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) April 29, 2010

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 April 29, 2010, PMA Capital Corporation (the “Registrant”) issued a news release regarding its First Quarter 2010 results, a copy of which is furnished as Exhibit 99.1 hereto.  Additionally, the Registrant’s First Quarter 2010 Statistical Supplement is furnished as Exhibit 99.2.

The information, including Exhibits 99.1 and 99.2 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 furnished under this Item 2.02 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 April 29, 2010
Exhibit 99.2	PMA Capital Corporation First Quarter 2010 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 hereunto duly authorized.

	PMA Capital Corporation
April 29, 2010	By:	/s/ John M. Cochrane
	Name:		John M. Cochrane
	Title:		Senior Vice President and Interim Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 99.1	PMA Capital Corporation News Release, dated April 29, 2010
Exhibit 99.2	PMA Capital Corporation First Quarter 2010 Statistical Supplement

EX-99.1

Exhibit 99.1

For Immediate Release	Contact:	John M. Cochrane
		(610) 397-5298
		john_cochrane@pmagroup.com

PMA Capital Reports First Quarter 2010 Results

Blue Bell, PA, April 29, 2010 -- PMA Capital Corporation (NASDAQ: PMACA) today reported the following financial results for the first quarter of 2010:

	Three months ended
	March 31,
(in thousands, except per share data)	2010		2009
Operating income	$	7,817	$	7,816
Net realized investment gains after tax		277		487
Income from continuing operations		8,094		8,303
Loss from discontinued operations after tax		-		(86	)
Net income	$	8,094	$	8,217
Diluted per share amounts:
Operating income	$	0.24	$	0.24
Realized gains after tax		0.01		0.02
Income from continuing operations		0.25		0.26
Loss from discontinued operations after tax		-		-
Net income	$	0.25	$	0.26

Vincent T. Donnelly, President and Chief Executive Officer, commented, “Despite very competitive marketplace conditions and continued challenges in the economy and labor markets, I am pleased to report a positive start to 2010.  We continued to successfully execute our strategy of increasing the proportion of loss-sensitive workers’ compensation business, which was the primary driver of our 7% increase in direct premium production, and achieved a combined ratio of 95%.  Our Fee-based Business, which now represents 16% of our consolidated revenues, had a solid quarter with continued revenue and operating income growth.  Our book value increased for the fifth consecutive quarter to $12.96 per share due primarily to our earnings combined with improved values in our investment portfolio.”

At The PMA Insurance Group, Mr. Donnelly noted the following operating highlights:

·   Pre-tax operating income was $14.3 million, compared to $15.2 million in the first quarter of 2009;

·   The combined ratio was 95.0%, compared to 93.5% for the first quarter last year;

·   Pricing on our rate-sensitive workers’ compensation business increased 2%, compared to a decline of 4% in the first quarter of 2009; and

·   Direct premiums written increased 5% due to increased premium production which was partially offset by a decrease in fronting premiums.

Fee-based Business operating highlights included:

·   Our Fee-based Business revenues increased 9% to $21.5 million, compared to the first quarter of 2009;

·   Claims service revenues grew 12% in the quarter to $17.9 million; and

·  Pre-tax operating income increased to $2.3 million in the quarter, compared to $2.0 million for the same period last year.

Financial Condition

Total assets were $2.4 billion as of March 31, 2010 and December 31, 2009.  At March 31, 2010, we had $25.6 million in cash and short-term investments at our holding company and non-regulated subsidiaries.

Shareholders’ equity and book value per share changed as follows:

	Three months ended
	March 31, 2010
(in thousands, except per share data)	Shareholders' equity		Book value per share
Balance, beginning of period	$	401,797	$	12.46
Net income		8,094		0.25
Unrealized gain on securities, net of tax		7,989		0.25
Other		250		-
Balance, end of period	$	418,130	$	12.96

Segment Operating Results

Operating income, which we define as net income under accounting principles generally accepted in the United States (GAAP) excluding net realized investment gains and results from discontinued operations, is the financial performance measure used by our management and Board of Directors to evaluate and assess the results of our businesses.  Net realized investment activity is excluded 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 does not replace net income as the GAAP measure of our consolidated results of operations.

2

The following is a reconciliation of our operating results to GAAP net income:

	Three months ended
	March 31,
(dollar amounts in thousands)	2010			2009
Pre-tax operating income (loss):
The PMA Insurance Group	$	14,267		$	15,187
Fee-based Business		2,305			2,013
Corporate & Other		(4,366	)		(5,000	)
Pre-tax operating income		12,206			12,200
Income tax expense		4,389			4,384
Operating income		7,817			7,816
Net realized investment gains after tax		277			487
Income from continuing operations		8,094			8,303
Loss from discontinued operations after tax		-			(86	)
Net income	$	8,094		$	8,217

Income from continuing operations included the following after-tax net realized investment gains:

	Three months ended
	March 31,
(dollar amounts in thousands)	2010		2009
Net realized investment gains after tax:
Sales of investments	$	277	$	3,028
Other than temporary impairments		-		(2,541	)
Net realized investment gains after tax	$	277	$	487

Details of the Company’s investment portfolio at March 31, 2010 and December 31, 2009 are posted on our website at www.pmacapital.com.

The PMA Insurance Group

The PMA Insurance Group had pre-tax operating income of $14.3 million for the first quarter of 2010, compared to $15.2 million for the first quarter of 2009.

We define direct premium production as direct premiums written, excluding fronting premiums and premium adjustments.  The following is a reconciliation of our direct premium production to consolidated gross premiums written:

	Three months ended
	March 31,
(dollar amounts in thousands)	2010			2009
Direct premium production	$	157,092		$	147,367
Fronting premiums		15,795			19,622
Premium adjustments		(2,019	)		(4,876	)
Direct premiums written		170,868			162,113
Assumed premiums and other		1,037			1,957
Gross premiums written	$	171,905		$	164,070

3

Direct premium production included new business of $34.5 million in the first quarter of 2010, compared to $38.0 million during the same period last year.  Pricing on our rate-sensitive workers’ compensation business increased 2% during the first three months of 2010, compared to a 4% decrease during the first three months of 2009.  Our renewal retention rate on existing workers’ compensation accounts for the first quarter improved to 83% in 2010, compared to 79% in 2009.  During 2010, our retention rates and new business for workers’ compensation were higher for business written on a loss-sensitive basis than for business written on a rate-sensitive basis, as we continue to emphasize loss-sensitive business.  The increase in the retention rate in 2010 also reflected a higher retention rate on large account business.

Net premiums written increased to $128.4 million in the first quarter of 2010, compared to $118.1 million for the same quarter last year.  The increase for the quarter primarily reflected the increase in direct premium production for the period.

The combined ratio on a GAAP basis was 95.0% for the first quarter of 2010, compared to 93.5% in the first quarter last year.  The higher combined ratio in the first quarter of 2010 was primarily the result of an increase in the expense ratio, which reflected higher state based assessments.  Given the seasonality of our business, our first quarter combined ratios have historically been lower than the subsequent quarters and full year ratios.

The loss and LAE ratio in the first quarter of 2010 was modestly higher than the prior year period.  Pricing increases coupled with payroll changes for rate-sensitive workers’ compensation business were slightly below overall estimated loss trends.  Losses and LAE in 2010 also included expenses incurred on a new claims system which has been implemented in both our insurance and fee-based businesses.  We estimated our medical cost inflation to be 6.0% in the first quarters of 2010 and 2009.

Net investment income was $9.2 million in the first quarter of 2010, compared to $8.5 million in the same period last year.  The increase was due primarily to an increase in average invested assets.

Fee-based Business

For the first quarter of 2010, total revenues at our Fee-based Business increased to $21.5 million from $19.7 million for the same period last year.  The increase in revenues primarily reflected claims service revenue growth of $1.9 million, or 12%, which was partially offset by a decrease in commission income of $316,000.  Commission income was impacted by the continued softness in the labor markets.  Pre-tax operating income increased to $2.3 million for the first quarter of 2010, compared to $2.0 million for the same quarter last year.

Corporate and Other

The Corporate and Other segment, which includes primarily corporate expenses and debt service, had net expenses of $4.4 million during the first quarter of 2010, compared to $5.0 million in the first quarter of 2009.  The decrease in net expenses for the first quarter of 2010 related primarily to lower stock-based compensation expense and certain 2009 intercompany transactions with our former run-off operations which were eliminated in the Corporate and Other segment.

4

Conference Call with Investors

As a reminder, the Company will hold a conference call with investors beginning at 8:30 a.m. Eastern Time on Friday, April 30th to review its first quarter 2010 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
888-713-4217 (Domestic)	888-286-8010 (Domestic)
617-213-4869 (International)	617-801-6888 (International)
Passcode 96118078	Passcode 52027414

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

www.theconferencingservice.com/prereg/key.process?key=P8PQBBEMM

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 call.  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 five 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 11:30 a.m. Eastern Time on Friday, April 30th until 11:59 p.m. Eastern Time on Monday, May 31st.

Quarterly Statistical Supplement

Our First Quarter Statistical Supplement, which provides more detailed information about our results, 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 Securities and Exchange Commission on a Form 8-K.  A copy of the Form 8-K will be available on the SEC’s website at www.sec.gov.

5

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

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 with respect to the Company’s financial condition and results of operations and the plans, strategy and objectives of its management.  Forward-looking statements can generally be identified by use of forward-looking terminology such as “may,” “will,” “plan,” “expect,” “intend,” “anticipate,” “should” and “believe.”  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.  All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.  The factors that could cause actual results to differ materially from those in the forward-looking statements, include, but are not limited to:

·   adequacy of reserves for claim liabilities, including reserves for potential environmental and asbestos claims;

·   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;

·   judicial, legislative and regulatory changes that affect the cost of, or demand for, our products or otherwise affect our ability to conduct business, including any action with respect to our industry or business taken by state insurance departments or the federal government;

·   regulatory actions by state insurance departments affecting the operation of our business or our financial condition, including actions relating to licensing, examinations, reserving, rate changes, investments, insurance policy terms and conditions and state based assessments;

·   adequacy and collectibility of reinsurance that we purchase;

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

·   the effects of emerging claims and coverage issues, including changing judicial interpretations of available coverage for certain insured losses;

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

·   uncertainties related to possible terrorist activities or international hostilities and whether the Terrorism Risk Insurance Program Reauthorization Act of 2007 is modified or extended beyond its December 31, 2014 termination date;

·   cyclical changes in the insurance industry;

·   the success with which our independent agents and brokers sell our products and our ability to collect payments from them;

·   our ability to effectively compete in the highly competitive property and casualty insurance industry;

·   our concentration in workers’ compensation insurance, which makes us particularly susceptible to adverse changes in that industry segment;

·   adverse economic or regulatory developments in the eastern part of the United States, particularly those affecting Pennsylvania, New York and New Jersey;

·   fluctuations in interest rates and other events that can adversely impact our investment portfolio;

·   disruptions in the financial markets that affect the value of our investment portfolio and our ability to sell our investments;

·   our ability to attract and retain qualified management personnel;

·   our ability to repay our indebtedness and meet our other contractual and financial obligations;

·   our ability to raise additional capital on financially favorable terms when required;

·   restrictions on our operations contained in any document governing future or existing indebtedness;

·   statutory requirements and rating agency expectations that limit our ability to receive dividends from our insurance subsidiaries;

·   the impact of future results on the value of recorded goodwill and other intangible assets and the recoverability of our deferred tax asset;

·   limitations on our ability to use our deferred tax assets in the event we experience an ownership change;

·   the outcome of any litigation against us;

·   provisions in our charter documents that can inhibit a change in control of our company; and

·   other risks or uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission and, in particular, our Annual Report on Form 10-K for the year ended December 31, 2009.

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 of this press release or to reflect the occurrence of unanticipated events.

6

PMA Capital Corporation

GAAP Consolidated Statements of Operations

(Unaudited)

	Three months ended March 31,
(dollar amounts in thousands, except per share data)	2010		2009
Gross premiums written	$	171,905	$	164,070
Net premiums written	$	128,245	$	117,978
Revenues:
Net premiums earned	$	103,496	$	104,930
Claims service revenues		17,883		15,684
Commission income		3,092		3,463
Net investment income		9,120		8,457
Net realized investment gains		426		749
Other revenues		392		176
Total revenues		134,409		133,459
Expenses:
Losses and loss adjustment expenses		75,070		75,775
Acquisition expenses		18,047		17,198
Operating expenses		25,632		24,385
Dividends to policyholders		524		646
Interest expense		2,504		2,506
Total losses and expenses		121,777		120,510
Pre-tax income		12,632		12,949
Income tax expense:
Current		254		244
Deferred		4,284		4,402
Total income tax expense		4,538		4,646
Income from continuing operations		8,094		8,303
Loss from discontinued operations after tax		-		(86	)
Net income	$	8,094	$	8,217
Income per share:
Basic:
Continuing Operations	$	0.25	$	0.26
Discontinued Operations		-		-
	$	0.25	$	0.26
Diluted:
Continuing Operations	$	0.25	$	0.26
Discontinued Operations		-		-
	$	0.25	$	0.26

7

PMA Capital Corporation

GAAP Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
(dollar amounts in thousands, except per share data)	2010			2009
Assets:
Investments:
Fixed maturities available for sale	$	800,612		$	791,355
Short-term investments		25,921			41,072
Other investments		31,205			30,226
Total investments		857,738			862,653
Cash		13,583			11,059
Accrued investment income		7,663			7,352
Premiums receivable		275,122			238,650
Reinsurance receivables		839,723			827,458
Prepaid reinsurance premiums		40,363			35,788
Deferred income taxes, net		131,097			139,782
Deferred acquisition costs		44,820			39,124
Funds held by reinsureds		61,573			58,935
Intangible assets		29,553			29,757
Other assets		108,476			112,181
Total assets	$	2,409,711		$	2,362,739
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,274,006		$	1,269,685
Unearned premiums		270,083			240,759
Debt		137,445			143,380
Accounts payable, accrued expenses
and other liabilities		238,493			249,787
Reinsurance funds held and balances payable		65,610			51,331
Dividends to policyholders		5,944			6,000
Total liabilities		1,991,581			1,960,942
Shareholders' Equity:
Class A Common Stock		171,090			171,090
Additional paid-in capital		111,906			111,841
Retained earnings		163,841			155,747
Accumulated other comprehensive loss		(5,886	)		(14,060	)
Treasury stock, at cost		(22,821	)		(22,821	)
Total shareholders' equity		418,130			401,797
Total liabilities and shareholders' equity	$	2,409,711		$	2,362,739
Shareholders' equity per share	$	12.96		$	12.46

 8

EX-99.2

Exhibit 99.2

PMA Capital Corporation

Statistical Supplement

First Quarter - 2010

Table of Contents
		Page
Consolidated Highlights:
Selected Financial Data			1
Consolidated Statements of Operations - Per Share Data			2
Consolidated Statements of Operations			3
Consolidated Balance Sheets			4
Selected Balance Sheet Items - Fronting Arrangements; Rollforward of Deferred Policy
Acquisition Costs - PMA Insurance Group; Assets and Liabilities of Discontinued Operations			5
Invested Assets and Net Investment Income; Debt			6
Segment Information:
Statements of Operations - Consolidating		7 - 8
Statements of Operations - PMA Insurance Group			9
Insurance Ratios - PMA Insurance Group			10
Components of Direct Premiums Written - PMA Insurance Group			11
Statements of Operations - Fee-based Business			12
Statements of Operations - Corporate & Other			13
Statements of Operations - Discontinued Operations			14
Operating Cash Flow Information:
Operating Cash Flows - Consolidated			15
Operating Cash Flows - PMA Insurance Group			16
Operating Cash Flows - Fee-based Business			17
Statutory Financial Information:
Statutory Surplus; Statutory Financial Information - PMA Pool			18
Other Information:
Industry Ratings and Market Information			19
Legend:
NM - Not Meaningful
	Operating income, which we define as GAAP net income excluding net realized investment gains and losses and the results from discontinued operations, is the financial performance measure used by our management and Board of Directors to evaluate and assess the results of our businesses.  Net realized investment activity is excluded 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 does not replace net income as the GAAP measure o f our consolidated results of operations.  See page 1 for reconciliations of operating results by segment to GAAP net income.

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
	1st			2nd			3rd			4th			1st			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			1st
	2009			2009			2009			2009			2010			Quarter
Direct Premiums Written	$	161,965		$	108,994		$	161,965		$	118,272		$	170,730			5.4	%
Net Premiums Written	$	117,978		$	80,302		$	119,259		$	84,366		$	128,245			8.7	%
Revenues:
Net premiums earned	$	104,930		$	106,949		$	102,428		$	100,464		$	103,496			-1.4	%
Claims service revenues		15,684			16,835			17,112			17,998			17,883			14.0	%
Commission income		3,463			2,117			2,747			2,515			3,092			-10.7	%
Net investment income		8,457			9,561			9,522			9,336			9,120			7.8	%
Net realized investment gains (losses)		749			(472	)		795			(558	)		426			-43.1	%
Other revenues		176			190			259			458			392		NM
Total revenues	$	133,459		$	135,180		$	132,863		$	130,213		$	134,409			0.7	%
Major Components of Net Income:
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	15,187		$	9,965		$	13,616		$	4,282		$	14,267			-6.1	%
Fee-based Business		2,013			1,525			1,574			2,096			2,305			14.5	%
Corporate & Other		(5,000	)		(5,167	)		(4,768	)		(4,192	)		(4,366	)		12.7	%
Pre-tax operating income		12,200			6,323			10,422			2,186			12,206			0.0	%
Income tax expense (benefit)		4,384			2,249			3,690			(19,680	)		4,389			0.1	%
After-tax operating income		7,816			4,074			6,732			21,866			7,817			0.0	%
Net realized investment gains (losses) after tax		487			(307	)		517			(363	)		277			-43.1	%
Income from continuing operations		8,303			3,767			7,249			21,503			8,094			-2.5	%
Loss from discontinued operations after tax		(86	)		(1,165	)		(40	)		(18,318	)		-		NM
Net income	$	8,217		$	2,602		$	7,209		$	3,185		$	8,094			-1.5	%
Diluted Earnings (Loss) Per Share:
After-tax operating income	$	0.24		$	0.13		$	0.21		$	0.68		$	0.24			0.0	%
Realized gains (losses) after tax		0.02			(0.01	)		0.01			(0.01	)		0.01			-50.0	%
Income from continuing operations		0.26			0.12			0.22			0.67			0.25			-3.8	%
Loss from discontinued operations after tax		-			(0.04	)		-			(0.57	)		-		NM
Net income	$	0.26		$	0.08		$	0.22		$	0.10		$	0.25			-3.8	%
Capitalization:
Debt	$	129,380		$	129,380		$	129,380		$	143,380		$	137,445			6.2	%
Shareholders' equity excluding FAS 115 unrealized gain (loss)		374,007			377,505			384,958			392,005			400,349			7.0	%
Total capitalization excluding FAS 115 unrealized gain (loss)		503,387			506,885			514,338			535,385			537,794			6.8	%
FAS 115 unrealized gain (loss)		(22,737	)		(8,507	)		14,214			9,792			17,781		NM
Total capitalization including FAS 115 unrealized gain (loss)	$	480,650		$	498,378		$	528,552		$	545,177		$	555,575			15.6	%
Book Value Per Share:
Excluding FAS 115 unrealized gain (loss)	$	11.61		$	11.71		$	11.94		$	12.15		$	12.41			6.9	%
Including FAS 115 unrealized gain (loss)	$	10.91		$	11.45		$	12.38		$	12.46		$	12.96			18.8	%
Debt to Total Capital:
Excluding FAS 115 unrealized gain (loss)		25.7	%		25.5	%		25.2	%		26.8	%		25.6	%		-0.4	%
Including FAS 115 unrealized gain (loss)		26.9	%		26.0	%		24.5	%		26.3	%		24.7	%		-8.2	%
Interest Coverage:
Income from continuing operations before   interest and income taxes to interest   expense		6.17			3.36			5.63			1.68			6.04			-2.1	%
Operating income from continuing   operations before interest and income   taxes to interest expense		5.87			3.55			5.30			1.92			5.87			0.0	%

1

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
	1st		2nd			3rd		4th			1st
	Quarter		Quarter			Quarter		Quarter			Quarter
	2009		2009			2009		2009			2010
Diluted Earnings (Loss) Per Share:
Pre-tax operating income	$	0.38	$	0.20		$	0.32	$	0.07		$	0.38
After-tax operating income	$	0.24	$	0.13		$	0.21	$	0.68		$	0.24
Income from continuing operations	$	0.26	$	0.12		$	0.22	$	0.67		$	0.25
Loss from discontinued operations after tax		-		(0.04	)		-		(0.57	)		-
Net income	$	0.26	$	0.08		$	0.22	$	0.10		$	0.25
Diluted weighted average common
shares outstanding		32,020,346		32,231,391			32,244,469		32,250,573			32,260,938
Dividends declared:
Class A Common Stock	$	-	$	-		$	-	$	-		$	-
Actual common shares issued
and outstanding		32,211,133		32,238,944			32,241,620		32,251,120			32,251,120
Class A Common Stock prices:
High	$	7.20	$	5.35		$	6.33	$	7.44		$	6.89
Low	$	3.50	$	3.70		$	4.27	$	4.64		$	5.60
Close	$	4.17	$	4.55		$	5.69	$	6.30		$	6.14

2

PMA Capital Corporation
Consolidated Statements of Operations
(Dollar Amounts in Thousands)
		1st			2nd			3rd			4th			1st		% Change
		Quarter			Quarter			Quarter			Quarter			Quarter		1st
		2009			2009			2009			2009			2010		Quarter
Gross Premiums Written		$	164,070		$	113,424		$	164,339		$	119,433		$	171,905		4.8	%
Net Premiums Written		$	117,978		$	80,302		$	119,259		$	84,366		$	128,245		8.7	%
Revenues:
Net premiums earned		$	104,930		$	106,949		$	102,428		$	100,464		$	103,496		-1.4	%
Claims service revenues			15,684			16,835			17,112			17,998			17,883		14.0	%
Commission income			3,463			2,117			2,747			2,515			3,092		-10.7	%
Net investment income			8,457			9,561			9,522			9,336			9,120		7.8	%
Net realized investment gains (losses)			749			(472	)		795			(558	)		426		-43.1	%
Other revenues			176			190			259			458			392	NM
	Total revenues		133,459			135,180			132,863			130,213			134,409		0.7	%
Expenses:
Losses and loss adjustment expenses			75,775			73,494			70,158			71,783			75,070		-0.9	%
Acquisition expenses			17,198			19,508			16,046			17,282			18,047		4.9	%
Operating expenses			24,385			31,540			30,235			34,213			25,632		5.1	%
Dividends to policyholders			646			2,311			2,786			2,918			524		-18.9	%
Interest expense			2,506			2,476			2,421			2,389			2,504		-0.1	%
	Total losses and expenses		120,510			129,329			121,646			128,585			121,777		1.1	%
Pre-tax income			12,949			5,851			11,217			1,628			12,632		-2.4	%
Income tax expense (benefit):
	Current		244			265			220			(412	)		254		4.1	%
	Deferred		4,402			1,819			3,748			(19,463	)		4,284		-2.7	%
Total income tax expense (benefit)			4,646			2,084			3,968			(19,875	)		4,538		-2.3	%
Income from continuing operations			8,303			3,767			7,249			21,503			8,094		-2.5	%
Loss from discontinued operations after tax			(86	)		(1,165	)		(40	)		(18,318	)		-	NM
Net income		$	8,217		$	2,602		$	7,209		$	3,185		$	8,094		-1.5	%
Pre-tax operating income from continuing operations		$	12,200		$	6,323		$	10,422		$	2,186		$	12,206		0.0	%
After-tax operating income from continuing operations		$	7,816		$	4,074		$	6,732		$	21,866		$	7,817		0.0	%

3

PMA Capital Corporation
Consolidated Balance Sheets
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			2010
Assets:
Investments in fixed maturities available for sale	$	714,202		$	737,606		$	817,089		$	791,355		$	800,612
Short-term investments		58,273			38,103			62,004			41,072			25,921
Other investments		13,832			21,073			22,669			30,226			31,205
Total investments		786,307			796,782			901,762			862,653			857,738
Cash		11,767			10,163			13,887			11,059			13,583
Accrued investment income		6,500			7,221			6,918			7,352			7,663
Premiums receivable		257,380			236,663			246,871			238,650			275,122
Reinsurance receivables		830,962			855,161			807,245			827,458			839,723
Prepaid reinsurance premiums		41,314			37,271			40,883			35,788			40,363
Deferred income taxes, net		135,496			126,397			110,358			139,782			131,097
Deferred acquisition costs		44,857			39,364			42,583			39,124			44,820
Funds held by reinsureds		54,166			54,312			56,623			58,935			61,573
Intangible assets		29,668			30,165			29,961			29,757			29,553
Other assets		119,361			123,460			126,015			112,181			108,476
Assets of discontinued operations		235,265			208,272			192,431			-			-
Total assets	$	2,553,043		$	2,525,231		$	2,575,537		$	2,362,739		$	2,409,711
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,256,435		$	1,271,089		$	1,259,940		$	1,269,685		$	1,274,006
Unearned premiums		272,200			241,508			261,952			240,759			270,083
Debt		129,380			129,380			129,380			143,380			137,445
Accounts payable, accrued expenses
and other liabilities		219,189			222,359			250,304			249,787			238,493
Reinsurance funds held and balances payable		59,074			53,327			52,914			51,331			65,610
Dividends to policyholders		7,224			6,022			6,177			6,000			5,944
Liabilities of discontinued operations		258,271			232,548			215,698			-			-
Total liabilities		2,201,773			2,156,233			2,176,365			1,960,942			1,991,581
Shareholders' Equity:
Class A Common Stock		171,090			171,090			171,090			171,090			171,090
Additional paid-in capital		111,953			112,264			112,349			111,841			111,906
Retained earnings		143,291			145,500			152,670			155,747			163,841
Accumulated other comprehensive loss		(51,497	)		(36,814	)		(13,947	)		(14,060	)		(5,886	)
Treasury stock, at cost		(23,567	)		(23,042	)		(22,990	)		(22,821	)		(22,821	)
Total shareholders' equity		351,270			368,998			399,172			401,797			418,130
Total liabilities and shareholders' equity	$	2,553,043		$	2,525,231		$	2,575,537		$	2,362,739		$	2,409,711

4

PMA Capital Corporation
Selected Balance Sheet Items - Fronting Arrangements
(Dollar Amounts in Thousands)
	1st		2nd		3rd		4th		1st
	Quarter		Quarter		Quarter		Quarter		Quarter
	2009		2009		2009		2009		2010
Assets
Premiums receivable	$	38,833	$	36,670	$	33,337	$	38,756	$	46,005
Reinsurance receivables		50,175		53,675		58,107		59,579		61,431
Prepaid reinsurance premiums		24,884		23,072		20,346		20,685		23,778
Deferred acquisition costs		1,269		1,081		902		964		1,109
Other assets		6,818		7,269		6,684		7,161		4,031
Liabilities
Unpaid losses and loss adjustment expenses	$	53,087	$	57,367	$	62,642	$	65,165	$	67,440
Unearned premiums		29,430		26,866		23,512		24,073		27,794
Reinsurance funds held and balances payable		31,237		26,951		23,138		27,176		31,663
Other liabilities		11,392		12,081		12,620		14,481		11,879

PMA Capital Corporation
Rollforward of Deferred Policy Acquisition Costs - PMA Insurance Group
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			2010
Balance Sheet
Balance, beginning of period	$	40,938		$	44,857		$	39,364		$	42,583		$	39,124
Policy acquisition costs deferred		21,136			14,036			19,312			13,849			23,810
Amortization of policy acquisition costs		(17,217	)		(19,529	)		(16,093	)		(17,308	)		(18,114	)
Net change		3,919			(5,493	)		3,219			(3,459	)		5,696
Balance, end of period	$	44,857		$	39,364		$	42,583		$	39,124		$	44,820

PMA Capital Corporation
Assets and Liabilities of Discontinued Operations
(Dollar Amounts in Thousands)
	1st		2nd		3rd		4th		1st
	Quarter		Quarter		Quarter		Quarter		Quarter
	2009		2009		2009		2009		2010
Assets
Investments	$	137,317	$	110,736	$	100,296	$	-	$	-
Cash		85		1,271		494		-		-
Reinsurance receivables		93,120		89,361		81,887		-		-
Other assets		4,743		6,904		9,754		-		-
Assets of discontinued operations	$	235,265	$	208,272	$	192,431	$	-	$	-
Liabilities
Unpaid losses and loss adjustment expenses	$	235,568	$	206,743	$	193,051	$	-	$	-
Other liabilities		22,703		25,805		22,647		-		-
Liabilities of discontinued operations	$	258,271	$	232,548	$	215,698	$	-	$	-

5

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollar Amounts in Thousands)
		1st			2nd			3rd			4th			1st
		Quarter			Quarter			Quarter			Quarter			Quarter
		2009			2009			2009			2009			2010
Total Investments & Cash
As reported		$	798,074		$	806,945		$	915,649		$	873,712		$	871,321
Less:
	Unrealized gain (loss) on
	fixed maturities available for sale		(33,799	)		(13,563	)		19,501			12,201			23,873
	Unrealized gain (loss) on other investments		(1,181	)		475			2,367			2,863			3,483
	Total adjusted investments & cash	$	833,054		$	820,033		$	893,781		$	858,648		$	843,965
Net Investment Income
As reported		$	8,457		$	9,561		$	9,522		$	9,336		$	9,120
Less:
	Interest on funds held and other		(619	)		(511	)		(463	)		(406	)		(361	)
	Total adjusted investment income	$	9,076		$	10,072		$	9,985		$	9,742		$	9,481
Yield
As reported			4.28	%		4.77	%		4.42	%		4.17	%		4.18	%
Investment portfolio			4.41	%		4.87	%		4.66	%		4.45	%		4.45	%
Duration (in years)			3.5			4.3			4.2			4.3			4.2

PMA Capital Corporation

Debt

(Dollar Amounts in Thousands)

	Amount
	Outstanding		Maturity
Trust preferred debt 1	$	62,500		2033 - 2037
8.50% senior notes		54,900		2018
Notes payable		10,000		2010 - 2011	3
Surplus notes 2		10,000		2035
4.25% convertible debt		45		2022	4
Total long-term debt	$	137,445

1	Weighted average interest rate on trust preferred debt is 4.20% as of March 31, 2010. In the first quarter of 2010, we adopted accounting guidance which required us to consolidate the trusts related to our trust preferred debt. As a result, our trust preferred debt was reduced by $1.9 million.
2	Interest rate on surplus notes is 4.75% as of March 31, 2010.
3	Notes payable are for capital contributions to our former Run-off Operations, which are payable in two equal installments of $5 million in June 2010 and June 2011.
4	Holders of this debt, at their option, may require us to repurchase all or a portion of their debentures on September 30, 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.

6

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended March 31, 2010
(Dollar Amounts in Thousands)
		PMA
		Insurance		Fee-based		Corporate
		Group		Business		& Other1			Consolidated
Gross Premiums Written		$	172,043	$	-	$	(138	)	$	171,905
Net Premiums Written		$	128,383	$	-	$	(138	)	$	128,245
Revenues:
Net premiums earned		$	103,634	$	-	$	(138	)	$	103,496
Claims service revenues			-		17,895		(12	)		17,883
Commission income			-		3,159		(67	)		3,092
Net investment income			9,225		43		(148	)		9,120
Other revenues			-		388		4			392
	Total operating revenues		112,859		21,485		(361	)		133,983
Losses and Expenses:
Losses and loss adjustment expenses			75,070		-		-			75,070
Acquisition expenses			18,114		-		(67	)		18,047
Operating expenses			4,762		19,180		1,690			25,632
Dividends to policyholders			524		-		-			524
	Total losses and expenses		98,470		19,180		1,623			119,273
Operating income (loss) before income taxes
	and interest expense		14,389		2,305		(1,984	)		14,710
Interest expense			122		-		2,382			2,504
Pre-tax operating income (loss)		$	14,267	$	2,305	$	(4,366	)		12,206
Net realized investment gains										426
Pre-tax income									$	12,632
1	Corporate & Other includes the effect of eliminating transactions between the operating segments.

7

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended March 31, 2009
(Dollar Amounts in Thousands)
		PMA
		Insurance		Fee-based		Corporate
		Group		Business		& Other1			Consolidated
Gross Premiums Written		$	164,218	$	-	$	(148	)	$	164,070
Net Premiums Written		$	118,126	$	-	$	(148	)	$	117,978
Revenues:
Net premiums earned		$	105,078	$	-	$	(148	)	$	104,930
Claims service revenues			-		15,995		(311	)		15,684
Commission income			-		3,475		(12	)		3,463
Net investment income			8,466		86		(95	)		8,457
Other revenues			-		170		6			176
	Total operating revenues		113,544		19,726		(560	)		132,710
Losses and Expenses:
Losses and loss adjustment expenses			75,775		-		-			75,775
Acquisition expenses			17,217		-		(19	)		17,198
Operating expenses			4,559		17,713		2,113			24,385
Dividends to policyholders			646		-		-			646
	Total losses and expenses		98,197		17,713		2,094			118,004
Operating income (loss) before income taxes
	and interest expense		15,347		2,013		(2,654	)		14,706
Interest expense			160		-		2,346			2,506
Pre-tax operating income (loss)		$	15,187	$	2,013	$	(5,000	)		12,200
Net realized investment gains										749
Pre-tax income									$	12,949
1	Corporate & Other includes the effect of eliminating transactions between the operating segments.

8

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
	1st		2nd		3rd		4th		1st		% Change
	Quarter		Quarter		Quarter		Quarter		Quarter		1st
	2009		2009		2009		2009		2010		Quarter
Gross Premiums Written	$	164,218	$	113,566	$	164,497	$	119,575	$	172,043		4.8	%
Net Premiums Written	$	118,126	$	80,444	$	119,417	$	84,508	$	128,383		8.7	%
Revenues:
Net premiums earned	$	105,078	$	107,091	$	102,586	$	100,606	$	103,634		-1.4	%
Net investment income		8,466		9,502		9,415		9,307		9,225		9.0	%
Other revenues		-		-		-		166		-	NM
Total operating revenues		113,544		116,593		112,001		110,079		112,859		-0.6	%
Losses and Expenses:
Losses and loss adjustment expenses		75,775		73,494		70,158		71,783		75,070		-0.9	%
Acquisition expenses		17,217		19,529		16,093		17,308		18,114		5.2	%
Operating expenses		4,559		11,151		9,213		13,662		4,762		4.5	%
Dividends to policyholders		646		2,311		2,786		2,918		524		-18.9	%
Total losses and expenses		98,197		106,485		98,250		105,671		98,470		0.3	%
Operating income before income taxes
and interest expense		15,347		10,108		13,751		4,408		14,389		-6.2	%
Interest expense		160		143		135		126		122		-23.8	%
Pre-tax operating income	$	15,187	$	9,965	$	13,616	$	4,282	$	14,267		-6.1	%

9

PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
	1st			2nd			3rd			4th			1st			Point Chg.
	Quarter			Quarter			Quarter			Quarter			Quarter			1st Quarter
	2009			2009			2009			2009			2010			Better (Worse)
Ratios - GAAP Basis:
Loss and LAE ratio		72.1	%		68.6	%		68.4	%		71.4	%		72.4	%		(0.3	)
Expense ratio:
Acquisition expenses		16.4	%		18.2	%		15.7	%		17.2	%		17.5	%		(1.1	)
Operating expenses		4.4	%		10.4	%		9.0	%		13.5	%		4.6	%		(0.2	)
Total expense ratio		20.8	%		28.6	%		24.7	%		30.7	%		22.1	%		(1.3	)
Policyholders' dividend ratio		0.6	%		2.2	%		2.7	%		2.9	%		0.5	%		0.1
Combined ratio		93.5	%		99.4	%		95.8	%		105.0	%		95.0	%		(1.5	)
Net investment income ratio		-8.1	%		-8.9	%		-9.2	%		-9.3	%		-8.9	%		0.8
Operating ratio		85.4	%		90.5	%		86.6	%		95.7	%		86.1	%		(0.7	)

10

PMA Capital Corporation

Components of Direct Premiums Written - PMA Insurance Group

(Dollar Amounts in Thousands)

	1st			2nd			3rd			4th			Twelve
	Quarter			Quarter			Quarter			Quarter			Months
	2008			2008			2008			2008			2008
Direct premium production	$	146,608		$	96,736		$	150,547		$	112,296		$	506,187
Fronting premiums		8,143			2,113			2,776			21,800			34,832
Premium adjustments		(14,198	)		370			(5,008	)		(4,261	)		(23,097	)
Direct premiums written	$	140,553		$	99,219		$	148,315		$	129,835		$	517,922
	1st			2nd			3rd			4th			Twelve
	Quarter			Quarter			Quarter			Quarter			Months
	2009			2009			2009			2009			2009
Direct premium production	$	147,367		$	102,212		$	154,754		$	108,169		$	512,502
Fronting premiums		19,622			9,677			10,890			14,497			54,686
Premium adjustments		(4,876	)		(2,753	)		(3,521	)		(4,252	)		(15,402	)
Direct premiums written	$	162,113		$	109,136		$	162,123		$	118,414		$	551,786
	1st
	Quarter
	2010
Direct premium production	$	157,092
Fronting premiums		15,795
Premium adjustments		(2,019	)
Direct premiums written	$	170,868

11

PMA Capital Corporation
Statements of Operations - Fee-based Business
(Dollar Amounts in Thousands)
	1st		2nd		3rd		4th		1st		% Change
	Quarter		Quarter		Quarter		Quarter		Quarter		1st
	2009		2009		2009		2009		2010		Quarter
Revenues:
Claims service revenues	$	15,995	$	17,122	$	17,398	$	18,236	$	17,895		11.9	%
Commission income		3,475		2,132		2,777		2,572		3,159		-9.1	%
Net investment income		86		101		142		15		43		-50.0	%
Other revenues		170		167		236		208		388	NM
Total operating revenues		19,726		19,522		20,553		21,031		21,485		8.9	%
Expenses:
Operating expenses		17,713		17,997		18,979		18,935		19,180		8.3	%
Total expenses		17,713		17,997		18,979		18,935		19,180		8.3	%
Pre-tax operating income	$	2,013	$	1,525	$	1,574	$	2,096	$	2,305		14.5	%

12

PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			1st
	2009			2009			2009			2009			2010			Quarter
Gross Premiums Written	$	(148	)	$	(142	)	$	(158	)	$	(142	)	$	(138	)		6.8	%
Net Premiums Written	$	(148	)	$	(142	)	$	(158	)	$	(142	)	$	(138	)		6.8	%
Revenues:
Net premiums earned	$	(148	)	$	(142	)	$	(158	)	$	(142	)	$	(138	)		6.8	%
Claims service revenues		(311	)		(287	)		(286	)		(238	)		(12	)		96.1	%
Commission income		(12	)		(15	)		(30	)		(57	)		(67	)	NM
Net investment income		(95	)		(42	)		(35	)		14			(148	)		-55.8	%
Other revenues		6			23			23			84			4			-33.3	%
Total operating revenues		(560	)		(463	)		(486	)		(339	)		(361	)		35.5	%
Expenses:
Acquisition expenses		(19	)		(21	)		(47	)		(26	)		(67	)	NM
Operating expenses		2,113			2,392			2,043			1,616			1,690			-20.0	%
Total expenses		2,094			2,371			1,996			1,590			1,623			-22.5	%
Operating loss before income taxes
and interest expense		(2,654	)		(2,834	)		(2,482	)		(1,929	)		(1,984	)		25.2	%
Interest expense		2,346			2,333			2,286			2,263			2,382			1.5	%
Pre-tax operating loss	$	(5,000	)	$	(5,167	)	$	(4,768	)	$	(4,192	)	$	(4,366	)		12.7	%

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PMA Capital Corporation
Statements of Operations - Discontinued Operations
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st		% Change
	Quarter			Quarter			Quarter			Quarter			Quarter		1st
	2009			2009			2009			2009			2010		Quarter
Gross Premiums Written	$	466		$	2,093		$	384		$	(485	)	$	-	NM
Net Premiums Written	$	(87	)	$	1,798		$	360		$	(755	)	$	-	NM
Revenues:
Net premiums earned	$	617		$	1,673		$	(2	)	$	-		$	-	NM
Net investment income		(878	)		(937	)		(1,066	)		6,908			-	NM
Total operating revenues		(261	)		736			(1,068	)		6,908			-	NM
Losses and Expenses:
Losses and loss adjustment expenses		129			1,910			(175	)		33			-	NM
Acquisition expenses		1,199			120			104			14			-	NM
Operating expenses		2,577			2,397			2,101			4,945			-	NM
Impairment charge / valuation adjustment		(4,387	)		(2,172	)		(2,722	)		29,673			-	NM
Total losses and expenses		(482	)		2,255			(692	)		34,665			-	NM
Pre-tax operating income (loss) from discontinued operations		221			(1,519	)		(376	)		(27,757	)		-	NM
Income tax expense (benefit)		77			(530	)		(133	)		(9,715	)		-	NM
After-tax operating income (loss) from discontinued operations		144			(989	)		(243	)		(18,042	)		-	NM
Realized gains (losses) after tax		(230	)		(176	)		203			(276	)		-	NM
Loss from discontinued operations	$	(86	)	$	(1,165	)	$	(40	)	$	(18,318	)	$	-	NM

Note: The net results from discontinued operations are reported as a separate line item below "Income from continuing operations" in the consolidated statements of operations.

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PMA Capital Corporation
Operating Cash Flows - Consolidated
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			2010
Receipts:
Premiums collected	$	109,089		$	96,214		$	105,816		$	89,289		$	103,512
Claims service, commissions and other revenues		22,276			18,203			21,658			15,909			24,398
Investment income received		9,789			9,164			10,124			9,430			10,057
Total receipts		141,154			123,581			137,598			114,628			137,967
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		5,265			18,874			25,500			35,347			6,556
Losses and LAE paid - prior years		61,152			63,486			6,931			49,219			77,515
Total losses and LAE paid		66,417			82,360			32,431			84,566			84,071
Operating expenses paid		46,907			41,332			43,129			42,596			53,419
Commissions and premiums paid		1,680			2,090			3,270			(4,117	)		3,939
Policyholders' dividends paid		863			2,401			1,264			1,633			1,279
Interest on corporate debt		2,526			2,437			2,388			2,344			2,460
Total disbursements		118,393			130,620			82,482			127,022			145,168
Net other		(629	)		(1,459	)		4,976			3,262			(559	)
Net operating cash flows from continuing operations		22,132			(8,498	)		60,092			(9,132	)		(7,760	)
Net operating cash flows from discontinued operations		(14,742	)		(25,656	)		(12,549	)		(15,799	)		-
Net operating cash flows	$	7,390		$	(34,154	)	$	47,543		$	(24,931	)	$	(7,760	)

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PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			2010
Receipts:
Premiums collected	$	109,089		$	96,214		$	105,816		$	89,289		$	103,512
Investment income received		9,703			9,062			9,985			9,417			10,017
Total receipts		118,792			105,276			115,801			98,706			113,529
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		5,265			18,874			25,500			35,347			6,556
Losses and LAE paid - prior years		61,152			63,486			6,931	1		49,219			77,515
Total losses and LAE paid		66,417			82,360			32,431			84,566			84,071
Operating expenses paid		30,060			27,192			24,079			27,792			32,676
Policyholders' dividends paid		863			2,401			1,264			1,633			1,279
Interest on corporate debt		194			144			139			126			122
Total disbursements		97,534			112,097			57,913			114,117			118,148
Net other		(1,205	)		501			(3,712	)		(11,932	)		1,005
Net operating cash flows	$	20,053		$	(6,320	)	$	54,176		$	(27,343	)	$	(3,614	)

1 Reduced by $43.9 million received for a commutation with Houston Casualty Company.

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PMA Capital Corporation
Operating Cash Flows - Fee-based Business
(Dollar Amounts in Thousands)
	1st			2nd			3rd		4th			1st
	Quarter			Quarter			Quarter		Quarter			Quarter
	2009			2009			2009		2009			2010
Receipts:
Claims service, commissions and other revenues	$	22,276		$	18,203		$	21,658	$	15,909		$	24,398
Investment income received		86			102			139		13			40
Total receipts		22,362			18,305			21,797		15,922			24,438
Disbursements:
Operating expenses paid		16,847			14,140			19,050		14,804			20,743
Commissions and premiums paid		1,680			2,090			3,270		(4,117	)		3,939
Total disbursements		18,527			16,230			22,320		10,687			24,682
Net other		(242	)		(3,644	)		4,453		(2,690	)		723
Net operating cash flows	$	3,593		$	(1,569	)	$	3,930	$	2,545		$	479

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PMA Capital Corporation
Statutory Surplus
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			20101
PMA Pool 2	$	337,495		$	373,654	3	$	385,111		$	417,330	4	$	422,377
PMA Capital Insurance Company 5		29,252			26,446			30,202			-			-
PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(Dollar Amounts in Thousands)
	1st			2nd			3rd			4th			1st
	Quarter			Quarter			Quarter			Quarter			Quarter
	2009			2009			2009			2009			20101
Net Premiums Written:
Workers' Compensation	$	101,891		$	72,181		$	102,329		$	72,373		$	110,709
Other Commercial Lines		13,487			8,403			8,965			8,167			13,040
Total - PMA Pool	$	115,378		$	80,584		$	111,294		$	80,540		$	123,749
Statutory Ratios:
Loss and LAE ratio		71.6	%		51.8	%		68.9	%		72.8	%		71.4	%
Underwriting expense ratio		21.1	%		30.7	%		22.0	%		31.3	%		21.4	%
Policyholders' dividend ratio		1.2	%		1.2	%		1.4	%		1.5	%		1.2	%
Combined ratio		93.9	%		83.7	%		92.3	%		105.6	%		94.0	%
Operating ratio		85.8	%		75.0	%		83.5	%		96.3	%		85.0	%

1	Estimated.
2	The PMA  Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company.
3	The increase in statutory surplus during the second quarter of 2009 related primarily to statutory net income, which included a benefit from the commutation of a reinsurance agreement with an affiliated entity.
4	Includes impact of adoption of Statement of Statutory Accounting Principles No. 10R, "Income Taxes - Revised, A Temporary Replacement of SSAP No. 10."
5	Sold December 24, 2009.

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PMA Capital Corporation

Industry Ratings and Market Information

Transfer Agent and Registrar:	Inquiries:
American Stock Transfer & Trust Company	John M. Cochrane
Shareholder Relations	Interim Chief Financial Officer
59 Maiden Lane – Plaza Level	610.397.5076
New York, NY 10038	email: john_cochrane@pmagroup.com
www.amstock.com
	Investor Relations
Phone Inquiries:	610.397.5298
800.937.5449	email: 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 4/28/2010):
	A.M. Best	Fitch	Moody's
PMA Pool 1	A-   (4th of 16)	BBB+  (8th of 21)	Baa3  (10th of 21)
1 The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance
Insurance Company and Pennsylvania Manufacturers Indemnity Company.

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