%
Total losses and expenses
    
2,627
   
1,996
   
2,401
   
2,178
   
2,337
   
8,912
   
8,502
   
-11.0
%
  
4.8
%
                                                         
Operating loss before income taxes
                                                        
and interest expense
    
(2,946
)
  
(2,494
)
  
(2,596
)
  
(2,231
)
  
(2,701
)
  
(10,022
)
  
(8,334
)
  
8.3
%
  
-20.3
%
                                                         
Interest expense
    
3,776
   
3,645
   
3,532
   
2,785
   
2,581
   
12,543
   
15,885
   
-31.6
%
  
-21.0
%
                                                         
Pre-tax operating loss
  
$
(6,722
)
$
(6,139
)
$
(6,128
)
$
(5,016
)
$
(5,282
)
$
(22,565
)
$
(24,219
)
  
21.4
%
  
6.8
%
 
 
 
16
 

PMA Capital Corporation  
Operating Cash Flows - Consolidated  
(In Thousands)  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
  
                                
Receipts:
                               
Premiums and other revenues collected
  
$
98,661
  
$
104,991
  
$
96,652
  
$
108,027
  
$
93,253
  
$
402,923
  
$
394,900
  
Investment income received
    
16,393
   
15,368
   
14,890
   
11,795
   
13,730
   
55,783
   
61,805
 
Total receipts
    
115,054
   
120,359
   
111,542
   
119,822
   
106,983
   
458,706
   
456,705
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
20,720
   
3,496
   
17,337
   
17,034
   
22,696
   
60,563
   
55,365
 
Losses and LAE paid - prior years
    
174,212
   
92,597
   
92,004
   
65,455
   
90,825
   
340,881
   
507,035
 
Total losses and LAE paid
    
194,932
   
96,093
   
109,341
   
82,489
   
113,521
   
401,444
   
562,400
 
Insurance operating expenses paid
    
27,271
   
46,203
   
39,618
   
26,899
   
30,327
   
143,047
   
144,497
 
Policyholders' dividends paid
    
531
   
246
   
397
   
451
   
812
   
1,906
   
4,750
 
Interest on corporate debt
    
2,197
   
4,791
   
2,965
   
3,470
   
2,461
   
13,687
   
13,898
 
Total disbursements
    
224,931
   
147,333
   
152,321
   
113,309
   
147,121
   
560,084
   
725,545
 
                                             
Net other
    
(15,349
)
  
(12,368
)
  
7,406
   
(9,204
)
  
19,380
   
5,214
   
(3,481
)
                                             
Net operating cash flows
  
$
(125,226
)
$
(39,342
)
$
(33,373
)
$
(2,691
)
$
(20,758
)
$
(96,164
)
$
(272,321
)
 
 
 
17
 

PMA Capital Corporation  
Operating Cash Flows - PMA Insurance Group  
(In Thousands)  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
  
                                
Receipts:
                               
Premiums and other revenues collected
  
$
97,910
  
$
99,740
  
$
94,320
  
$
107,102
  
$
92,720
  
$
393,882
  
$
382,440
  
Investment income received
    
10,606
   
10,479
   
10,598
   
8,831
   
10,564
   
40,472
   
39,954
 
Total receipts
    
108,516
   
110,219
   
104,918
   
115,933
   
103,284
   
434,354
   
422,394
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
20,720
   
3,496
   
17,337
   
17,034
   
22,696
   
60,563
   
55,347
 
Losses and LAE paid - prior years
    
43,853
   
65,113
   
57,537
   
45,463
   
44,787
   
212,900
   
241,648
 
Total losses and LAE paid
    
64,573
   
68,609
   
74,874
   
62,497
   
67,483
   
273,463
   
296,995
 
Insurance operating expenses paid
    
23,305
   
42,110
   
35,129
   
24,446
   
26,521
   
128,206
   
128,519
 
Policyholders' dividends paid
    
531
   
246
   
397
   
451
   
812
   
1,906
   
4,750
 
Interest on corporate debt
    
80
   
224
   
227
   
246
   
255
   
952
   
80
 
Total disbursements
    
88,489
   
111,189
   
110,627
   
87,640
   
95,071
   
404,527
   
430,344
 
                                             
Net other
    
(18,742
)
  
(6,376
)
  
1,955
   
(1,939
)
  
4,615
   
(1,745
)
  
3,032
 
                                             
Net operating cash flows
  
$
1,285
  
$
(7,346
)
$
(3,754
)
$
26,354
  
$
12,828
  
$
28,082
  
$
(4,918
)
 
 
 
18
 

PMA Capital Corporation  
Operating Cash Flows - Run-off Operations  
(In Thousands)  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
 Twelve
 
Twelve
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 Months
 
Months
 
 
 
2005
 
2006
 
2006
 
2006
 
2006
 
 2006
 
2005
  
                                
Receipts:
                               
Premiums collected
  
$
751
  
$
5,251
  
$
2,332
  
$
925
  
$
533
  
$
9,041
  
$
12,460
  
Investment income received
    
5,787
   
4,889
   
4,292
   
2,964
   
3,166
   
15,311
   
21,851
 
Total receipts
    
6,538
   
10,140
   
6,624
   
3,889
   
3,699
   
24,352
   
34,311
 
                                             
Disbursements:
                                            
Losses and LAE paid:
                                            
Losses and LAE paid - current year
    
-
   
-
   
-
   
-
   
-
   
-
   
18
 
Losses and LAE paid - prior years
    
130,359
   
27,484
   
34,467
   
19,992
   
46,038
   
127,981
   
265,387
 
Total losses and LAE paid
    
130,359
   
27,484
   
34,467
   
19,992
   
46,038
   
127,981
   
265,405
 
Insurance operating expenses paid
    
3,966
   
4,093
   
4,489
   
2,453
   
3,806
   
14,841
   
15,978
 
Total disbursements
    
134,325
   
31,577
   
38,956
   
22,445
   
49,844
   
142,822
   
281,383
 
                                             
Net other
    
4,004
   
1,083
   
1,775
   
(5,500
)
  
8,071
   
5,429
   
(2,872
)
                                             
Net operating cash flows
  
$
(123,783
)
$
(20,354
)
$
(30,557
)
$
(24,056
)
$
(38,074
)
$
(113,041
)
$
(249,944
)
                                             
 
 
 
19
 

PMA Capital Corporation  
Statutory Surplus  
(In Thousands)  
                                
   
4th
 
1st
 
2nd
 
3rd
 
4th
 
  
 
 
 
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
  
 
 
 
 
 
2005
 
2006
 
2006
 
2006
 
20061
           
                                
                                
PMA Pool 2
  
$
315,056
  
$
316,726
  
$
321,114
  
$
325,242
  
$
321,2454
              
PMA Capital Insurance Company 3
    
204,920
   
203,261
   
125,989
5  
123,428
   
121,566 4
              
                                             
PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(In Thousands)
                                             
 
    
4th
 
 
1st
 
 
2nd
 
 
3rd
 
 
4th
 
 
Twelve
 
 
Twelve
 
 
 
 
Quarter
 
 
Quarter
 
 
Quarter
 
 
Quarter
 
 
Quarter
 
 
Months
 
 
Months
 
 
 
 
2005
 
 
2006
 
 
2006
 
 
2006
 
 
20061
 
 
20061
 
 
2005
  
                                             
Net Premiums Written:
                                            
Workers' Compensation & Integrated
                                            
Disability
  
$
63,086
  
$
100,096
  
$
76,602
  
$
95,437
  
$
58,731
  
$
330,866
  
$
330,202
  
Other Commercial Lines
    
4,723
   
11,048
   
6,687
   
6,067
   
4,637
   
28,439
   
39,995
 
Total - PMA Pool
  
$
67,809
  
$
111,144
  
$
83,289
  
$
101,504
  
$
63,368
  
$
359,305
  
$
370,197
  
                                             
Statutory Ratios:
                                            
Loss and LAE ratio
    
73.0
%
  
71.5
%
  
72.5
%
  
72.1
%
  
71.3
%
  
71.9
%
  
73.1
%
Underwriting expense ratio
    
32.5
%
  
24.6
%
  
31.6
%
  
26.3
%
  
37.5
%
  
29.0
%
  
27.6
%
Policyholders' dividend ratio
    
1.1
%
  
0.9
%
  
0.1
%
  
0.5
%
  
0.6
%
  
0.5
%
  
0.9
%
Combined ratio
    
106.6
%
  
97.0
%
  
104.2
%
  
98.9
%
  
109.4
%
  
101.4
%
  
101.6
%
Operating ratio
    
98.6
%
  
88.4
%
  
96.0
%
  
90.5
%
  
99.8
%
  
92.7
%
  
93.4
%
                                             
 
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 $141.9 million and $1.5 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 2/21/2007):
          
   
A.M. Best
  
Moody's
  
PMA Pool 1
    
A- (4th of 16
)
  
Baa3 (10th 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