8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) November 1, 2007

PMA Capital Corporation

(Exact name of registrant as specified in its charter)

Pennsylvania	001-31706	23-2217932
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

380 Sentry Parkway Blue Bell, Pennsylvania	19422
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:	(610) 397-5298

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

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

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On November 1, 2007, PMA Capital Corporation (the “Registrant”) issued a news release regarding its Third Quarter 2007 results, a copy of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.  Additionally, the Registrant’s Third Quarter 2007 Statistical Supplement is furnished as Exhibit 99.2 and is incorporated herein by reference.

The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.  The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit 99.1	PMA Capital Corporation News Release, dated November 1, 2007
Exhibit 99.2	PMA Capital Corporation Third Quarter 2007 Statistical Supplement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PMA Capital Corporation
November 1, 2007	By:	/s/ William E. Hitselberger
	Name:		William E. Hitselberger
	Title:		Executive Vice President and Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
Exhibit 99.1	PMA Capital Corporation News Release, dated November 1, 2007
Exhibit 99.2	PMA Capital Corporation Third Quarter 2007 Statistical Supplement

EX-99.1

Exhibit 99.1

380 Sentry Parkway Blue Bell, PA 19422
		PRESS RELEASE
For Release:          Contact:	Immediate William E. Hitselberger (610) 397-5298

PMA Capital Reports Continued Improvement in Core Operations, Third Quarter Loss After Charge

Blue Bell, PA, November 1, 2007 -- PMA Capital Corporation (NASDAQ: PMACA) today announced financial results for the third quarter of 2007.  PMA Capital reported a net loss of $8.8 million, or 28 cents per share, for the third quarter of 2007, which included an after-tax charge of $14.3 million, or 45 cents per share, for prior year loss development at the Company’s Run-off Operations.  For the same period in 2006, PMA Capital had net income of $1.5 million, or 5 cents per diluted share.  For the nine months ended September 30, 2007, the Company reported a net loss of $5.0 million, or 15 cents per share, compared to net income of $3.2 million, or 10 cents per diluted share, for the same period last year.

The Company noted significant operating achievements at The PMA Insurance Group:

·   Third quarter pre-tax operating income increased to $12.4 million, compared to $8.4 million in the third quarter of 2006;

·   Both third quarter and year-to-date combined ratios were below 100%;

·   Direct premiums written, excluding production from our partnership with Midwest Insurance Companies (“Midwest”), were up 8% year-to-date and 6% quarter-to-date;

·   New business written, excluding Midwest production, increased 28% to $91.5 million year-to-date and 26% to $26.8 million in the third quarter, compared to the same periods last year; and

·   Workers’ compensation renewal retention rates improved to 89% for the quarter and to 87% for the first nine months of 2007.

At PMA Management Corp., service revenues increased by 16% in the quarter to $7.6 million and by 10% to $22.8 million for the nine months ended September 30, 2007, compared to the same periods last year.  The Company continues to see organic growth opportunities for its fee-based business and expects growth to continue from this service-focused aspect of the company.

Vincent T. Donnelly, President and Chief Executive Officer commented, “While disappointed with the run-off charge, we are pleased to report another quarter of positive momentum, with revenue growth and improving operating results at The PMA Insurance Group, and continued growth in our fee-based business.  During the third quarter, we completed our periodic comprehensive loss reserve review.  Our reserves at The PMA Insurance Group continue to develop as we expected.  During the review of our Run-off Operations, however, we observed increased loss development from a limited number of ceding

companies on our claims-made general liability business, primarily related to professional liability claims.  This increase in 2007 loss trends caused us to determine that reserve levels, primarily for accident years 2001 to 2003, needed to be increased by $22 million.  The claims-made general liability book of business represents about 20% of the gross reserves at the Run-off Operations segment.  The remaining book of run-off claims continues to perform in line with our expectations.”

On October 1, 2007, PMA Capital announced the acquisition of Midlands Management Corporation (“Midlands”), an Oklahoma City-based managing general agent, program administrator and provider of third party administrator (“TPA”) services.  Midlands had revenues of $30 million in 2006.

“We are excited about our business combination with Midlands.  This is a natural extension of our business model and builds upon our core competencies in TPA services and workers’ compensation insurance,” said Mr. Donnelly. “There is very little overlap in business between Midlands and PMA, which creates enhanced opportunities for the cross-selling of services in both companies. We expect the transaction to be immediately accretive, adding 7 to 10 cents per share to our 2008 earnings,” Mr. Donnelly concluded.

Operating income (loss), which the Company defines as net income (loss) excluding realized gains and losses, was an operating loss of $9.4 million, or 29 cents per share, for the quarter, compared to operating income of $2.0 million, or 6 cents per diluted share, in the third quarter of 2006.  The operating loss for the first nine months of 2007 was $4.2 million, or 13 cents per share, compared to operating income of $3.8 million, or 12 cents per diluted share, in the first nine months of 2006.

The net results included the following after-tax net realized gains (losses):

	Three months ended						Nine months ended
	September 30,						September 30,
(dollar amounts in thousands)	2007			2006			2007			2006
Net realized gains (losses) after tax:
Sales of investments	$	(2,012	)	$	111		$	(2,650	)	$	(606	)
Change in fair value of trading securities		2,712			-			2,257			-
Change in fair value of debt derivative		(29	)		(570	)		(257	)		50
Other		(62	)		(60	)		(161	)		(67	)
Net realized gains (losses) after tax	$	609		$	(519	)	$	(811	)	$	(623	)

Segment Operating Results

Operating income (loss), which we define as net income (loss) under accounting principles generally accepted in the United States (GAAP) excluding net realized investment gains and losses, is the financial performance measure used by our management and Board of Directors to evaluate and assess the results of our insurance businesses because (i) net realized investment gains and losses are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains and losses that do not relate to the operations of the individual segments.  Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

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

	Three months ended						Nine months ended
	September 30,						September 30,
(dollar amounts in thousands)	2007			2006			2007			2006
Pre-tax operating income (loss):
The PMA Insurance Group	$	12,363		$	8,351		$	32,486		$	23,163
Run-off Operations		(22,016	)		174			(23,461	)		763
Corporate & Other		(4,850	)		(5,016	)		(15,288	)		(17,283	)
Pre-tax operating income (loss)		(14,503	)		3,509			(6,263	)		6,643
Income tax expense (benefit)		(5,091	)		1,489			(2,108	)		2,800
Operating income (loss)		(9,412	)		2,020			(4,155	)		3,843
Realized gains (losses) after tax		609			(519	)		(811	)		(623	)
Net income (loss)	$	(8,803	)	$	1,501		$	(4,966	)	$	3,220

Beginning in the fourth quarter of 2007, we expect to report the combined operating results of Midlands and PMA Management Corp. in a new reporting segment within our consolidated results of operations.

The PMA Insurance Group

The PMA Insurance Group reported pre-tax operating income of $12.4 million for the third quarter, compared to $8.4 million for the same period last year.  Year-to-date pre-tax operating income was $32.5 million, compared to $23.2 million for the first nine months of 2006.  The increases in both periods were due to improved underwriting results and increased investment income.

Direct premiums written were $146.7 million for the third quarter of 2007, up from $127.5 million for the third quarter of 2006.  For the nine months ended September 30, 2007, direct premiums written increased to $418.8 million, compared to $347.5 million for the same period last year.  Included in direct premiums written for the third quarter and first nine months of 2007 were $13.7 million and $47.0 million of California workers’ compensation business produced under our partnership with Midwest, compared to $2.1 million for the same periods last year.  We wrote $39.2 million of new business in the third quarter of 2007, compared to $23.3 million during the same period last year.  Our year-to-date new business increased to $137.2 million, compared to $73.5 million for the first nine months of 2006.  Included in new business for the third quarter and first nine months of 2007 were $12.4 million and $45.7 million of the Midwest business, compared to $2.1 million for the same periods last year.  Our partnership with Midwest became effective September 1, 2006.  Our renewal retention rate on existing workers’ compensation accounts was 89% for the third quarter of 2007, compared to 88% for the same period in 2006, while our renewal retention rate for the first nine months of 2007 was 87%, up from 85% for the comparable period last year.

Net premiums written increased to $116.3 million in the third quarter of 2007, compared to $107.8 million in the same period last year.  Year-to-date net premiums written increased to $324.0 million, compared to $306.8 million during the same period in 2006.  Ceded premiums written increased for the third quarter and first nine months of 2007 primarily due to our cession of the California workers’ compensation premiums written under our partnership with Midwest.

For the third quarter and first nine months of 2007, the combined ratios on a GAAP basis were 97.3% and 99.0%, compared to 101.0% and 101.4% for the same periods last year.  These improvements primarily

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reflected lower loss and LAE and acquisition expense ratios, partially offset by higher policyholders’ dividend ratios.  The year-to-date combined ratio was also impacted by an improved operating expense ratio.

The improved loss and LAE ratios for both periods were primarily due to lower current accident year loss and LAE ratios, compared to 2006.  While our underwriting criteria remained consistent in 2007, our current accident year loss and LAE ratios benefited from changes in workers’ compensation products selected by our insureds and a reduced amount of integrated disability and assumed premiums in 2007.  Pricing changes coupled with payroll inflation for rate sensitive workers’ compensation business were slightly below overall estimated loss trends.  We estimated our medical cost inflation to be 8% during the first nine months of 2007, compared to our estimate of 8.5% through the first nine months of 2006.  We expect that medical cost inflation will continue to be a significant component of our overall loss experience.

The policyholders’ dividend ratios were higher in the third quarter and first nine months of 2007 than in the prior year periods.  The prior year periods reflected slightly higher than expected losses which resulted in lower than expected dividends on participating products where the policyholders may receive a dividend based, to a large extent, on their loss experience.

Fees earned under our partnership with Midwest reduced the 2007 acquisition expense ratios by 80 and 70 basis points for the quarter and year-to-date periods.  Controllable expenses, which include salaries, benefits and other headcount-related expenses, grew by 3% in the first nine months of 2007, compared to the 8% growth rate in direct premiums written.

Revenues from our TPA business at PMA Management Corp., which are included in other revenues, increased to $7.6 million for the three months ended September 30, 2007, from $6.6 million in the same period last year.  On a year-to-date basis, TPA revenues increased $2.0 million to $22.8 million compared to the first nine months of 2006.

Net investment income increased to $9.6 million in the third quarter of 2007, compared to $9.0 million in the prior year quarter.  For the first nine months of 2007, net investment income increased $2.7 million to $29.0 million, compared to the first nine months of 2006.  The improvements in 2007 were due primarily to higher yields on an increased invested asset base.

Run-off Operations

Our Run-off Operations, consisting of our former reinsurance and excess and surplus lines businesses, had pre-tax operating losses of $22.0 million and $23.5 million for the three and nine months ended September 30, 2007, compared to pre-tax operating income of $174,000 and $763,000 for the same periods last year.  Results in the third quarter and first nine months of 2007 included a pre-tax charge of $22 million for prior year loss development at the Run-off Operations.  The charge was primarily related to increased loss development from a limited number of ceding companies on its claims-made general liability business, primarily related to professional liability claims from accident years 2001 to 2003.

Net investment income and operating expenses continue to decline as we run-off this business.  Net investment income decreased to $3.5 million for the first nine months of 2007, from $7.3 million during the same period last year, due to a reduction in average invested assets of approximately $175 million, or 56%.

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Corporate and Other

The Corporate and Other segment, which includes primarily corporate expenses and debt service, recorded net expenses of $4.9 million during the third quarter of 2007, compared to $5.0 million during the same period last year.  Net expenses were $15.3 million during the first nine months of 2007, which decreased from $17.3 million for the same period in 2006.  The improvement for the first nine months was primarily due to lower interest expense.  The lower interest expense resulted from a lower level of debt outstanding in 2007, compared to last year.

Financial Condition

Total assets were $2.7 billion as of September 30, 2007 and December 31, 2006.  Shareholders’ equity was $407.1 million as of September 30, 2007, compared to $419.1 million as of December 31, 2006.  Book value per share decreased 8 cents during 2007 to $12.75 as of September 30, 2007.  The decreases in both shareholders’ equity and book value per share were primarily due to the net loss.  Book value per share benefited from the positive impact of share repurchases.  The decrease in shareholders’ equity was also impacted by share repurchases made during 2007.

In May 2007, our Board of Directors authorized the repurchase of up to $10 million of our Class A Common Stock.  During the third quarter and first nine months of 2007, we repurchased 245,586 and 827,142 shares at a total cost of $2.3 million and $8.6 million, respectively.  Decisions regarding share repurchases are subject to prevailing market conditions and an evaluation of the costs and benefits associated with alternative uses of capital.

The components of our debt were as follows:

	As of			As of
	September 30,			December 31,
(dollar amounts in thousands)	2007			2006			Maturity
6.50% Convertible Debt 1	$	4,584		$	19,326		2022
Derivative component of 6.50% Convertible Debt		762			3,115
4.25% Convertible Debt 2		455			455		2022
8.50% Senior Notes		54,900			54,900		2018
Junior subordinated debt		64,435			43,816		2033-2037
Surplus Notes		10,000			10,000		2035
Unamortized debt discount		(64	)		(401	)
Total long-term debt	$	135,072		$	131,211

(1)   Holders, at their option, may require us to repurchase all or a portion of their debentures on June 30, 2009 at 114% of the principal amount. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share.

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

At September 30, 2007, we had $50.9 million in cash and short-term investments at the holding company and its non-regulated subsidiaries.  On October 1, 2007, the holding company paid $23.2 million in cash for the acquisition of Midlands, which included $3.4 million for net worth.  The ultimate purchase price for the stock, which could range from $22.8 million to $44.5 million, will be based on Midlands’ ability to achieve earnings growth for its business over the next four years.  The Company expects to be able to pay most of any future earn-out payments through cash generated from Midlands’ operations.

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The PMA Insurance Group had statutory capital and surplus of $339.8 million as of September 30, 2007, compared to $321.2 million as of December 31, 2006.  The PMA Insurance Group has the ability to pay $26.5 million in dividends during 2007 without the prior approval of the Pennsylvania Insurance Department.  The statutory capital and surplus of PMA Capital Insurance Company (“PMACIC”), PMA Capital Corporation’s wholly-owned run-off reinsurance subsidiary, was $58.0 million as of September 30, 2007, compared to $121.6 million as of December 31, 2006.  The reduction in PMACIC’s statutory capital and surplus was due primarily to its extraordinary dividend payment of $37.5 million to PMA Capital in April 2007 and its 2007 statutory net loss.  The adverse development cover we have at PMACIC reduced the statutory effect of the third quarter reserve charge to $14.3 million.  The Company intends to commute the adverse development cover in the fourth quarter of 2007.  If the adverse development cover is commuted, statutory capital will be reduced by approximately $7 million.

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Conference Call with Investors

As a reminder, we will hold a conference call with investors beginning at 8:30 a.m. Eastern Time on Friday, November 2^nd to review our third quarter 2007 results.  The conference call will be available via a live webcast over the Internet at www.pmacapital.com.  To access the webcast, enter the Investor Information section, click on News Releases and then click on the microphone icon.  Please note that by accessing the conference call via the Internet, you will be in a listen-only mode.

The call-in numbers and passcodes for the conference call are as follows:

Live Call	Replay
888-713-4205(Domestic)	888-286-8010(Domestic)
617-213-4862(International)	617-801-6888(International)
Passcode 23672639	Passcode 30465219

You may pre-register for the conference call using the following link:

www.theconferencingservice.com/prereg/key.process?key=PKJP9M6NN

Pre-registering is not mandatory but is recommended as it will provide you immediate entry into the call and will facilitate the timely start of the conference.  Pre-registration only takes a few moments and you may pre-register at anytime, including up to and after the call start time.   Alternatively, if you would rather be placed into the call by an operator, please use the dial-in information above at least 15 minutes prior to the call start time.

A replay of the conference call will be available over the Internet or by dialing the call-in number for the replay and using the passcode.  The replay will be available from approximately 10:30 a.m. Eastern Time on Friday, November 2^nd until 11:59 p.m. Eastern Time on Friday, December 7^th.

Quarterly Statistical Supplement

Our Third Quarter Statistical Supplement, which provides more detailed historical information about us, is available on our website.  Please see the Investor Information section of our website at www.pmacapital.com.  You may also obtain a copy of this supplement by sending your request to:

PMA Capital Corporation

380 Sentry Parkway

Blue Bell, PA 19422

Attention: Investor Relations

Alternatively, you may make a request by telephone (610-397-5298) or by e-mail to InvestorRelations@pmacapital.com.  We will also furnish a copy of this news release and the Statistical Supplement to the SEC on a Form 8-K.  A copy of the Form 8-K will be available on the SEC’s website at www.sec.gov.

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CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The statements contained in this press release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include estimates, assumptions or projections and are based on currently available financial, competitive and economic data and the Company’s current operating plans.  Although the Company’s management believes that its expectations are reasonable, there can be no assurance that the Company’s actual results will not differ materially from those expected.  The factors that could cause actual results to differ materially from those in the forward-looking statements, include, but are not limited to:

·   our ability to effect an efficient withdrawal from the reinsurance business, including the commutation of reinsurance business with certain large ceding companies, without incurring any significant additional liabilities;

·   adverse property and casualty loss development for events that we insured in prior years, including unforeseen increases in medical costs and changing judicial interpretations of available coverage for certain insured losses;

·   our ability to increase the amount of new and renewal business written by The PMA Insurance Group at adequate prices or revenues of our service operations including Midlands Management Corporation;

·   our ability to have sufficient cash at the holding company to meet our debt service and other obligations, including any restrictions such as those imposed by the Pennsylvania Insurance Department on receiving dividends from our insurance subsidiaries in an amount sufficient to meet such obligations;

·   any future lowering or loss of one or more of our financial strength and debt ratings, and the adverse impact that any such downgrade may have on our ability to compete and to raise capital, and our liquidity and financial condition;

·   adequacy and collectibility of reinsurance that we purchased;

·   adequacy of reserves for claim liabilities;

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

·   regulatory changes in risk-based capital or other standards that affect the cost of, or demand for, our products or otherwise affect our ability to conduct business, including any future action with respect to our business taken by the Pennsylvania Insurance Department or any other state insurance department;

·   the impact of future results on the recoverability of our deferred tax asset;

·   the outcome of any litigation against us;

·   competitive conditions that may affect the level of rate adequacy related to the amount of risk undertaken and that may influence the sustainability of adequate rate changes;

·   our ability to implement and maintain rate increases;

·   the effect of changes in workers’ compensation statutes and their administration, which may affect the rates that we can charge and the manner in which we administer claims;

·   our ability to predict and effectively manage claims related to insurance and reinsurance policies;

·   uncertainty as to the price and availability of reinsurance on business we intend to write in the future, including reinsurance for terrorist acts;

·   severity of natural disasters and other catastrophes, including the impact of future acts of terrorism, in connection with insurance and reinsurance policies;

·   changes in general economic conditions, including the performance of financial markets, interest rates and the level of unemployment;

·   uncertainties related to possible terrorist activities or international hostilities and whether TRIEA is extended beyond its December 31, 2007 termination date; and

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

You should not place undue reliance on any forward-looking statements in this press release.  Forward-looking statements are not generally required to be publicly revised as circumstances change and we do not intend to update the forward-looking statements in this press release to reflect circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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PMA Capital Corporation

Selected Financial Data

(Unaudited)

	Three months ended September 30,
(dollar amounts in thousands)		2007			2006
Direct premiums written:
The PMA Insurance Group		$	146,702		$	127,492
Run-off Operations			-			-
Corporate and Other			(155	)		(158	)
Consolidated direct premiums written		$	146,547		$	127,334
Net premiums written:
The PMA Insurance Group		$	116,271		$	107,795
Run-off Operations			1,216			701
Corporate and Other			(155	)		(158	)
Consolidated net premiums written		$	117,332		$	108,338
Revenues:
Net premiums earned:
The PMA Insurance Group		$	93,928		$	94,696
Run-off Operations			1,105			746
Corporate and Other			(155	)		(158	)
Consolidated net premiums earned			94,878			95,284
Net investment income			10,670			10,747
Realized gains (losses)			937			(799	)
Other revenues			7,649			6,624
Consolidated revenues		$	114,134		$	111,856
Components of net income (loss):
Pre-tax operating income (loss) (1):
The PMA Insurance Group		$	12,363		$	8,351
Run-off Operations			(22,016	)		174
Corporate and Other			(4,850	)		(5,016	)
Pre-tax operating income (loss)			(14,503	)		3,509
Income tax expense (benefit)			(5,091	)		1,489
Operating income (loss)			(9,412	)		2,020
Realized gains (losses) after tax			609			(519	)
Net income (loss)		$	(8,803	)	$	1,501
Weighted average common shares outstanding:
Basic			32,001,649			32,444,916
Diluted			32,001,649			32,922,643

(1)   Operating income (loss), which is GAAP net income (loss)  excluding net realized investment gains and losses, is the financial performance measure used by our management and our Board of Directors to evaluate and assess the results of our insurance businesses because (i) net realized investment gains and losses are unpredictable and not necessarily indicative of current operating fundamentals or future performance and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains and losses that do not relate to the operations of the individual segments.  Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

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PMA Capital Corporation

Selected Financial Data

(Unaudited)

	Nine months ended September 30,
(dollar amounts in thousands)		2007			2006
Direct premiums written:
The PMA Insurance Group		$	418,751		$	347,499
Run-off Operations			-			47
Corporate and Other			(471	)		(539	)
Consolidated direct premiums written		$	418,280		$	347,007
Net premiums written:
The PMA Insurance Group		$	323,980		$	306,824
Run-off Operations			4,705			1,834
Corporate and Other			(471	)		(539	)
Consolidated net premiums written		$	328,214		$	308,119
Revenues:
Net premiums earned:
The PMA Insurance Group		$	285,097		$	280,720
Run-off Operations			2,815			1,684
Corporate and Other			(471	)		(539	)
Consolidated net premiums earned			287,441			281,865
Net investment income			32,320			33,205
Realized losses			(1,247	)		(959	)
Other revenues			23,050			21,014
Consolidated revenues		$	341,564		$	335,125
Components of net income (loss):
Pre-tax operating income (loss) (1):
The PMA Insurance Group		$	32,486		$	23,163
Run-off Operations			(23,461	)		763
Corporate and Other			(15,288	)		(17,283	)
Pre-tax operating income (loss)			(6,263	)		6,643
Income tax expense (benefit)			(2,108	)		2,800
Operating income (loss)			(4,155	)		3,843
Realized losses after-tax			(811	)		(623	)
Net income (loss)		$	(4,966	)	$	3,220
Weighted average common shares outstanding:
Basic			32,304,383			32,159,316
Diluted			32,304,383			32,669,303

(1)   Operating income (loss), which is GAAP net income (loss) excluding net realized investment gains and losses, is the financial performance measure used by our management and our Board of Directors to evaluate and assess the results of our insurance businesses because (i) net realized investment gains and losses are unpredictable and not necessarily indicative of current operating fundamentals or future performance and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains and losses that do not relate to the operations of the individual segments.  Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations.

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PMA Capital Corporation

GAAP Consolidated Balance Sheets

(Unaudited)

	September 30,			December 31,
(dollar amounts in thousands, except per share data)	2007			2006
Assets:
Investments:
Fixed maturities available for sale	$	725,637		$	871,951
Fixed maturities trading		50,412			-
Short-term investments		104,692			86,448
Total investments		880,741			958,399
Cash		8,687			14,105
Accrued investment income		5,799			9,351
Premiums receivable		259,920			207,771
Reinsurance receivables		1,107,292			1,039,979
Prepaid reinsurance premiums		42,334			26,730
Deferred income taxes, net		103,284			100,019
Deferred acquisition costs		42,626			36,239
Funds held by reinsureds		104,715			130,214
Other assets		159,032			143,600
Total assets	$	2,714,430		$	2,666,407
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,586,471		$	1,634,865
Unearned premiums		257,598			202,973
Debt		135,072			131,211
Accounts payable, accrued expenses
and other liabilities		225,783			191,540
Reinsurance funds held and balances payable		97,651			82,275
Dividends to policyholders		4,730			4,450
Total liabilities		2,307,305			2,247,314
Shareholders' Equity:
Class A Common Stock		171,090			171,090
Additional paid-in capital		110,687			109,922
Retained earnings		174,190			184,216
Accumulated other comprehensive loss		(16,673	)		(20,624	)
Treasury stock, at cost		(32,169	)		(25,511	)
Total shareholders' equity		407,125			419,093
Total liabilities and shareholders' equity	$	2,714,430		$	2,666,407
Shareholders' equity per share	$	12.75		$	12.83

11

PMA Capital Corporation

GAAP Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,
(dollar amounts in thousands, except per share data)		2007			2006
Gross premiums written		$	151,039		$	134,271
Net premiums written		$	117,332		$	108,338
Revenues:
Net premiums earned		$	94,878		$	95,284
Net investment income			10,670			10,747
Net realized investment gains (losses)			937			(799	)
Other revenues			7,649			6,624
Total revenues			114,134			111,856
Expenses:
Losses and loss adjustment expenses			85,610			66,754
Acquisition expenses			18,221			19,811
Operating expenses			18,589			18,953
Dividends to policyholders			2,205			589
Interest expense			3,075			3,039
Total losses and expenses			127,700			109,146
Pre-tax income (loss)			(13,566	)		2,710
Income tax expense (benefit):
Current			537			-
Deferred			(5,300	)		1,209
Total income tax expense (benefit)			(4,763	)		1,209
Net income (loss)		$	(8,803	)	$	1,501
Net income (loss) per share:
Basic		$	(0.28	)	$	0.05
Diluted		$	(0.28	)	$	0.05

12

PMA Capital Corporation

GAAP Consolidated Statements of Operations

(Unaudited)

	Nine months ended September 30,
(dollar amounts in thousands, except per share data)		2007			2006
Gross premiums written		$	434,362		$	368,313
Net premiums written		$	328,214		$	308,119
Revenues:
Net premiums earned		$	287,441		$	281,865
Net investment income			32,320			33,205
Net realized investment losses			(1,247	)		(959	)
Other revenues			23,050			21,014
Total revenues			341,564			335,125
Expenses:
Losses and loss adjustment expenses			220,786			198,526
Acquisition expenses			56,372			56,688
Operating expenses			57,308			60,520
Dividends to policyholders			5,874			3,022
Interest expense			8,734			10,685
Total losses and expenses			349,074			329,441
Pre-tax income (loss)			(7,510	)		5,684
Income tax expense (benefit):
Current			737			-
Deferred			(3,281	)		2,464
Total income tax expense (benefit)			(2,544	)		2,464
Net income (loss)		$	(4,966	)	$	3,220
Net income (loss) per share:
Basic		$	(0.15	)	$	0.10
Diluted		$	(0.15	)	$	0.10

13

EX-99.2

Exhibit 99.2

Statistical Supplement

Third Quarter

2007

PMA Capital Corporation
Statistical Supplement
Third Quarter - 2007
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
Selected Balance Sheet Items - Midwest; Rollforward of Deferred Policy Acquisition Costs - PMA Insurance Group;
Balance Sheet Impact of Commutations - Run-off Operations			8
Invested Assets and Net Investment Income; Debt			9
Segment Information:
Statements of Operations - Consolidating - Year-to-date		10 -  11
Statements of Operations - Consolidating - Third Quarter		12 -  13
Statements of Operations - PMA Insurance Group			14
Insurance Ratios - PMA Insurance Group			15
Statements of Operations - Run-off Operations			16
Statements of Operations - Corporate & Other			17
Operating Cash Flow Information:
Operating Cash Flows - Consolidated			18
Operating Cash Flows - PMA Insurance Group			19
Operating Cash Flows - Run-off Operations			20
Statutory Financial Information:
Statutory Surplus; Statutory Financial Information - PMA Pool			21
Other Information:
Industry Ratings and Market Information			22
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
	2006			2006			2007			2007			2007			Quarter
Gross Premiums Written by Segment:
PMA Insurance Group	$	133,903		$	89,484		$	164,720		$	115,418		$	149,591			11.7	%
Run-off Operations		526			102			1,507			1,994			1,603		NM
Corporate & Other		(158	)		(157	)		(156	)		(160	)		(155	)		1.9	%
Gross premiums written	$	134,271		$	89,429		$	166,071		$	117,252		$	151,039			12.5	%
Net Premiums Written by Segment:
PMA Insurance Group	$	107,795		$	66,873		$	125,893		$	81,816		$	116,271			7.9	%
Run-off Operations		701			309			1,495			1,994			1,216			73.5	%
Corporate & Other		(158	)		(157	)		(156	)		(160	)		(155	)		1.9	%
Net premiums written	$	108,338		$	67,025		$	127,232		$	83,650		$	117,332			8.3	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	8,351		$	5,721		$	11,723		$	8,400		$	12,363			48.0	%
Run-off Operations		174			485			(738	)		(707	)		(22,016	)	NM
Corporate & Other		(5,016	)		(5,282	)		(5,309	)		(5,129	)		(4,850	)		3.3	%
Pre-tax operating income (loss)		3,509			924			5,676			2,564			(14,503	)	NM
Net realized investment gains (losses)		(799	)		(26	)		(430	)		(1,754	)		937		NM
Pre-tax income (loss)		2,710			898			5,246			810			(13,566	)	NM
Income tax expense (benefit)		1,209			67			1,900			319			(4,763	)	NM
Net income (loss)	$	1,501		$	831		$	3,346		$	491		$	(8,803	)	NM
After-tax operating income (loss)	$	2,020		$	848		$	3,626		$	1,631		$	(9,412	)	NM
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.05		$	0.03		$	0.10		$	0.01		$	(0.28	)	NM
Less the impact of:
Realized gains (losses) after tax		(0.01	)		-			(0.01	)		(0.04	)		0.01		NM
After-tax operating income (loss)	$	0.06		$	0.03		$	0.11		$	0.05		$	(0.29	)	NM
Capitalization:
Debt	$	131,561		$	131,211		$	130,822		$	144,629		$	135,072			2.7	%
Shareholders' equity excluding FAS 115 unrealized loss		418,372			425,132			424,894			420,150			409,263			-2.2	%
Total capitalization excluding FAS 115 unrealized loss		549,933			556,343			555,716			564,779			544,335			-1.0	%
FAS 115 unrealized loss		(6,169	)		(6,039	)		(1,084	)		(9,179	)		(2,138	)		65.3	%
Total capitalization including FAS 115 unrealized loss	$	543,764		$	550,304		$	554,632		$	555,600		$	542,197			-0.3	%
Book Value Per Share:
Excluding FAS 115 unrealized loss	$	12.82		$	13.02		$	13.02		$	13.06		$	12.82			0.0	%
Including FAS 115 unrealized loss	$	12.63		$	12.83		$	12.99		$	12.78		$	12.75			1.0	%
Debt to Total Capital:
Excluding FAS 115 unrealized loss		23.9	%		23.6	%		23.5	%		25.6	%		24.8	%		3.8	%
Including FAS 115 unrealized loss		24.2	%		23.8	%		23.6	%		26.0	%		24.9	%		2.9	%
Interest Coverage:
Income before interest and income taxes
to interest expense		1.89			1.32			2.86			1.28		NM			NM
Operating income before interest and income taxes
to interest expense		2.15			1.33			3.02			1.90		NM			NM

1

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
	Nine			Nine			% Change
	Months			Months			Nine
	2007			2006			Months
Gross Premiums Written by Segment:
PMA Insurance Group	$	429,729		$	366,968			17.1	%
Run-off Operations		5,104			1,884		NM
Corporate & Other		(471	)		(539	)		12.6	%
Gross premiums written	$	434,362		$	368,313			17.9	%
Net Premiums Written by Segment:
PMA Insurance Group	$	323,980		$	306,824			5.6	%
Run-off Operations		4,705			1,834		NM
Corporate & Other		(471	)		(539	)		12.6	%
Net premiums written	$	328,214		$	308,119			6.5	%
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	32,486		$	23,163			40.2	%
Run-off Operations		(23,461	)		763		NM
Corporate & Other		(15,288	)		(17,283	)		11.5	%
Pre-tax operating income (loss)		(6,263	)		6,643		NM
Net realized investment losses		(1,247	)		(959	)		-30.0	%
Pre-tax income (loss)		(7,510	)		5,684		NM
Income tax expense (benefit)		(2,544	)		2,464		NM
Net income (loss)	$	(4,966	)	$	3,220		NM
After-tax operating income (loss)	$	(4,155	)	$	3,843		NM
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	(0.15	)	$	0.10		NM
Less the impact of:
Realized losses after tax		(0.02	)		(0.02	)		0.0	%
After-tax operating income (loss)	$	(0.13	)	$	0.12		NM

2

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
	3rd		4th		1st		2nd		3rd			Nine			Nine
	Quarter		Quarter		Quarter		Quarter		Quarter			Months			Months
	2006		2006		2007		2007		2007			2007			2006
Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.05	$	0.03	$	0.10	$	0.01	$	(0.28	)	$	(0.15	)	$	0.10
Pre-tax operating income (loss)	$	0.11	$	0.03	$	0.17	$	0.08	$	(0.45	)	$	(0.19	)	$	0.20
After-tax operating income (loss)	$	0.06	$	0.03	$	0.11	$	0.05	$	(0.29	)	$	(0.13	)	$	0.12
Diluted weighted average common
shares outstanding		32,922,643		32,916,423		32,900,397		32,838,046		32,001,649			32,304,383			32,669,303
Dividends declared:
Class A Common Stock	$	-	$	-	$	-	$	-	$	-		$	-		$	-
Actual common shares issued
and outstanding		32,646,689		32,659,194		32,630,669		32,163,072		31,920,486			31,920,486			32,646,689
Class A Common Stock prices:
High	$	10.75	$	10.15	$	9.77	$	11.40	$	11.17		$	11.40		$	10.75
Low	$	8.60	$	8.60	$	8.40	$	9.12	$	8.63		$	8.40		$	8.60
Close	$	8.82	$	9.22	$	9.39	$	10.69	$	9.50		$	9.50		$	8.82

3

This Page Intentionally Left Blank

4

PMA Capital Corporation
Consolidated Statements of Operations
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			3rd
	2006			2006			2007			2007			2007			Quarter
Gross Premiums Written	$	134,271		$	89,429		$	166,071		$	117,252		$	151,039			12.5	%
Net Premiums Written	$	108,338		$	67,025		$	127,232		$	83,650		$	117,332			8.3	%
Revenues:
Net premiums earned	$	95,284		$	88,316		$	95,032		$	97,531		$	94,878			-0.4	%
Net investment income		10,747			10,333			10,525			11,125			10,670			-0.7	%
Net realized investment gains (losses)		(799	)		(26	)		(430	)		(1,754	)		937		NM
Other revenues		6,624			7,107			7,787			7,614			7,649			15.5	%
Total revenues		111,856			105,730			112,914			114,516			114,134			2.0	%
Expenses:
Losses and loss adjustment expenses		66,754			60,695			67,026			68,150			85,610			28.2	%
Acquisition expenses		19,811			17,825			19,138			19,013			18,221			-8.0	%
Operating expenses		18,953			22,966			17,066			21,653			18,589			-1.9	%
Dividends to policyholders		589			510			1,622			2,047			2,205		NM
Interest expense		3,039			2,836			2,816			2,843			3,075			1.2	%
Total losses and expenses		109,146			104,832			107,668			113,706			127,700			17.0	%
Pre-tax income (loss)		2,710			898			5,246			810			(13,566	)	NM
Income tax expense (benefit):
Current		-			-			-			200			537		NM
Deferred		1,209			67			1,900			119			(5,300	)	NM
Total income tax expense (benefit)		1,209			67			1,900			319			(4,763	)	NM
Net income (loss)	$	1,501		$	831		$	3,346		$	491		$	(8,803	)	NM
Pre-tax operating income (loss)	$	3,509		$	924		$	5,676		$	2,564		$	(14,503	)	NM
After-tax operating income (loss)	$	2,020		$	848		$	3,626		$	1,631		$	(9,412	)	NM

5

PMA Capital Corporation
Consolidated Statements of Operations
(Dollar Amounts in Thousands)
	Nine			Nine			% Change
	Months			Months			Nine
	2007			2006			Months
Gross Premiums Written	$	434,362		$	368,313			17.9	%
Net Premiums Written	$	328,214		$	308,119			6.5	%
Revenues:
Net premiums earned	$	287,441		$	281,865			2.0	%
Net investment income		32,320			33,205			-2.7	%
Net realized investment losses		(1,247	)		(959	)		-30.0	%
Other revenues		23,050			21,014			9.7	%
Total revenues		341,564			335,125			1.9	%
Expenses:
Losses and loss adjustment expenses		220,786			198,526			11.2	%
Acquisition expenses		56,372			56,688			-0.6	%
Operating expenses		57,308			60,520			-5.3	%
Dividends to policyholders		5,874			3,022			94.4	%
Interest expense		8,734			10,685			-18.3	%
Total losses and expenses		349,074			329,441			6.0	%
Pre-tax income (loss)		(7,510	)		5,684		NM
Income tax expense (benefit):
Current		737			-		NM
Deferred		(3,281	)		2,464		NM
Total income tax expense (benefit)		(2,544	)		2,464		NM
Net income (loss)	$	(4,966	)	$	3,220		NM
Pre-tax operating income (loss)	$	(6,263	)	$	6,643		NM
After-tax operating income (loss)	$	(4,155	)	$	3,843		NM

6

PMA Capital Corporation
Consolidated Balance Sheets
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2006			2006			2007			2007			2007
Assets:
Investments in fixed maturities available for sale	$	904,074		$	871,951		$	735,048		$	733,083		$	725,637
Investments in fixed maturities trading		-			-			122,669			84,714			50,412
Short-term investments		59,227			86,448			93,385			100,788			104,692
Total investments		963,301			958,399			951,102			918,585			880,741
Cash		30,387			14,105			9,924			8,494			8,687
Accrued investment income		10,993			9,351			5,407			5,469			5,799
Premiums receivable		218,126			207,771			257,445			253,215			259,920
Reinsurance receivables		1,069,153			1,039,979			1,042,478			1,051,269			1,107,292
Prepaid reinsurance premiums		20,618			26,730			41,410			42,435			42,334
Deferred income taxes, net		102,986			100,019			97,565			101,696			103,284
Deferred acquisition costs		40,384			36,239			41,726			37,889			42,626
Funds held by reinsureds		133,222			130,214			132,926			102,519			104,715
Other assets		164,286			143,600			148,022			157,416			159,032
Total assets	$	2,753,456		$	2,666,407		$	2,728,005		$	2,678,987		$	2,714,430
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,690,483		$	1,634,865		$	1,620,952		$	1,563,324		$	1,586,471
Unearned premiums		217,506			202,973			249,689			235,356			257,598
Debt		131,561			131,211			130,822			144,629			135,072
Accounts payable, accrued expenses
and other liabilities		208,854			191,540			195,228			214,240			225,783
Reinsurance funds held and balances payable		88,105			82,275			103,021			106,288			97,651
Dividends to policyholders		4,744			4,450			4,483			4,179			4,730
Total liabilities		2,341,253			2,247,314			2,304,195			2,268,016			2,307,305
Shareholders' Equity:
Class A Common Stock		171,090			171,090			171,090			171,090			171,090
Additional paid-in capital		111,116			109,922			110,527			110,318			110,687
Retained earnings		181,719			184,216			183,611			183,019			174,190
Accumulated other comprehensive loss		(26,010	)		(20,624	)		(15,675	)		(23,569	)		(16,673	)
Treasury stock, at cost		(25,712	)		(25,511	)		(25,743	)		(29,887	)		(32,169	)
Total shareholders' equity		412,203			419,093			423,810			410,971			407,125
Total liabilities and shareholders' equity	$	2,753,456		$	2,666,407		$	2,728,005		$	2,678,987		$	2,714,430

7

PMA Capital Corporation
Selected Balance Sheet Items - Midwest
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2006			2006			2007			2007			2007
Assets
Premiums receivable	$	249		$	15,255		$	25,810		$	28,418		$	31,136
Reinsurance receivables		88			1,812			6,200			13,035			21,799
Prepaid reinsurance premiums		1,955			12,105			23,724			27,307			26,188
Deferred acquisition costs		-			-			-			140			231
Other assets		-			60			561			3,108			3,375
Liabilities
Unpaid losses and loss adjustment expenses	$	88		$	1,812		$	6,200		$	13,064		$	21,855
Unearned premiums		1,955			12,105			23,724			27,897			27,338
Reinsurance funds held and balances payable		-			13,513			22,209			23,224			24,652
Other liabilities		237			1,639			3,730			6,890			7,435
PMA Capital Corporation
Rollforward of Deferred Policy Acquisition Costs - PMA Insurance Group
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2006			2006			2007			2007			2007
Balance Sheet
Balance, beginning of period	$	37,336		$	40,384		$	36,239		$	41,726		$	37,889
Policy acquisition costs deferred		22,146			13,341			24,266			14,922			22,919
Amortization of policy acquisition costs		(19,098	)		(17,486	)		(18,779	)		(18,759	)		(18,182	)
Net change		3,048			(4,145	)		5,487			(3,837	)		4,737
Balance, end of period		40,384			36,239			41,726			37,889			42,626
PMA Capital Corporation
Balance Sheet Impact of Commutations - Run-off Operations
(Dollar Amounts in Thousands)
	3rd Quarter 2007						Nine Months 2007
Assets	Assumed						Assumed
Funds held by reinsureds	$	-					$	(32,813	)
Liabilities
Unpaid losses and loss adjustment expenses	$	(260	)				$	(28,503	)
Other liabilities		(109	)					(7,695	)

8

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2006			2006			2007			2007			2007			2007			2006
Total Investments & Cash
As reported	$	993,688		$	972,504		$	961,026		$	927,079		$	889,428		$	889,428		$	993,688
Less:
Unrealized loss		(9,490	)		(9,291	)		(1,668	)		(14,121	)		(3,289	)		(3,289	)		(9,490	)
Unrealized loss and accrued income - trading		-			-			(5,858	)		(5,282	)		(1,007	)		(1,007	)		-
Total adjusted investments & cash	$	1,003,178		$	981,795		$	968,552		$	946,482		$	893,724		$	893,724		$	1,003,178
Net Investment Income
As reported	$	10,747		$	10,333		$	10,525		$	11,125		$	10,670		$	32,320		$	33,205
Funds held:
Assumed		185			160			246			212			251			709			1,057
Ceded		(1,482	)		(1,374	)		(1,560	)		(931	)		(912	)		(3,403	)		(4,644	)
Total funds held		(1,297	)		(1,214	)		(1,314	)		(719	)		(661	)		(2,694	)		(3,587	)
Total adjusted investment income	$	12,044		$	11,547		$	11,839		$	11,844		$	11,331		$	35,014		$	36,792
Yield
As reported		4.28	%		4.20	%		4.35	%		4.71	%		4.70	%		4.60	%		4.19	%
Investment portfolio		4.72	%		4.65	%		4.86	%		4.95	%		4.93	%		4.93	%		4.59	%
Duration (in years)		3.4			3.3			3.3			3.7			3.7			3.7			3.4
PMA Capital Corporation
Debt
(Dollar Amounts in Thousands)
				Amount
				Outstanding			Maturity
6.50% convertible debt				$	4,584		20221
Derivative component of 6.50% convertible debt					762
4.25% convertible debt					455		20222
8.50% senior notes					54,900		2018
Junior subordinated debt 3					64,435		2033 - 2037
Surplus notes 4					10,000		2035
Unamortized debt discount					(64	)
Total long-term debt				$	135,072

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.
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. 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 9.45% as of September 30, 2007.
4	Interest rate on surplus notes is 9.86% as of September 30, 2007.

9

PMA Capital Corporation
Statements of Operations - Consolidating
Nine Months Ended September 30, 2007
(Dollar Amounts in Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	429,729	$	(471	)	$	5,104		$	434,362
Net Premiums Written	$	323,980	$	(471	)	$	4,705		$	328,214
Revenues:
Net premiums earned	$	285,097	$	(471	)	$	2,815		$	287,441
Net investment income		28,984		(175	)		3,511			32,320
Other revenues		22,878		172			-			23,050
Operating revenues		336,959		(474	)		6,326			342,811
Losses and Expenses:
Losses and loss adjustment expenses		197,047		-			23,739			220,786
Acquisition expenses		55,720		-			652			56,372
Operating expenses		45,078		6,834			5,396			57,308
Dividends to policyholders		5,874		-			-			5,874
Total losses and expenses		303,719		6,834			29,787			340,340
Operating income (loss) before income taxes
and interest expense		33,240		(7,308	)		(23,461	)		2,471
Interest expense		754		7,980			-			8,734
Pre-tax operating income (loss)	$	32,486	$	(15,288	)	$	(23,461	)		(6,263	)
Net realized investment losses										(1,247	)
Pre-tax loss									$	(7,510	)

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

10

PMA Capital Corporation
Statements of Operations - Consolidating
Nine Months Ended September 30, 2006
(Dollar Amounts 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

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

11

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended September 30, 2007
(Dollar Amounts in Thousands)
	PMA
	Insurance		Corporate			Run-off
	Group		& Other1			Operations			Consolidated
Gross Premiums Written	$	149,591	$	(155	)	$	1,603		$	151,039
Net Premiums Written	$	116,271	$	(155	)	$	1,216		$	117,332
Revenues:
Net premiums earned	$	93,928	$	(155	)	$	1,105		$	94,878
Net investment income		9,569		47			1,054			10,670
Other revenues		7,616		33			-			7,649
Operating revenues		111,113		(75	)		2,159			113,197
Losses and Expenses:
Losses and loss adjustment expenses		63,163		-			22,447			85,610
Acquisition expenses		18,182		-			39			18,221
Operating expenses		14,946		1,954			1,689			18,589
Dividends to policyholders		2,205		-			-			2,205
Total losses and expenses		98,496		1,954			24,175			124,625
Operating income (loss) before income taxes
and interest expense		12,617		(2,029	)		(22,016	)		(11,428	)
Interest expense		254		2,821			-			3,075
Pre-tax operating income (loss)	$	12,363	$	(4,850	)	$	(22,016	)		(14,503	)
Net realized investment gains										937
Pre-tax loss									$	(13,566	)

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

12

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended September 30, 2006
(Dollar Amounts 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

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

13

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
	3rd Quarter 2006		4th Quarter 2006		1st Quarter 2007		2nd Quarter 2007		3rd Quarter 2007		Nine Months 2007		Nine Months 2006		% Change 3rd Quarter			% Change Nine Months
Gross Premiums Written	$	133,903	$	89,484	$	164,720	$	115,418	$	149,591	$	429,729	$	366,968		11.7	%		17.1	%
Net Premiums Written	$	107,795	$	66,873	$	125,893	$	81,816	$	116,271	$	323,980	$	306,824		7.9	%		5.6	%
Revenues:
Net premiums earned	$	94,696	$	87,379	$	93,995	$	97,174	$	93,928	$	285,097	$	280,720		-0.8	%		1.6	%
Net investment income		8,998		9,190		9,704		9,711		9,569		28,984		26,310		6.3	%		10.2	%
Other revenues		6,573		7,065		7,680		7,582		7,616		22,878		20,812		15.9	%		9.9	%
Total revenues		110,267		103,634		111,379		114,467		111,113		336,959		327,842		0.8	%		2.8	%
Losses and Expenses:
Losses and loss adjustment expenses		68,255		61,841		65,919		67,965		63,163		197,047		200,456		-7.5	%		-1.7	%
Acquisition expenses		19,098		17,486		18,779		18,759		18,182		55,720		56,240		-4.8	%		-0.9	%
Operating expenses		13,720		17,821		13,087		17,045		14,946		45,078		44,238		8.9	%		1.9	%
Dividends to policyholders		589		510		1,622		2,047		2,205		5,874		3,022	NM				94.4	%
Total losses and expenses		101,662		97,658		99,407		105,816		98,496		303,719		303,956		-3.1	%		-0.1	%
Operating income before income taxes
and interest expense		8,605		5,976		11,972		8,651		12,617		33,240		23,886		46.6	%		39.2	%
Interest expense		254		255		249		251		254		754		723		0.0	%		4.3	%
Pre-tax operating income	$	8,351	$	5,721	$	11,723	$	8,400	$	12,363	$	32,486	$	23,163		48.0	%		40.2	%

14

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
		2006		2006		2007	2007	2007	2007	2006		Better (Worse)	Better (Worse)
Ratios - GAAP Basis:
Loss and LAE ratio		72.1%		70.8%		70.1%	69.9%	67.2%	69.1%	71.4%		4.9	2.3
Expense ratio:
	Acquisition expenses	20.2%		20.0%		20.0%	19.3%	19.4%	19.5%	20.0%		0.8	0.5
	Operating expenses  1	8.1%	2	12.9%	2	6.4%	10.3%	8.4%	8.3%	8.9%	2	(0.3)	0.6
	Total expense ratio	28.3%		32.9%		26.4%	29.6%	27.8%	27.8%	28.9%		0.5	1.1
Policyholders' dividend ratio		0.6%		0.6%		1.7%	2.1%	2.3%	2.1%	1.1%		(1.7)	(1.0)
Combined ratio		101.0%	2	104.3%	2	98.2%	101.6%	97.3%	99.0%	101.4%	2	3.7	2.4
Net investment income ratio		-9.5%		-10.5%		-10.3%	-10.0%	-10.2%	-10.2%	-9.4%		0.7	0.8
Operating ratio		91.5%		93.8%		87.9%	91.6%	87.1%	88.8%	92.0%		4.4	3.2
1 The operating expense ratio equals insurance-related operating expenses divided by net premiums earned.  Insurance-related operating expenses were $7.7 million, $11.3 million, $6.0 million, $9.9 million and $7.8 million for the third and fourth quarters of 2006 and the first, second and third quarters of 2007, respectively.
2 Certain reclassifications between insurance-related and non-insurance related expenses of prior period amounts have been made to conform to the current year presentation.  These reclassifications had no impact on the previously reported full year 2006 ratios.

15

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
	2006			2006			2007			2007			2007			2007			2006			Quarter			Months
Gross Premiums Written	$	526		$	102		$	1,507		$	1,994		$	1,603		$	5,104		$	1,884		NM			NM
Net Premiums Written	$	701		$	309		$	1,495		$	1,994		$	1,216		$	4,705		$	1,834			73.5	%	NM
Revenues:
Net premiums earned	$	746		$	1,094		$	1,193		$	517		$	1,105		$	2,815		$	1,684			48.1	%		67.2	%
Net investment income		1,695			1,392			1,000			1,457			1,054			3,511			7,304			-37.8	%		-51.9	%
Total revenues		2,441			2,486			2,193			1,974			2,159			6,326			8,988			-11.6	%		-29.6	%
Losses and Expenses:
Losses and loss adjustment expenses		(1,501	)		(1,146	)		1,107			185			22,447			23,739			(1,930	)	NM			NM
Acquisition expenses		713			339			359			254			39			652			448			-94.5	%		45.5	%
Operating expenses		3,055			2,808			1,465			2,242			1,689			5,396			9,707			-44.7	%		-44.4	%
Total losses and expenses		2,267			2,001			2,931			2,681			24,175			29,787			8,225		NM			NM
Pre-tax operating income (loss)	$	174		$	485		$	(738	)	$	(707	)	$	(22,016	)	$	(23,461	)	$	763		NM			NM

16

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
	2006			2006			2007			2007			2007			2007			2006			Quarter			Months
Gross Premiums Written	$	(158	)	$	(157	)	$	(156	)	$	(160	)	$	(155	)	$	(471	)	$	(539	)		1.9	%		12.6	%
Net Premiums Written	$	(158	)	$	(157	)	$	(156	)	$	(160	)	$	(155	)	$	(471	)	$	(539	)		1.9	%		12.6	%
Revenues:
Net premiums earned	$	(158	)	$	(157	)	$	(156	)	$	(160	)	$	(155	)	$	(471	)	$	(539	)		1.9	%		12.6	%
Net investment income		54			(249	)		(179	)		(43	)		47			(175	)		(409	)		-13.0	%		57.2	%
Other revenues		51			42			107			32			33			172			202			-35.3	%		-14.9	%
Total revenues		(53	)		(364	)		(228	)		(171	)		(75	)		(474	)		(746	)		-41.5	%		36.5	%
Losses and Expenses:
Operating expenses		2,178			2,337			2,514			2,366			1,954			6,834			6,575			-10.3	%		3.9	%
Total losses and expenses		2,178			2,337			2,514			2,366			1,954			6,834			6,575			-10.3	%		3.9	%
Operating loss before income taxes
and interest expense		(2,231	)		(2,701	)		(2,742	)		(2,537	)		(2,029	)		(7,308	)		(7,321	)		9.1	%		0.2	%
Interest expense		2,785			2,581			2,567			2,592			2,821			7,980			9,962			1.3	%		-19.9	%
Pre-tax operating loss	$	(5,016	)	$	(5,282	)	$	(5,309	)	$	(5,129	)	$	(4,850	)	$	(15,288	)	$	(17,283	)		3.3	%		11.5	%

17

PMA Capital Corporation
Operating Cash Flows - Consolidated
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2006			2006			2007			2007			2007			2007			2006
Receipts:
Premiums and other revenues collected	$	108,027		$	93,253		$	102,505		$	96,874		$	107,896		$	307,275		$	309,670
Investment income received		11,795			13,730			13,251			12,472			11,101			36,824			42,053
Total receipts		119,822			106,983			115,756			109,346			118,997			344,099			351,723
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		17,034			22,696			4,605			15,005			20,704			40,314			37,867
Losses and LAE paid - prior years		65,455			90,825			85,995			90,855			77,324			254,174			250,056
Total losses and LAE paid		82,489			113,521			90,600			105,860			98,028			294,488			287,923
Insurance operating expenses paid		26,899			30,327			38,826			31,657			35,273			105,756			112,720
Policyholders' dividends paid		451			812			499			1,878			690			3,067			1,094
Interest on corporate debt		3,470			2,461			3,082			2,446			2,888			8,416			11,226
Total disbursements		113,309			147,121			133,007			141,841			136,879			411,727			412,963
Net other		(9,204	)		19,380			1,024			(2,788	)		(5,256	)		(7,020	)		(14,166	)
Net operating cash flows	$	(2,691	)	$	(20,758	)	$	(16,227	)	$	(35,283	)	$	(23,138	)	$	(74,648	)	$	(75,406	)

18

PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(Dollar Amounts in Thousands)
	3rd			4th		1st			2nd			3rd			Nine			Nine
	Quarter			Quarter		Quarter			Quarter			Quarter			Months			Months
	2006			2006		2007			2007			2007			2007			2006
Receipts:
Premiums and other revenues collected	$	107,102		$	92,720	$	99,923		$	94,993		$	107,297		$	302,213		$	301,162
Investment income received		8,831			10,564		10,504			10,605			9,981			31,090			29,908
Total receipts		115,933			103,284		110,427			105,598			117,278			333,303			331,070
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		17,034			22,696		4,605			15,005			20,704			40,314			37,867
Losses and LAE paid - prior years		45,463			44,787		62,815			51,295			61,340			175,450			168,113
Total losses and LAE paid		62,497			67,483		67,420			66,300			82,044			215,764			205,980
Insurance operating expenses paid		24,446			26,521		35,766			30,727			32,168			98,661			101,685
Policyholders' dividends paid		451			812		499			1,878			690			3,067			1,094
Interest on corporate debt		246			255		252			244			252			748			697
Total disbursements		87,640			95,071		103,937			99,149			115,154			318,240			309,456
Net other		(1,939	)		4,615		(4,189	)		(8,297	)		(6,707	)		(19,193	)		(6,360	)
Net operating cash flows	$	26,354		$	12,828	$	2,301		$	(1,848	)	$	(4,583	)	$	(4,130	)	$	15,254

19

PMA Capital Corporation
Operating Cash Flows - Run-off Operations
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2006			2006			2007			2007			2007			2007			2006
Receipts:
Premiums collected	$	925		$	533		$	2,582		$	1,881		$	599		$	5,062		$	8,508
Investment income received		2,964			3,166			2,747			1,867			1,120			5,734			12,145
Total receipts		3,889			3,699			5,329			3,748			1,719			10,796			20,653
Disbursements:
Losses and LAE paid:
Losses and LAE paid - prior years		19,992			46,038			23,180			39,560			15,984			78,724			81,943
Total losses and LAE paid		19,992			46,038			23,180			39,560			15,984			78,724			81,943
Insurance operating expenses paid		2,453			3,806			3,060			930			3,105			7,095			11,035
Total disbursements		22,445			49,844			26,240			40,490			19,089			85,819			92,978
Net other		(5,500	)		8,071			(1,382	)		1,210			(804	)		(976	)		(2,642	)
Net operating cash flows	$	(24,056	)	$	(38,074	)	$	(22,293	)	$	(35,532	)	$	(18,174	)	$	(75,999	)	$	(74,967	)

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PMA Capital Corporation
Statutory Surplus
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2006			2006			2007			2007			20071
PMA Pool 2	$	325,242		$	321,245		$	327,379		$	333,118		$	339,800	4
PMA Capital Insurance Company 3		123,428			121,566			117,098			75,585	5	58,040		4,5
PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(Dollar Amounts in Thousands)
	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2006			2006			2007			2007			20071			20071			2006
Net Premiums Written:
Workers' Compensation	$	95,437		$	58,731		$	113,732		$	75,976		$	98,459		$	288,167		$	272,135
Other Commercial Lines		6,067			4,637			10,258			7,359			9,900			27,517			23,802
Total - PMA Pool	$	101,504		$	63,368		$	123,990		$	83,335		$	108,359		$	315,684		$	295,937
Statutory Ratios:
Loss and LAE ratio		72.1	%		71.3	%		71.2	%		70.3	%		68.0	%		69.8	%		72.0	%
Underwriting expense ratio		26.3	%		37.5	%		21.1	%		30.2	%		25.9	%		25.2	%		27.2	%
Policyholders' dividend ratio		0.5	%		0.6	%		0.6	%		1.7	%		1.4	%		1.2	%		0.5	%
Combined ratio		98.9	%		109.4	%		92.9	%		102.2	%		95.3	%		96.2	%		99.7	%
Operating ratio		90.5	%		99.8	%		83.3	%		92.4	%		85.7	%		86.5	%		91.3	%

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 (deficit) of $157.5 million and ($24.5) million for the PMA Pool and PMA Capital Insurance Company, respectively.
5	In April 2007, PMA Capital Insurance Company paid an extraordinary dividend in the amount of $37.5 million to its parent, PMA Capital Corporation.

21

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		610.397.5083
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 10/31/2007):
	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.

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