ex99-1.htm

Exhibit 99.1

Keefe, Bruyette & Woods, Inc.

Investor Conference

September 3-4, 2008

Forward-looking
statements

q This presentation and our discussion contain
forward-looking information and statements
including, but not limited to, such matters as
business strategies, market trends, future
financial performance, and other matters which
inherently involve risks and uncertainties which
could cause actual results to differ from those
projected or implied in the forward-looking
statements. Please refer to the Company’s SEC
filings including its most recent Annual Report on
Form 10-K for risk factors which could cause
actual performance to differ from these forward-
looking statements.

Who We Are

Two Ongoing Operating Segments

The PMA Insurance Group

q Solid presence in workers’ compensation market

q Disciplined underwriting standards

q Superior long-term client relationships

q Statutory capital of $352 million

Fee-based Business

q Includes combined operating results of PMA
Management Corp. and Midlands Management
Corporation

q Acquisition of Midlands in October 2007 provides
expanded fee-based services and customer base

q In June 2008, acquired a workers’ compensation TPA
in Connecticut, a market we previously had little
penetration

Run-Off Operations- Sale agreement executed
in 2008, pending state approval

____________________

* Based on direct premiums written, excludes fronting premiums.

36%

10%

12%

PMA has 50 state writing and servicing capabilities

Highlights

q 2008 Focus:

§ Profitable, measured growth at Primary
Insurance Operations

§ High client retention and expansion of Fee-
based business opportunities, as demonstrated
by high rate of organic growth and June 2008
acquisition

§ Assist with regulatory review process in order
to obtain approval to close the sale of the Run-
off Operations

($ millions, except per share)	2008	2007
Direct premiums written	$239.5	$271.7
Net premiums earned	188.5	190.9
Fee-based revenues	31.8	15.2
Operating income from continuing operations	11.6	6.5
Loss from discontinued operations	(2.6)	(2.6)
After Tax Capital Gains (Losses)	1.9	(.1)
Net income	$10.9	$3.8
Earnings per share from continuing operations	$.42	$.19
Loss per share from discontinued operations	(.08)	(.07)
Earnings per share	$.34	$.12

Consolidated
Year to Date 6/30 Results

Consolidated
Six Month Results

q Improved underwriting results at The PMA
Insurance Group (combined ratio 97.2% vs.
99.9% in 2007)

q Pre-tax operating income increased by 33% at
The PMA Insurance Group, compared to first six
months of 2007

q Fee-based revenues increased $16.6 million to
$31.8 million due to acquisition of Midlands and
organic growth at PMA Management Corp.

The PMA Insurance Group

Business
Overview

q Specializes in workers’ compensation and
other commercial lines

q Focus on mid-size to large accounts

§ Commercial Markets

§ Risk Management Services

§ Specialty Markets

q Reputation for excellent customer service
and execution

* Excluding Fronting Premiums

Diversified Distribution Channels

Premium Profile by Source*

FY 2007

Q2 2008

* Excluding Fronting Premiums

Source: AM Best

q Disciplined underwriting -> Consistent operating
returns

q The PMA Insurance Group - Workers’ Compensation
Estimated Undiscounted Accident Year Net Loss and
LAE Ratio (2003 adjusted for retro premium)

Maintain competitive advantage
in workers’ compensation line

q Long-term strategy of Insurance Group is to write
workers compensation business at a combined ratio of
100% through underwriting cycle.

q June year to date 2008 combined ratio of 97.2%, 2007 full
year combined ratio was 99.7%

q Measured steps to improve expense ratio, while
maintaining service levels to customer-

q Expense target is currently to maintain controllable
expense growth less than half the rate of direct premium
growth

q Claims Strategic Alliances assist in managing loss costs

§ Medical networks

§ Bill review

§ Catastrophic claims

Managing the Loss
and LAE Ratio

q Pricing changes, coupled with payroll inflation for
rate sensitive workers’ compensation business
were below overall estimated loss trends

q Diversification among classes of business insured

q Loss containment protection in loss sensitive
business (about 40-45% of our business) reduce
risk to Company

q Outcome focused claims philosophy

§ Full integration of nurse professionals in claims process

§ In-house counsel in select jurisdictions

Managing the Loss
and LAE Ratio

q Strategic alliances:

§ Coventry: preferred provider network; out of network
bill review

§ QualCare: preferred provider network in NJ

§ MedRisk: physical therapy provider

§ Corporate Systems: detailed medical bill review

§ TMESYS: retail pharmacy program

§ Paradigm: catastrophic claim management

§ Computer Sciences Corporation: legal bill review

Fronting Arrangements

q PMA earns an administrative fee - spread
between ceding commissions and direct
commissions - reduced the acquisition expense
ratios by 90 basis points in 2008 and 60 basis
points for the same period in 2007

q New arrangements effective in 3Q 2008 with
Appalachian Underwriters, Inc (predominantly in
south/southeast) and Arrowhead General
Insurance Agency (California). PMA Management
Corp. will also derive fees from claims work on
the Appalachian arrangement

Fee-based Business

q In fourth quarter of 2007, began reporting Fee-based
Business results in a separate operating segment

q PMA Management Corp.

§ Third-Party Administrator (TPA) producing fee-based revenues

§ Focus on workers’ compensation & risk management services

§ Business shares IT infrastructure with PMA Insurance Group

q Midlands Management Corporation

§ Acquired October 1, 2007

§ Oklahoma City-based managing general agent (MGA), program
administrator and provider of TPA services

§ Little overlap with PMA Management Corp.

§ In June 2008, we acquired Webster Risk Services, which
will operate as PMA Management Corp. of New England

§ Revenues and margins from our fee-based businesses are
less volatile than insurance underwriting

PMA Management
Corp.

q Broad service capabilities:

§ Claims administration/TPA

§ Managed care

§ Disability management

§ Risk control

q Solid portfolio of managed care strategic alliances that
leverage combined purchasing power with insurance
operations

q Three-year business retention of over 90%

q Revenue CAGR of over 16% since 2001 - continue to see
organic growth opportunities

Midlands Management
Corporation

q Acquired October 1, 2007- Initial cash paid of $19.8 million

§ Ultimate price, which is based on EBITDA growth levels
over next four years, could range from $22.8 million
(6.9x EBITDA) to $44.5 million (4.8x EBITDA)

q Overview of Midlands

§ Very strong name recognition and brand equity

§ TPA specializes in casualty claims adjusting

§ Managing general agency places excess workers’
compensation

§ Revenues in 2007 of $28 million

§ Will continue to operate in current markets with existing
management and will maintain its brand identity and
strong service culture

PMA Management Corp.
of New England

q Connecticut-based TPA, formerly Webster Risk Services

q Purchased price of $7.3 million, closing adjustments reduced
cash transferred to $5.9 million

q Specializes in providing workers’ compensation and risk
management services to health care systems and public
entities

q Very little geographical overlap - expect to grow current New
England revenue base of $6 million

q On an annual basis, expected to add 2 cents to earnings-
excludes any potential cross-selling

Holding Company Review

$ millions	6/30/08	12/31/07

Shareholders' Equity (Including SFAS #115)	$380.6	$378.6

Shareholders' Equity (Excluding SFAS #115)	$387.8	$374.6

Debt	$129.8	$131.3

Debt to Capital (Including SFAS #115)	25%	26%

Capitalization

$ millions		6/30/08

Trust Preferred and Surplus Notes, Mature 2033-37		$ 74.4
Monthly Notes, Matures 2018		54.9
Other		.5
Total		$ 129.8

Debt Structure

Invested Assets

Total = $801 million

(excludes cash)

June 30, 2008

Asset Type

n Conservative
investment posture

n No wrapped ABS CDO
exposures

n No derivatives

n No equity exposure

n Pre-tax net unrealized
loss of $11 million at
June 30, 2008

n Outside professional
manager

High-Quality, Liquid
Investment Portfolio

Total = $741 million

(excludes short-term investments and cash)

June 30, 2008

Asset Quality

n AAA- average credit
quality

n 72% AAA Rated or
Government bonds

n 2% held in Alternative A/
Subprime loans - average
credit quality of AAA with
no OTTI

n 2% held in credit-
enhanced securities with
average credit quality of
A+ and imputed credit
quality of A

n Portfolio duration - 3.8
years

n Current portfolio book
yield - 5.0%

High-Quality, Liquid
Investment Portfolio

1 Fee-based Business book value increased $0.23 as a result of the acquisition of
PMA Management Corp. of New England. The purchase price was funded by the
Holding Company.

PMA Capital
Book Value

q 2008 results through June detail execution of our business
plan:

§ Measured revenue growth at The PMA Insurance Group

§ Diligent expense management

§ Continued expansion of fee-based service platform

q Expecting profitable growth in workers’ compensation in
2008

q Execution of 2008 plan should result in continued
improvement in profitability of operations

q Expect a return on equity of between 5.5% and 6.5% on
our ongoing businesses in 2008

q June 30, 2008 book value of $11.92 per share, compared
to a current stock price (August 26) of $9.50