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): March 17, 2008

THE PMI GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-13664	94-3199675
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

PMI Plaza, 3003 Oak Road

Walnut Creek, California 94597

(Address of principal executive offices, including zip code)

(925) 658-7878

(Registrant’s telephone number, including area code)

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:

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

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

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

¨ 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 March 17, 2008, The PMI Group, Inc: (1) issued a press release announcing its consolidated financial results for the quarter and year ended December 31, 2007, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference; and (2) posted on its website (www.pmigroup.com under Investor Relations) supplemental portfolio information as of December 31, 2007, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

The information contained in this Current Report on Form 8-K (including the exhibits) is being furnished to, and shall not be deemed “filed” with, the Securities and Exchange Commission.

Item 8.01 Other Events.

See Item 2.02 above.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

The following material is furnished as an exhibit to this Current Report on Form 8-K:

Exhibit No.	Description
99.1	The PMI Group, Inc. Press Release dated March 17, 2008 (including Financial Supplement).
99.2	The PMI Group, Inc. Supplemental Portfolio Information as of December 31, 2007.

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.

	THE PMI GROUP, INC.
Dated: March 17, 2008	By:	/s/ Donald P. Lofe, Jr.
		Donald P. Lofe, Jr.
		Executive Vice President, Chief Financial Officer
Dated: March 17, 2008	By:	/s/ Thomas H. Jeter
		Thomas H. Jeter
		Senior Vice President, Chief Accounting Officer and Corporate Controller

EX-99.1

EXHIBIT 99.1

	NEWS RELEASE
	Investors and Media Contacts:
	Bill Horning / Nate Purpura
	925.658.6193 / 925.658.6247

THE PMI GROUP, INC. REPORTS

FOURTH QUARTER AND YEAR END 2007 FINANCIAL RESULTS

Walnut Creek, CA, March 17, 2008 - The PMI Group, Inc. (NYSE: PMI) (the “Company”) today reported a net loss for the full year 2007 of $915.3 million, or $10.81 per basic and diluted¹ share. Net income for the full year 2006 was $419.7 million, or $4.57 per diluted share. The net loss for the fourth quarter 2007 was $1.0 billion or $12.51 per basic and diluted share¹, compared to net income in the fourth quarter 2006 of $100.5 million, or $1.19 per diluted share. The net loss for the fourth quarter of 2007 was primarily due to our equity in the losses from FGIC of $776.1 million (after tax) and a net loss of $236.0 million in the U.S. Mortgage Insurance Operations due to increases in paid claims, loss adjustment expenses and additions to the reserve for losses (collectively “Losses and LAE”).

Key results include:

^¡ U.S. Mortgage Insurance Operations² — The net loss was $236.0 million in the fourth quarter of 2007. During the fourth quarter, the Company added $434.8 million to the reserves for losses and loss adjustment expenses and paid $114.5 million in claims. Total revenues in the fourth quarter increased by approximately 9% compared to the fourth quarter of 2006, driven by strong growth in net premiums written and earned. Insurance in force at the end of 2007 was $123.6 billion, representing a 20% increase from one year ago.

^¡ International Operations³ — PMI Australia posted net income of $17.8 million in the fourth quarter of 2007 on higher premiums earned and net investment income, partially offset by higher Losses and LAE. Losses and LAE increased in the fourth quarter of 2007 to $29.4 million from $17.8 million in the fourth quarter 2006 due primarily to higher claim rates. PMI Europe reported a net loss of $29.6 million in the fourth quarter 2007, primarily as a result of increased Losses and LAE of $22.1 million and an unrealized $8.4 million (pre-tax) mark-to-market loss on credit default swaps related to European prime mortgage risks due to widening credit spreads. PMI Asia reported net income of $2.9 million fueled by strong growth in reinsurance premiums written compared to the fourth quarter 2006.

¹ Due to the net loss in the fourth quarter 2007, normally dilutive components of shares outstanding such as stock options were not included in fully diluted shares outstanding as their inclusion would have been anti-dilutive.

² “U.S. Mortgage Insurance Operations” includes the results of PMI Mortgage Insurance Co. (PMI), affiliated U.S. reinsurance companies and equity in earnings from CMG Mortgage Insurance Company (CMG MI).

³ “International Operations” includes the results of PMI Australia, PMI Europe, PMI Asia and PMI Canada.

^¡ Financial Guaranty⁴ — equity in losses from FGIC for the fourth quarter of 2007 were $776.1 million (after tax), as a result of higher Losses and LAE and an unrealized mark-to-market loss related to its credit derivative portfolio. During the fourth quarter, the Company recorded an other than temporary impairment of its investment in Ram Re of $38.5 million (pre-tax).

Consolidated Operating Results

Consolidated net premiums written for the fourth quarter and full year totaled $263.5 million and $1.0 billion, respectively, compared with $235.5 million and $861.6 million for the same periods one year ago. The year over year increase was primarily due to increases in new insurance written in the U.S. Mortgage Insurance Operations and an increase in International Operations’ net premiums written combined with favorable Australian foreign exchange rates.

Consolidated premiums earned for the fourth quarter and full year were $259.6 million and $995.2 million, respectively, compared with $225.7 million and $860.5 million for the same periods one year ago. The increases were due primarily to new insurance written, improved persistency and larger loan sizes in the U.S. Mortgage Insurance Operations.

Consolidated losses and LAE for the fourth quarter and full year were $574.7 million and $1.2 billion, respectively, compared with $90.5 million and $302.9 million for the same periods last year. The increases were primarily a result of higher Losses and LAE in our U.S. Mortgage Insurance Operations as a result of the significant deterioration of the U.S. housing, mortgage and capital markets.

Consolidated reserve for losses and LAE totaled $1.2 billion as of December 31, 2007 compared with $770.4 million as of September 30, 2007 and $414.7 million as of December 31, 2006. Reserves for losses and LAE in the U.S. Mortgage Insurance Operations increased $434.8 million in the fourth quarter of 2007 primarily due to an increase in notices of default, increased claim rates and larger claim sizes. PMI Australia’s reserve for losses and LAE increased $13.8 million in the fourth quarter of 2007 principally due to higher claim rates and claim sizes.

Consolidated other underwriting and operating expenses for the fourth quarter and full year were $56.7 million and $229.8 million, respectively, compared with $68.0 million and $237.0 million for the same periods one year ago.

⁴ “Financial Guaranty” includes PMI Guaranty Co. (PMI Guaranty) and our equity investments in Financial Guaranty Insurance Company, Inc. (FGIC) and Ram Reinsurance Company Ltd. (RAM Re).

The PMI Group, Inc. Fourth Quarter Results by Segment
	Fourth Quarter Total Revenues					Fourth Quarter Net (Loss) Income
(Dollars in millions, except per share data)	2007			2006		2007			2006
U.S. Mortgage Insurance Operations	$	231.9		$	212.2	$	(236.0	)	$	77.2
International Operations		68.0			61.5		(10.1	)		20.0
Financial Guaranty6		(35.8	)		2.0		(766.2	)		28.4
Corporate and Other5		17.4			6.2		(2.1	)		(25.1	)
Consolidated Total	$	281.5		$	281.9	$	(1,014.9	)	$	100.5
Diluted Net (Loss) Income Per Share1						$	(12.51	)	$	1.19
Book Value Per Share						$	30.98		$	41.14

May not total due to rounding.

n.m. – Not meaningful.

The PMI Group, Inc. Full Year Results by Segment
	Full Year Ended December 31 Total Revenues					Full Year Ended December 31 Net (Loss) Income
(Dollars in millions, except per share data)	2007			2006		2007			2006
U.S. Mortgage Insurance Operations	$	916.0		$	797.6	$	(190.8	)	$	290.3
International Operations		265.0			248.6		55.0			103.5
Financial Guaranty		(28.0	)		2.0		(731.7	)		97.3
Corporate and Other2		32.2			30.5		(47.8	)		(71.4	)
Consolidated Total	$	1,185.2		$	1,078.7	$	(915.3	)	$	419.7
Diluted Net (Loss) Income Per Share						$	(10.81	)	$	4.57

May not total due to rounding.

n.m. – Not meaningful.

Segment Highlights

U.S. Mortgage Insurance Operations

• The net loss totaled $236.0 million for the fourth quarter of 2007 compared with net income of $77.2 million in the fourth quarter of 2006. The net loss in the fourth quarter was due primarily to higher Losses and LAE and an impairment of the deferred policy acquisition asset, partially offset by higher premiums earned and lower other underwriting and operating expenses.

• Net premiums written in the fourth quarter of 2007 increased by 14.0% to $200.3 million from $175.7 million in the fourth quarter of 2006. The increase was due primarily to increases in insurance in force driven by new insurance written and higher persistency.

• The primary persistency rate increased to 75.5% in the fourth quarter of 2007 compared with 69.6% in the fourth quarter of 2006.

• Losses and LAE in the fourth quarter of 2007 were $520.6 million compared with $72.0 million in the fourth quarter of 2006 driven by an increase in notices of default, increased claim rates and larger claim sizes.

• Total claims paid increased to $114.5 million for the fourth quarter of 2007 compared with $61.4 million in the fourth quarter of 2006 driven by an increase in the claim rates and larger average claim sizes.

• After tax equity in earnings from CMG MI for the fourth quarter of 2007 was $2.3 million, compared with $3.3 million for the same period of 2006. The decline in equity in earnings was primarily driven by higher

⁵ The “Corporate and Other” segment primarily consists of the holding company, contract underwriting operations and intercompany eliminations.

Losses and LAE partially offset by higher premiums earned. CMG MI’s insurance in force grew to $18.9 billion, persistency increased to 81.6% and the primary default rate was 1.42%.

International Operations

• PMI Australia reported net income of $17.8 million for the fourth quarter of 2007 compared with net income of $13.8 million for the fourth quarter of 2006. The increase in net income was due primarily to increased premiums earned and net investment income partially offset by higher Losses and LAE. The fourth quarter of 2007 addition to reserves for losses and LAE was $13.8 million bringing the total reserves for losses and LAE to $65.1 million. Claims paid for the fourth quarter totaled $14.9 million.

• PMI Europe reported a net loss of $29.6 million in the fourth quarter of 2007 compared with net income of $3.5 million for the same period a year ago. The decrease was due primarily to higher Losses and LAE and, to a lesser extent, an unrealized $8.4 million (pre-tax) negative mark-to-market adjustment on credit default swaps related to European prime mortgage risks due to widening credit spreads.

• PMI Asia’s net income in the fourth quarter of 2007 totaled $2.9 million compared with $2.7 million for the same period a year ago.

Financial Guaranty

• After tax equity in losses from FGIC for the fourth quarter of 2007 totaled $776.1 million compared with after tax equity in earnings of $25.9 million for the same period a year ago. The loss in the fourth quarter of 2007 was primarily due to Losses and LAE from its structured finance portfolio and an unrealized mark-to-market loss related to its credit derivative portfolio due to widening credit spreads. Following equity in losses from FGIC in the third and fourth quarters, the Company’s carrying value of its investment as of December 31, 2007 was $103.6 million.

• After tax equity in losses from RAM Re for the fourth quarter of 2007 was $2.3 million compared with after tax equity in earnings of $1.9 million for the same period one year ago. As RAM Re reports on a one quarter lag, PMI’s share of their third quarter 2007 loss is accounted for in the fourth quarter. The Company also recorded a partial impairment of $38.5 million (pre-tax) of its investment in RAM Re. After impairment, the carrying value of our investment in RAM Re as of December 31, 2007 was $60.0 million.

• A valuation allowance of approximately $168.1 million was established against a $214.3 million deferred tax asset associated with our investment in FGIC and RAM Re. The deferred tax asset is created upon the recognition of losses from FGIC and RAM Re in excess of our tax basis with respect to our investment in those companies. The Company did not record a full valuation against the deferred tax asset, as it is management’s expectation that some portion of the tax benefit will be realized. The deferred tax benefit of $46.2 million is not included in the after tax equity in losses discussed above.

• PMI Guaranty, which began operations in the fourth quarter of 2006, reported a net loss of $0.8 million in the fourth quarter of 2007.

Corporate and Other

• The Corporate and Other segment reported a net loss of $2.1 million for the fourth quarter of 2007 compared with a net loss of $25.1 million for the same period a year ago. The decrease in the net loss for the fourth quarter of 2007 compared with the fourth quarter of 2006 was due to higher net realized investment gains, a reversal of an impairment charge related to the sale of our investment in SPS and lower other underwriting and operating expenses and interest expense.

Supplemental Financial Information

• The PMI Group, Inc.’s Fourth Quarter 2007 Financial Supplement can be found at www.pmigroup.com under Investor Relations.

ABOUT THE PMI GROUP, INC.

The PMI Group, Inc. (NYSE: PMI), headquartered in Walnut Creek, CA, is an international provider of credit enhancement products that promote homeownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, the company offers residential mortgage insurance and credit enhancement products domestically and internationally, financial guaranty insurance, and financial guaranty reinsurance. Through its subsidiaries, The PMI Group, Inc. is one of the world’s largest providers of private mortgage insurance with operations in the United States, Australia and New Zealand, Canada and the European Union, as well as one of the largest providers of mortgage guaranty reinsurance in Hong Kong. For more information: www.pmigroup.com.

Cautionary Statement: Statements in this earnings release that are not historical facts, and that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties that could affect the Company are discussed in our Form 10-K for the year ended December 31, 2007 and include changes in economic conditions such as interest rates, home values, employment rates and refinance activity. We undertake no obligation to update forward-looking statements.

#     #     #

THE PMI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended December 31,					Year Ended December 31,
	2007			2006		2007			2006
	(Unaudited)					(Audited)
	(Dollars in thousands, except per share data)
Net premiums written	$	263,485		$	235,468	$	1,040,236		$	861,614
Revenues
Premiums earned	$	259,640		$	225,743	$	995,172		$	860,530
Net (loss) income from credit default swaps		(9,483	)		2,687		(14,447	)		7,431
Net investment income		54,836			49,740		214,002			195,301
Net realized investment (losses) gains		(1,341	)		1,135		1,045			2,756
Impairment of unconsolidated subsidiary		(38,499	)		—		(38,499	)		—
Settlement gain on unconsolidated subsidiary		12,670			—		12,670			—
Other income		3,660			2,610		15,221			12,710
Total revenues		281,483			281,915		1,185,164			1,078,728
Losses and expenses
Losses and loss adjustment expenses		574,680			90,532		1,203,004			302,936
Amortization of deferred policy acquisition costs		53,408			16,293		104,885			68,358
Other underwriting and operating expenses		56,734			67,981		229,793			236,973
Interest expense		8,383			12,323		33,398			38,055
Total losses and expenses		693,205			187,129		1,571,080			646,322
(Loss) income before equity in (losses) earnings from unconsolidated subsidiaries and income taxes		(411,722	)		94,786		(385,916	)		432,406
Equity in (losses) earnings from unconsolidated subsidiaries		(791,155	)		35,906		(741,500	)		127,309
(Loss) income before income taxes		(1,202,877	)		130,692		(1,127,416	)		559,715
Income tax (benefit) expense		(188,458	)		30,242		(212,090	)		140,064
Net (loss) income	$	(1,014,419	)	$	100,450	$	(915,326	)	$	419,651
Diluted net (loss) income per share	$	(12.51	)	$	1.19	$	(10.81	)	$	4.57
THE PMI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	December 31, 2007					December 31, 2006
	(Audited)					(Audited)
	(Dollars in thousands, except per share data)
Assets
Investments	$	3,729,151				$	3,244,058
Cash and cash equivalents		427,912					506,082
Investments in unconsolidated subsidiaries		309,800					1,100,387
Property, equipment and software, net of accumulated depreciation and amortization		161,762					174,128
Other assets		441,815					292,900
Total assets	$	5,070,440				$	5,317,555
Liabilities
Reserve for losses and loss adjustment expenses	$	1,242,599				$	414,736
Unearned premiums		611,247					520,264
Debt		496,593					496,593
Other liabilities		207,039					317,372
Total liabilities		2,557,478					1,748,965
Shareholders’ equity		2,512,962					3,568,590
Total liabilities and shareholders’ equity	$	5,070,440				$	5,317,555
Basic shares issued and outstanding		81,120					86,747
Book value per share	$	30.98				$	41.14

Note: Please refer to The PMI Group, Inc. Fourth Quarter 2007 Financial Supplement for additional information.

THE PMI GROUP, INC. AND SUBSIDIARIES FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED DECEMBER 31, 2007
Table of Contents	Page
Notes to Financial Results and Statistical Information	3
Consolidated Results
Consolidated Statements of Operations	4
Consolidated Balance Sheets	5
Business Segments Results of Operations - Three Months Ended December 31, 2007 and 2006	6
Business Segments Results of Operations - Years Ended December 31, 2007 and 2006	7
Business Segments Balance Sheets	8
U.S. Mortgage Insurance Operations Segment Results
U.S. Mortgage Insurance Operations Segment Results of Operations and Balance Sheets	9
U.S. Mortgage Insurance Operations Portfolio Characteristics	10-12
U.S. Mortgage Insurance Operations Default Information and Analysis of Loss Reserves	13
CMG Mortgage Insurance Company Statistical Information	14
International Mortgage Insurance Operations Segment Results
International Operations Segment Results of Operations and Balance Sheets	15
PMI Australia Quarterly Financial Information	16
PMI Australia Statistical Information	17
PMI Europe Quarterly Financial Information	18
PMI Asia Quarterly Financial Information	19
PMI Europe and PMI Asia Statistical Information	20
Financial Guaranty Segment Results
Financial Guaranty Segment Results of Operation and Balance Sheets	21
Corporate and Other Segment Results
Corporate and Other Segment Results of Operations and Balance Sheets	22

Page 2

THE PMI GROUP, INC. AND SUBSIDIARIES FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED DECEMBER 31, 2007 Notes to Financial Results and Statistical Information:
(1)	U.S. Mortgage Insurance Operations include the operating results of PMI Mortgage Insurance Co. and affiliated U.S. mortgage insurance and reinsurance companies (collectively, “PMI”). CMG Mortgage Insurance Company and its affiliates are included under the equity method of accounting in equity in earnings from unconsolidated subsidiaries.
(2)	International Operations include PMI Australia, PMI Europe, PMI Asia and PMI Canada. PMI Canada began offering residential mortgage insurance products to Canadian lenders and mortgage originators in the second quarter of 2007.
(3)	Financial Guaranty represents PMI Guaranty Co. (“PMI Guaranty”) and our equity investments in FGIC Corporation and RAM Reinsurance Company, Ltd. (“RAM Re”).
(4)	The Corporate and Other segment includes other income and related operating expenses of PMI Mortgage Services Co.; investment income, interest expense, intercompany eliminations and corporate expenses of The PMI Group, Inc. (the “Company”); the results of Commercial Loan Insurance Corporation, WMAC Credit Insurance Corporation and equity in earnings from certain limited partnerships.
(5)	For the quarter and year ended December 31, 2007, the Company’s equity in earnings (losses) from unconsolidated subsidiaries include FGIC Corporation, CMG Mortgage Insurance Company, CMG Mortgage Reinsurance Company and CMG Mortgage Assurance Company (collectively, “CMG MI”), RAM Re, and certain limited partnership interests.
(6)	Other underwriting and operating expenses from the Corporate and Other segment include charges of $2.6 million and $16.1 million (pre-tax) or $1.7 million and $11.5 million (after tax) for stock option expenses and related share-based compensation expenses in the fourth quarter and year ended December 31, 2007, respectively, compared to $2.3 million and $12.2 million (pre-tax) or $1.8 million and $9.4 million (after tax) for the corresponding periods in 2006.
(7)	The expense ratio is expressed as a ratio, of the sum of amortization of deferred policy acquisition costs and other underwriting and operating expenses to net premiums written. The loss ratio is expressed as a ratio of losses and loss adjustment expenses (“LAE”) to premiums earned.
(8)	Pool insurance includes modified pool, GSE pool, old pool and all other pool insurance products for U.S. Mortgage Insurance Operations.
(9)	The statutory risk-to-capital ratio is for PMI Mortgage Insurance Co. only.
(10)	During the fourth quarter of 2007, the Company did not repurchase any common shares. The total shares repurchased in 2007 include the final delivery of 436,152 shares under the $345 million accelerated share repurchase program.
(11)	Interest expense in our Financial Guaranty segment relates to a $50 million surplus note provided to PMI Guaranty by the Company. The surplus note bears interest at an annual rate of 5.85% and is due October 20, 2026. The surplus note and the interest expense are eliminated in the Corporate and Other segment.
(12)	For the first half of 2006, PMI Asia’s income statements represent the results of PMI’s Hong Kong Branch.
(13)	As of data, such as insurance in force, risk in force, policy in force and loans in default, are the same as recent period end in the total column.
(14)	Due to the net loss in this quarter and year, normally dilutive components of shares outstanding such as stock options were not included in fully diluted shares outstanding as their inclusion would have been anti-dilutive.
(15)	The Company realized an other-than-temporary impairment of $38.5 million due to continuing deterioration of the credit market and declines in RAM Re’s share price.
(16)	On October 4, 2005, the Company sold to Credit Suisse First Boston (USA), Inc. its equity ownership interest in SPS Holding Corp. (“SPS”). The Company has received cash payments of $5.4 million during 2007 from the residual interest in SPS mortgage servicing assets. Based on the settlement agreement dated January 25, 2008, the Company recorded a $12.7 million of settlement gain.
(17)	Claim severity is, for a given period, claims paid as a percentage of the total risk in force of loans for which claims were paid.
(18)	PMI’s persistency rate was calculated based upon the percentage of primary insurance in force at the beginning of a 12-month period that remains in force at the end of that period.
Note:	The interim financial and statistical information contained in this material is unaudited. Certain prior periods’ information has been reclassified to conform to the current periods’ presentation.
The PMI Group, Inc.’s Investor Relations contacts:

Bill Horning	Kosta Karmaniolas
(925) 658-6193	(925) 658-6137

Page 3

THE PMI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended December 31,					Year Ended December 31,
	2007			2006		2007			2006
	(Unaudited)					(Audited)
	(Dollars and shares, except per share data, in thousands)
Net premiums written	$	263,485		$	235,468	$	1,040,236		$	861,614
Revenues
Premiums earned	$	259,640		$	225,743	$	995,172		$	860,530
Net (loss) income from credit default swaps		(9,483	)		2,687		(14,447	)		7,431
Net investment income		54,836			49,740		214,002			195,301
Net realized investment (losses) gains		(1,341	)		1,135		1,045			2,756
Impairment of unconsolidated subsidiary (15)		(38,499	)		—		(38,499	)		—
Settlement gain on sale of unconsolidated subsidiary (16)		12,670			—		12,670			—
Other income		3,660			2,610		15,221			12,710
Total revenues		281,483			281,915		1,185,164			1,078,728
Losses and expenses
Losses and loss adjustment expenses		574,680			90,532		1,203,004			302,936
Amortization of deferred policy acquisition costs		53,408			16,293		104,885			68,358
Other underwriting and operating expenses (6)		56,734			67,981		229,793			236,973
Interest expense		8,383			12,323		33,398			38,055
Total losses and expenses		693,205			187,129		1,571,080			646,322
(Loss) income before equity in (losses) earnings from unconsolidated subsidiaries and income taxes		(411,722	)		94,786		(385,916	)		432,406
Equity in (losses) earnings from unconsolidated subsidiaries (5)		(791,155	)		35,906		(741,500	)		127,309
(Loss) income before income taxes		(1,202,877	)		130,692		(1,127,416	)		559,715
Income tax (benefit) expense		(188,458	)		30,242		(212,090	)		140,064
Net (loss) income	$	(1,014,419	)	$	100,450	$	(915,326	)	$	419,651
Diluted net (loss) income per share	$	(12.51	)	$	1.19	$	(10.81	)	$	4.57
Reconciliation of (losses) earnings per share
Net (loss) income	$	(1,014,419	)	$	100,450	$	(915,326	)	$	419,651
Plus: Interest expense on contingently convertible debt, net of income taxes		—			24		—			4,752
Net (loss) income adjusted for diluted earnings per share calculation	$	(1,014,419	)	$	100,474	$	(915,326	)	$	424,403
Share data:
Basic weighted average common shares outstanding		81,120			83,275		84,645			86,478
Stock options and other dilutive components (14)		—			1,140		—			1,192
Common stock equivalent shares related to contingently convertible debt (14)		—			122		—			5,196
Diluted weighted average common shares outstanding (14)		81,120			84,537		84,645			92,866
Share repurchase data:
Common shares repurchased (10)		—			907		6,684	*		11,397
Average price paid per common share repurchased (including commissions)	$	—		$	44.11	$	34.41	*		*

* In May 2007, upon completion of the $345 million accelerated share repurchase program, The Company received the final delivery of 436,152 common shares bringing the total received under the program to 7,624,700 shares. The average price paid per common share upon completion of this program was $45.25 per common share.

Page 4

THE PMI GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
	December 31,		December 31,
	2007		2006
	(Audited)		(Audited)
	(Dollars and shares, except per share data in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	3,266,693	$	2,826,853
Equity securities:
Common		159,936		162,263
Preferred		299,630		248,761
Short term investments		2,892		6,181
Total investments	$	3,729,151	$	3,244,058
Cash and cash equivalents		427,912		506,082
Investments in unconsolidated subsidiaries (5)		309,800		1,100,387
Property, equipment and software, net of accumulated depreciation and amortization		161,762		174,128
Other assets		441,815		292,900
Total assets	$	5,070,440	$	5,317,555
Liabilities
Reserve for losses and loss adjustment expenses	$	1,242,599	$	414,736
Unearned premiums		611,247		520,264
Debt		496,593		496,593
Other liabilities		207,039		317,372
Total liabilities		2,557,478		1,748,965
Shareholders’ equity
Common stock		1,193		1,193
Additional paid-in capital, treasury stock and retained earnings		2,196,692		3,303,317
Accumulated other comprehensive income, net of deferred taxes		315,077		264,080
Total shareholders’ equity		2,512,962		3,568,590
Total liabilities and shareholders’ equity	$	5,070,440	$	5,317,555
Basic shares issued and outstanding		81,120		86,747
Book value per share	$	30.98	$	41.14

Page 5

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS RESULTS OF OPERATIONS - THREE MONTHS ENDED DECEMBER 31, 2007 AND 2006

	U.S. Mortgage Insurance Operations (1)			International Operations (2)			Financial Guaranty (3)			Corporate and Other (4)			Consolidated Total
	Three Months Ended December 31, 2007 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	200,253		$	62,817		$	396		$	19		$	263,485
Revenues
Premiums earned	$	206,254		$	52,940		$	436		$	10		$	259,640
Net loss from credit default swaps		—			(9,483	)		—			—			(9,483	)
Net investment income		27,281			23,905			2,250			1,400			54,836
Net realized investment (losses) gains		(1,526	)		183			3			(1	)		(1,341	)
Impairment of unconsolidated subsidiary (15)		—			—			(38,499	)		—			(38,499	)
Settlement gain on sale of unconsolidated subsidiary (16)		—			—			—			12,670			12,670
Other (loss) income		(86	)		476			—			3,270			3,660
Total revenues		231,923			68,021			(35,810	)		17,349			281,483
Losses and expenses
Losses and loss adjustment expenses		520,611			51,420			2,649			—			574,680
Amortization of deferred policy acquisition costs		46,213			6,882			313			—			53,408
Other underwriting and operating expenses (6)		22,717			14,505			1,112			18,400			56,734
Interest expense (11)		33			—			731			7,619			8,383
Total losses and expenses		589,574			72,807			4,805			26,019			693,205
(Loss) income before equity in earnings (losses) from unconsolidated subsidiaries and income taxes		(357,651	)		(4,786	)		(40,615	)		(8,670	)		(411,722	)
Equity in earnings (losses) from unconsolidated subsidiaries (5)		3,474			—			(794,637	)		8			(791,155	)
(Loss) income before income taxes		(354,177	)		(4,786	)		(835,252	)		(8,662	)		(1,202,877	)
Income tax (benefit) expense		(118,160	)		5,326			(69,096	)		(6,528	)		(188,458	)
Net (loss) income	$	(236,017	)	$	(10,112	)	$	(766,156	)	$	(2,134	)	$	(1,014,419	)
Loss ratio (7)		252.4	%		97.1	%
Expense ratio (7)		34.4	%		34.0	%
Combined ratio		286.8	%		131.1	%
	Three Months Ended December 31, 2006 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	175,730		$	58,129		$	1,590		$	19		$	235,468
Revenues
Premiums earned	$	184,511		$	41,219		$	1		$	12		$	225,743
Income from credit default swaps		—			2,687			—			—			2,687
Net investment income		26,071			17,990			2,036			3,643			49,740
Net realized investment gains (losses)		1,627			(244	)		—			(248	)		1,135
Other (loss) income		(30	)		(189	)		—			2,829			2,610
Total revenues		212,179			61,463			2,037			6,236			281,915
Losses and expenses
Losses and loss adjustment expenses		72,039			18,492			—			1			90,532
Amortization of deferred policy acquisition costs		12,544			3,748			1			—			16,293
Other underwriting and operating expenses (6)		27,116			11,064			716			29,085			67,981
Interest expense		—			1			569			11,753			12,323
Total losses and expenses		111,699			33,305			1,286			40,839			187,129
Income (loss) before equity in earnings (losses) from unconsolidated subsidiaries and income taxes		100,480			28,158			751			(34,603	)		94,786
Equity in earnings (losses) from unconsolidated subsidiaries (5)		5,077			—			30,953			(124	)		35,906
Income (loss) before income taxes		105,557			28,158			31,704			(34,727	)		130,692
Income tax expense (benefit)		28,349			8,193			3,281			(9,581	)		30,242
Net income (loss)	$	77,208		$	19,965		$	28,423		$	(25,146	)	$	100,450
Loss ratio (7)		39.0	%		44.9	%
Expense ratio (7)		22.6	%		25.5	%
Combined ratio		61.6	%		70.4	%

Page 6

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2007 AND 2006

	U.S. Mortgage Insurance Operations (1)			International Operations (2)			Financial Guaranty (3)			Corporate and Other (4)			Consolidated Total
	Year Ended December 31, 2007 (Audited)
	(Dollars in thousands)
Net premiums written	$	799,747		$	233,684		$	6,753		$	52		$	1,040,236
Revenues
Premiums earned	$	800,937		$	192,545		$	1,633		$	57		$	995,172
Net loss from credit default swaps		—			(14,447	)		—			—			(14,447	)
Net investment income		110,355			86,016			9,206			8,425			214,002
Net realized investment gains (losses)		4,587			42			(351	)		(3,233	)		1,045
Impairment of unconsolidated subsidiary (15)		—			—			(38,499	)		—			(38,499	)
Settlement gain on sale of unconsolidated subsidiary (16)		—			—			—			12,670			12,670
Other income		85			828			—			14,308			15,221
Total revenues		915,964			264,984			(28,011	)		32,227			1,185,164
Losses and expenses
Losses and loss adjustment expenses		1,096,093			104,262			2,649			—			1,203,004
Amortization of deferred policy acquisition costs		84,214			19,713			958			—			104,885
Other underwriting and operating expenses (6)		95,557			52,475			2,505			79,256			229,793
Interest expense (11)		108			6			2,925			30,359			33,398
Total losses and expenses		1,275,972			176,456			9,037			109,615			1,571,080
(Loss) income before equity in earnings (losses) from unconsolidated subsidiaries and income taxes		(360,008	)		88,528			(37,048	)		(77,388	)		(385,916	)
Equity in earnings (losses) from unconsolidated subsidiaries (5)		17,119			—			(758,833	)		214			(741,500	)
(Loss) income before income taxes		(342,889	)		88,528			(795,881	)		(77,174	)		(1,127,416	)
Income tax (benefit) expense		(152,073	)		33,538			(64,211	)		(29,344	)		(212,090	)
Net (loss) income	$	(190,816	)	$	54,990		$	(731,670	)	$	(47,830	)	$	(915,326	)
Loss ratio (7)		136.9	%		54.1	%
Expense ratio (7)		22.5	%		30.9	%
Combined ratio		159.4	%		85.0	%
	Year Ended December 31, 2006 (Audited)
	(Dollars in thousands)
Net premiums written	$	658,576		$	201,392		$	1,590		$	56		$	861,614
Revenues
Premiums earned	$	687,993		$	172,471		$	1		$	65		$	860,530
Income from credit default swaps		—			7,431			—			—			7,431
Net investment income		105,893			65,842			2,037			21,529			195,301
Net realized investment gains (losses)		3,789			3,602			—			(4,635	)		2,756
Other (loss) income		(69	)		(747	)		—			13,526			12,710
Total revenues		797,606			248,599			2,038			30,485			1,078,728
Losses and expenses
Losses and loss adjustment expenses		263,037			39,901			—			(2	)		302,936
Amortization of deferred policy acquisition costs		51,979			16,378			1			—			68,358
Other underwriting and operating expenses (6)		100,569			41,935			716			93,753			236,973
Interest expense		2			125			569			37,359			38,055
Total losses and expenses		415,587			98,339			1,286			131,110			646,322
Income (loss) before equity in earnings (losses) from unconsolidated subsidiaries and income taxes		382,019			150,260			752			(100,625	)		432,406
Equity in earnings (losses) from unconsolidated subsidiaries (5)		20,308			—			107,213			(212	)		127,309
Income (loss) before income taxes		402,327			150,260			107,965			(100,837	)		559,715
Income tax expense (benefit)		112,010			46,747			10,706			(29,399	)		140,064
Net income (loss)	$	290,317		$	103,513		$	97,259		$	(71,438	)	$	419,651
Loss ratio (7)		38.2	%		23.1	%
Expense ratio (7)		23.2	%		29.0	%
Combined ratio		61.4	%		52.1	%

Page 7

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS BALANCE SHEETS

	U.S. Mortgage Insurance Operations (1)		International Operations (2)		Financial Guaranty (3)			Corporate and Other (4)			Consolidated Total
	December 31, 2007 (Audited)
	(Dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	1,531,606	$	1,514,198	$	167,915		$	52,974		$	3,266,693
Equity securities:
Common		116,005		42,689		—			1,242			159,936
Preferred		277,165		—		22,465			—			299,630
Short term investments		951		641		—			1,300			2,892
Total investments	$	1,925,727	$	1,557,528	$	190,380		$	55,516		$	3,729,151
Cash and cash equivalents		229,446		135,702		11,252			51,512			427,912
Investments in unconsolidated subsidiaries (5)		131,225		—		163,661			14,914			309,800
Property, equipment and software, net of accumulated depreciation and amortization		75,884		6,549		187			79,142			161,762
Other assets		234,422		100,908		56,828			49,657			441,815
Total assets	$	2,596,704	$	1,800,687	$	422,308		$	250,741		$	5,070,440
Liabilities
Reserve for losses and loss adjustment expenses	$	1,133,080	$	106,869	$	2,650		$	—		$	1,242,599
Unearned premiums		107,200		497,309		6,709			29			611,247
Long-term debt		—		—		50,000			446,593			496,593
Other liabilities (assets)		129,246		75,416		2,892			(515	)		207,039
Total liabilities		1,369,526		679,594		62,251			446,107			2,557,478
Shareholders’ equity
Common stock, additional paid-in capital, treasury stock and retained earnings		1,173,202		866,585		348,388			(190,290	)		2,197,885
Accumulated other comprehensive income (loss), net of deferred taxes		53,976		254,508		11,669			(5,076	)		315,077
Total shareholders’ equity (deficit)		1,227,178		1,121,093		360,057			(195,366	)		2,512,962
Total liabilities and shareholders’ equity	$	2,596,704	$	1,800,687	$	422,308		$	250,741		$	5,070,440
	December 31, 2006 (Audited)
	(Dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	1,563,335	$	1,129,580	$	77,803		$	56,135		$	2,826,853
Equity securities:
Common		127,825		34,438		—			—			162,263
Preferred		232,736		—		16,025			—			248,761
Short term investments		929		3,952		—			1,300			6,181
Total investments	$	1,924,825	$	1,167,970	$	93,828		$	57,435		$	3,244,058
Cash and cash equivalents		65,501		181,099		116,449			143,033			506,082
Investments in unconsolidated subsidiaries (5)		132,403		—		950,249			17,735			1,100,387
Property, equipment and software, net of accumulated depreciation and amortization		87,139		4,002		—			82,987			174,128
Other assets		185,820		78,927		4,292			23,861			292,900
Total assets	$	2,395,688	$	1,431,998	$	1,164,818		$	325,051		$	5,317,555
Liabilities
Reserve for losses and loss adjustment expenses	$	366,182	$	48,554	$	—		$	—		$	414,736
Unearned premiums		106,445		412,196		1,589			34			520,264
Debt		—		—		50,000			446,593			496,593
Other liabilities (assets)		283,544		58,010		41,440			(65,622	)		317,372
Total liabilities		756,171		518,760		93,029			381,005			1,748,965
Shareholders’ equity
Common stock, additional paid-in capital, treasury stock and retained earnings		1,548,452		737,118		1,071,865			(52,925	)		3,304,510
Accumulated other comprehensive income (loss), net of deferred taxes		91,065		176,120		(76	)		(3,029	)		264,080
Total shareholders’ equity (deficit)		1,639,517		913,238		1,071,789			(55,954	)		3,568,590
Total liabilities and shareholders’ equity	$	2,395,688	$	1,431,998	$	1,164,818		$	325,051		$	5,317,555

Page 8

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS SEGMENT ⁽¹⁾ RESULTS OF OPERATIONS AND BALANCE SHEETS

	2007															2006
Income Statement Components -Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(Dollars in thousands)															(Dollars in thousands)
Revenues
Premiums written:
Gross premiums written	$	258,026		$	266,545		$	236,412		$	240,430		$	1,001,413		$	221,747		$	205,848		$	203,426		$	208,136		$	839,157
Ceded premiums, net of assumed premiums		(51,467	)		(46,993	)		(42,973	)		(41,135	)		(182,568	)		(42,608	)		(42,108	)		(41,402	)		(41,655	)		(167,773	)
Refunded premiums		(6,306	)		(5,154	)		(4,259	)		(3,379	)		(19,098	)		(3,409	)		(3,272	)		(3,120	)		(3,007	)		(12,808	)
Net premiums written		200,253			214,398			189,180			195,916			799,747			175,730			160,468			158,904			163,474			658,576
Change in unearned premiums		6,001			(8,859	)		6,205			(2,157	)		1,190			8,781			7,650			8,922			4,064			29,417
Premiums earned	$	206,254		$	205,539		$	195,385		$	193,759		$	800,937		$	184,511		$	168,118		$	167,826		$	167,538		$	687,993
Net investment income		27,281			28,786			25,966			28,322			110,355			26,071			27,082			27,064			25,676			105,893
Net realized investment (losses) gains		(1,526	)		2,865			981			2,267			4,587			1,627			1,620			305			237			3,789
Other (loss) income		(86	)		167			17			(13	)		85			(30	)		(22	)		7			(24	)		(69	)
Total revenues		231,923			237,357			222,349			224,335			915,964			212,179			196,798			195,202			193,427			797,606
Losses and expenses
Losses and loss adjustment expenses		520,611			348,314			134,384			92,784			1,096,093			72,039			67,699			64,153			59,146			263,037
Amortization of deferred policy acquisition costs		46,213			12,809			12,610			12,582			84,214			12,544			12,830			13,162			13,443			51,979
Other underwriting and operating expenses		22,717			18,420			26,759			27,661			95,557			27,116			22,619			22,970			27,864			100,569
Interest expense		33			36			39			—			108			—			1			1			—			2
Total losses and expenses		589,574			379,579			173,792			133,027			1,275,972			111,699			103,149			100,286			100,453			415,587
(Loss) income before equity in earnings from unconsolidated subsidiaries and income taxes		(357,651	)		(142,222	)		48,557			91,308		$	(360,008	)		100,480			93,649			94,916			92,974			382,019
Equity in earnings from unconsolidated subsidiaries		3,474			4,167			4,617			4,861			17,119			5,077			5,010			5,729			4,492			20,308
(Loss) income before income taxes		(354,177	)		(138,055	)		53,174			96,169			(342,889	)		105,557			98,659			100,645			97,466			402,327
Income tax (benefit) expense		(118,160	)		(72,833	)		11,627			27,293			(152,073	)		28,349			27,819			28,480			27,362			112,010
Net (loss) income	$	(236,017	)	$	(65,222	)	$	41,547		$	68,876		$	(190,816	)	$	77,208		$	70,840		$	72,165		$	70,104		$	290,317
Loss ratio (7)		252.4	%		169.5	%		68.8	%		47.9	%		136.9	%		39.0	%		40.3	%		38.2	%		35.3	%		38.2	%
Expense ratio (7)		34.4	%		14.6	%		20.8	%		20.5	%		22.5	%		22.6	%		22.1	%		22.7	%		25.3	%		23.2	%
Combined ratio		286.8	%		184.1	%		89.6	%		68.4	%		159.4	%		61.6	%		62.4	%		60.9	%		60.6	%		61.4	%
Balance Sheet Components -As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(Dollars in thousands)															(Dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	1,531,606		$	1,567,122		$	1,523,285		$	1,540,150					$	1,563,335		$	1,614,966		$	1,666,359		$	1,776,309
Equity securities:
Common		116,005			135,738			141,255			129,096						127,825			119,493			113,698			118,310
Preferred		277,165			283,051			236,403			229,948						232,736			239,919			180,884			156,262
Short term investments		951			951			947			930						929			930			795			399
Total investments	$	1,925,727		$	1,986,862		$	1,901,890		$	1,900,124					$	1,924,825		$	1,975,308		$	1,961,736		$	2,051,280
Cash and cash equivalents		229,446			91,460			165,114			262,327						65,501			89,263			297,657			152,155
Investments in unconsolidated subsidiaries		131,225			127,206			122,072			137,041						132,403			127,424			120,574			133,218
Property, equipment and software, net of accumulated depreciation and amortization		75,884			80,170			83,293			84,448						87,139			90,093			93,249			95,693
Other assets		234,422			234,041			186,205			170,820						185,820			184,494			173,512			174,898
Total assets	$	2,596,704		$	2,519,739		$	2,458,574		$	2,554,760					$	2,395,688		$	2,466,582		$	2,646,728		$	2,607,244
Liabilities
Reserve for losses and loss adjustment expenses	$	1,133,080		$	698,238		$	444,594		$	386,036					$	366,182		$	358,784		$	355,832		$	346,437
Unearned premiums		107,200			112,634			103,331			108,968						106,445			114,720			147,739			156,993
Other liabilities		129,246			205,749			265,268			347,720						283,544			257,035			284,851			282,510
Total liabilities		1,369,526			1,016,621			813,193			842,724						756,171			730,539			788,422			785,940
Shareholder’s equity
Common stock, additional paid-in capital and retained earnings		1,173,202			1,422,818			1,564,260			1,627,452						1,548,452			1,645,914			1,797,158			1,742,255
Accumulated other comprehensive income, net of deferred taxes		53,976			80,300			81,121			84,584						91,065			90,129			61,148			79,049
Total shareholder’s equity		1,227,178			1,503,118			1,645,381			1,712,036						1,639,517			1,736,043			1,858,306			1,821,304
Total liabilities and shareholder’s equity	$	2,596,704		$	2,519,739		$	2,458,574		$	2,554,760					$	2,395,688		$	2,466,582		$	2,646,728		$	2,607,244

Page 9

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS PORTFOLIO CHARACTERISTICS (1)

	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(Dollars in millions)															(Dollars in millions)
New Insurance Written
Flow insurance written	$	8,701		$	11,091		$	10,268		$	7,524		$	37,584		$	6,498		$	6,015		$	5,716		$	5,041		$	23,270
Structured insurance written		369			3,404			1,337			3,439			8,549			2,932			1,641			1,344			3,047			8,964
Primary new insurance written	$	9,070		$	14,495		$	11,605		$	10,963		$	46,133		$	9,430		$	7,656		$	7,060		$	8,088		$	32,234
Primary new risk written	$	2,215		$	3,533		$	2,806		$	2,920		$	11,474		$	2,427		$	1,980		$	1,790		$	2,148		$	8,345
Pool new insurance written (8)	$	968		$	1,953		$	5,270		$	6,188		$	14,379		$	12,338		$	3,924		$	3,575		$	4,726		$	24,563
Pool new risk written (8)	$	14		$	41		$	122		$	178		$	355		$	450		$	84		$	108		$	104		$	746
Product mix as a % of primary new insurance written:
High LTV (above 97% LTV’s)		21	%		31	%		35	%		36	%		32	%		27	%		19	%		17	%		13	%		19	%
95.01% to 97% LTV’s		2	%		2	%		3	%		3	%		3	%		3	%		2	%		2	%		1	%		2	%
90.01% to 95% LTV’s		26	%		26	%		21	%		22	%		24	%		19	%		21	%		22	%		21	%		21	%
85.01% to 90% LTV’s		40	%		30	%		31	%		27	%		31	%		34	%		44	%		46	%		46	%		42	%
85% and below		11	%		11	%		10	%		12	%		10	%		17	%		14	%		13	%		19	%		16	%
Less than A quality loans		8	%		12	%		10	%		9	%		10	%		7	%		5	%		5	%		8	%		6	%
Alt-A loans		15	%		22	%		32	%		38	%		27	%		36	%		37	%		33	%		35	%		34	%
Interest only loans		12	%		18	%		24	%		26	%		20	%		23	%		16	%		11	%		22	%		18	%
Payment option ARMS		1	%		2	%		3	%		3	%		3	%		6	%		9	%		10	%		8	%		8	%
ARMs		3	%		8	%		8	%		16	%		9	%		20	%		19	%		20	%		39	%		24	%
Monthlies		98	%		86	%		98	%		95	%		94	%		96	%		96	%		96	%		97	%		96	%
Refinances		36	%		31	%		38	%		47	%		37	%		38	%		34	%		32	%		39	%		36	%
Structured transactions		4	%		23	%		12	%		31	%		19	%		31	%		21	%		19	%		38	%		28	%

Page 10

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS PORTFOLIO CHARACTERISTICS (2)

	2007												2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(Dollars in millions, except loan size)												(Dollars in millions, except loan size)
Primary Insurance and Risk in Force
Primary insurance in force
Flow	$	102,410		$	98,105		$	91,864		$	87,184		$	85,086		$	84,405		$	84,644		$	85,685
Structured transactions		21,213			21,864			19,803			19,701			17,549			15,877			15,741			15,826
Total	$	123,623		$	119,969		$	111,667		$	106,885		$	102,635		$	100,282		$	100,385		$	101,511
Primary risk in force
Flow	$	25,852		$	24,754		$	23,075		$	21,837		$	21,095		$	20,855		$	20,883		$	21,102
Structured transactions		5,115			5,324			5,016			5,138			4,616			4,193			4,127			4,147
Total	$	30,967		$	30,078		$	28,091		$	26,975		$	25,711		$	25,048		$	25,010		$	25,249
Pool risk in force (8)	$	3,464		$	3,476		$	3,461		$	3,373		$	3,216		$	2,773		$	2,737		$	2,666
Primary risk in force - credit score distribution
Flow
620 or above		93.1	%		93.1	%		93.6	%		93.8	%		93.7	%		93.5	%		93.3	%		93.2	%
619-575		5.3	%		5.3	%		5.0	%		4.9	%		5.0	%		5.2	%		5.3	%		5.4	%
574 or below		1.6	%		1.6	%		1.4	%		1.3	%		1.3	%		1.3	%		1.4	%		1.4	%
Structured transactions
620 or above		86.1	%		86.1	%		85.4	%		85.3	%		84.7	%		82.8	%		80.6	%		79.2	%
619-575		8.8	%		8.8	%		9.2	%		9.2	%		9.8	%		10.8	%		12.3	%		13.2	%
574 or below		5.1	%		5.1	%		5.4	%		5.5	%		5.5	%		6.4	%		7.1	%		7.6	%
Total
620 or above		91.9	%		91.9	%		92.1	%		92.2	%		92.0	%		91.7	%		91.3	%		90.9	%
619-575		5.9	%		5.9	%		5.8	%		5.7	%		5.9	%		6.1	%		6.4	%		6.6	%
574 or below		2.2	%		2.2	%		2.1	%		2.1	%		2.1	%		2.2	%		2.3	%		2.5	%
Primary average loan size (in thousands)
Flow	$	153.7		$	150.6		$	146.6		$	142.8		$	140.0		$	138.3		$	136.9		$	135.6
Structured transactions	$	161.7		$	162.0		$	159.6		$	159.2		$	155.6		$	151.8		$	150.7		$	150.7
Total	$	155.0		$	152.6		$	148.7		$	145.5		$	142.5		$	140.3		$	138.9		$	137.8
Loss severity (17) - primary (quarterly)
Flow		95.5	%		90.6	%		87.9	%		88.5	%		88.6	%		83.1	%		83.2	%		84.9	%
Structured transactions		94.6	%		92.0	%		92.5	%		90.3	%		92.4	%		86.7	%		86.8	%		91.2	%
Total		95.2	%		91.1	%		89.3	%		89.0	%		89.6	%		84.0	%		84.1	%		86.5	%
Persistency (18)
Primary persistency rate		75.5	%		73.3	%		71.7	%		70.7	%		69.6	%		67.3	%		64.9	%		63.1	%
Risk-to-capital ratio (9)		10.8 to 1			9.6 to 1			8.6 to 1			8.3 to 1			8.1 to 1			8.2 to 1			7.7 to 1			8.1 to 1

Page 11

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS PORTFOLIO CHARACTERISTICS (3)

	12/31/2007					9/30/2007					12/31/2006
	Primary Risk in Force			Percent of Total		Primary Risk in Force			Percent of Total		Primary Risk in Force			Percent of Total
	(In millions)					(In millions)					(In millions)
Policy Year As a Percentage of Primary Risk in Force (RIF)
Prior to 1999	$	436		1.4	%	$	462		1.5	%	$	571		2.2	%
1999		312		1.0	%		324		1.1	%		377		1.5	%
2000		144		0.5	%		151		0.5	%		190		0.7	%
2001		539		1.7	%		569		1.9	%		696		2.7	%
2002		1,173		3.8	%		1,245		4.1	%		1,520		5.9	%
2003		3,174		10.2	%		3,346		11.1	%		4,084		15.9	%
2004		3,344		10.8	%		3,557		11.8	%		4,507		17.5	%
2005		4,829		15.6	%		5,092		16.9	%		6,254		24.3	%
2006		6,191		20.0	%		6,456		21.5	%		7,512		29.3	%
2007		10,825		35.0	%		8,876		29.5	%		—
Total	$	30,967				$	30,078				$	25,711
	12/31/2007					9/30/2007					12/31/2006
	% of Primary RIF			Primary Default Rate		% of Primary RIF			Primary Default Rate		% of Primary RIF			Primary Default Rate
Top 10 States as a Percentage of Primary Risk in Force,
(Ranking based on 12/31/07 RIF)
Florida		10.8	%	10.6	%		10.8	%	7.0	%		10.7	%	3.4	%
California		8.1	%	10.9	%		7.7	%	7.4	%		7.0	%	3.6	%
Texas		7.2	%	6.0	%		7.2	%	5.3	%		7.4	%	5.6	%
Illinois		5.0	%	8.2	%		5.1	%	6.5	%		5.1	%	5.6	%
Georgia		4.7	%	9.5	%		4.7	%	8.2	%		4.7	%	7.9	%
Ohio		3.8	%	10.8	%		3.9	%	9.3	%		4.3	%	8.8	%
New York		3.6	%	6.8	%		3.6	%	6.2	%		3.8	%	5.4	%
Pennsylvania		3.3	%	7.5	%		3.4	%	6.5	%		3.6	%	6.0	%
Washington		3.1	%	3.6	%		3.0	%	2.8	%		2.9	%	2.8	%
New Jersey		3.0	%	7.5	%		3.1	%	6.1	%		3.1	%	4.6	%
	2007										2006
	12/31/2007			9/30/2007		6/30/2007			3/31/2007		12/31/2006			9/30/2006		6/30/2006		3/31/2006
As a Percentage of Primary Risk in Force - loan to value ratios
High LTV (above 97% LTV’s)		24.6	%	23.9	%		22.4	%	20.3	%		17.6	%	15.9	%	15.1	%	14.6	%
95.01% to 97% LTV’s		3.8	%	4.0	%		4.3	%	4.5	%		4.6	%	4.8	%	4.9	%	5.0	%
90.01% to 95% LTV’s		29.5	%	29.3	%		29.4	%	30.1	%		31.0	%	31.9	%	32.5	%	33.0	%
85.01% to 90% LTV’s		35.0	%	34.9	%		35.7	%	36.5	%		37.9	%	38.5	%	38.3	%	37.9	%
85% and below		7.1	%	7.9	%		8.2	%	8.6	%		8.9	%	8.9	%	9.2	%	9.5	%
As a Percentage of Primary Risk in Force:
Less-than-A quality (FICO scores below 620)		8.1	%	8.1	%		7.9	%	7.8	%		8.0	%	8.3	%	8.7	%	9.1	%
Less-than-A quality (FICO scores below 575) (A)		2.2	%	2.2	%		2.1	%	2.1	%		2.1	%	2.2	%	2.3	%	2.5	%
Alt-A Loans:
With FICO scores of 660 and above		19.6	%	20.0	%		19.3	%	18.3	%		16.3	%	15.1	%	14.0	%	15.3	%
With FICO scores below 660 and above 619		3.2	%	3.4	%		3.7	%	3.8	%		3.6	%	3.5	%	3.3	%	3.1	%
Total Alt-A Loans		22.8	%	23.4	%		23.0	%	22.1	%		19.9	%	18.6	%	17.3	%	18.4	%
ARMs (B)		12.8	%	14.1	%		16.0	%	17.7	%		18.7	%	19.4	%	20.4	%	21.1	%
Interest Only (C)		14.2	%	14.2	%		13.6	%	12.1	%		9.9	%	8.2	%	7.6	%	7.5	%
Payment Option ARMs		3.8	%	3.9	%		4.2	%	4.3	%		4.5	%	4.5	%	4.2	%	3.8	%

(A) Less-than-A quality loans with FICO scores below 575 is a subset of PMI’s less-than-A quality loan portfolio.

(B) Approximately 3.2% and 1.1% of RIF are subject to initial payment adjustment in 2008 and 2009, respectively.

(C) Approximately 89% and 98% of interest only loans written in 2006 and the first nine months of 2007, respectively, have an initial deferral period of 5 years or greater.

Page 12

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS DEFAULT INFORMATION AND ANALYSIS OF LOSS RESERVES

	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total (13)			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total (13)
	(Dollars in millions, except claim size)															(Dollars in millions, except claim size)
Primary loans, defaults and default rates
Primary policies in force		797,419			786,301			750,835			734,431			797,419			720,347			714,742			722,756			736,908			720,347
Primary loans in default		63,197			50,742			42,349			39,206			63,197			39,997			38,573			37,102			37,784			39,997
Primary default rate		7.93	%		6.45	%		5.64	%		5.34	%		7.93	%		5.55	%		5.40	%		5.13	%		5.13	%		5.55	%
Flow only default rate		6.74	%		5.38	%		4.70	%		4.54	%		6.74	%		4.75	%		4.61	%		4.44	%		4.55	%		4.75	%
Structured transactions only default rate		13.92	%		11.65	%		10.37	%		9.29	%		13.92	%		9.86	%		9.96	%		9.26	%		8.59	%		9.86	%
Pool default rate		7.76	%		6.18	%		5.17	%		4.82	%		7.76	%		4.24	%		4.81	%		5.60	%		6.17	%		4.24	%
Claims paid (in millions)
Primary claims paid - flow	$	71.0		$	57.7		$	46.7		$	46.9		$	222.3		$	43.4		$	43.1		$	37.1		$	38.0		$	161.6
Primary claims paid - structured transactions		34.7			29.4			21.6			18.4			104.1			15.6			14.9			11.6			13.7			55.8
Supplemental and other		3.5			0.6			(0.5	)		(0.4	)		3.2			(0.6	)		(0.7	)		(1.2	)		(0.9	)		(3.4	)
Total primary claims paid		109.2			87.7			67.8			64.9			329.6			58.4			57.3			47.5			50.8			214.0
Total pool and other		5.3			4.9			4.5			4.4			19.1			3.0			4.7			4.6			4.3			16.6
Total claims paid		114.5			92.6			72.3			69.3			348.7			61.4			62.0			52.1			55.1			230.6
Loss adjustment expenses		3.4			3.3			3.4			3.5			13.6			3.3			3.0			2.9			3.0			12.2
Total claims paid including loss adjustment expenses	$	117.9		$	95.9		$	75.7		$	72.8		$	362.3		$	64.7		$	65.0		$	55.0		$	58.1		$	242.8
Number of primary claims paid		2,889			2,675			2,336			2,362			10,262			2,195			2,346			2,038			2,058			8,637
Average primary claim size (in thousands)	$	37.8		$	32.8		$	29.0		$	27.5		$	32.1		$	26.6		$	24.4		$	23.3		$	24.7		$	24.8
Captive reinsurance arrangements (quarter-to-date)
Percentage of flow NIW subject to captive reinsurance arrangements		74.3	%		64.2	%		60.9	%		49.2	%		62.7	%		61.6	%		72.2	%		72.8	%		69.6	%		68.8	%
Percentage of primary NIW subject to captive reinsurance arrangements		71.3	%		49.1	%		53.9	%		34.0	%		51.1	%		43.0	%		57.3	%		59.3	%		44.8	%		50.4	%
Percentage of primary IIF subject to captive reinsurance arrangements		52.2	%		50.2	%		50.3	%		51.0	%		52.2	%		52.9	%		53.9	%		53.3	%		53.2	%		52.9	%
Percentage of primary RIF subject to captive reinsurance arrangements		52.3	%		50.2	%		50.2	%		50.8	%		52.3	%		53.2	%		54.4	%		53.9	%		53.9	%		53.2	%
	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2007			9/30/2007			6/30/2007			3/31/2007
	(Dollars in millions)															(Dollars in millions)
Loss Reserve Analysis
Beginning reserves for losses and LAE at January 1,	$	366.2		$	366.2		$	366.2		$	366.2					$	345.5		$	345.5		$	345.5		$	345.5
Reinsurance recoverables		(2.9	)		(2.9	)		(2.9	)		(2.9	)					(2.5	)		(2.5	)		(2.5	)		(2.5	)
Net balance at January 1,		363.3			363.3			363.3			363.3						343.0			343.0			343.0			343.0
Loss and LAE incurred (principally with respect to defaults occurring in ):
Current year		894.4			419.6			181.5			80.1						260.8			190			123.4			59.6
Prior years		201.7			155.9			45.7			12.7						2.2			1.0			(0.1	)		(0.5	)
Total incurred		1,096.1			575.5			227.2			92.8						263.0			191.0			123.3			59.1
Loss and LAE payments (principally with respect to defaults occurring in ):
Current year		(43.6	)		(12.3	)		(1.0	)		(0.1	)					(22.1	)		(7.2	)		(1.9	)		(0.7	)
Prior years		(318.6	)		(232.1	)		(147.5	)		(72.7	)					(220.6	)		(170.8	)		(111.1	)		(57.3	)
Total payments		(362.2	)		(244.4	)		(148.5	)		(72.8	)					(242.7	)		(178.0	)		(113.0	)		(58.0	)
Net ending balance		1,097.2			694.4			442.0			383.3						363.3			356.0			353.3			344.1
Reinsurance recoverables		35.9			3.8			2.6			2.7						2.9			2.8			2.5			2.3
Ending reserves for losses and LAE	$	1,133.1		$	698.2		$	444.6		$	386.0					$	366.2		$	358.8		$	355.8		$	346.4
	December 31, 2007						September 30, 2007						June 30, 2007						March 31, 2007						December 31, 2006
	Loans in Default			Reserve for Losses and LAE			Loans in Default			Reserve for Losses and LAE			Loans in Default			Reserve for Losses and LAE			Loans in Default			Reserve for Losses and LAE			Loans in Default			Reserve for Losses and LAE
	(Dollars in millions)
Primary insurance		63,197		$	1,054.3			50,742		$	651.2			42,349		$	402.8			39,206		$	348.7			39,997		$	332.9
Pool insurance (8)		29,143			78.8			23,789			47.0			20,238			41.8			18,500			37.3			15,898			33.3
Total		92,340		$	1,133.1			74,531		$	698.2			62,587		$	444.6			57,706		$	386.0			55,895		$	366.2

Page 13

THE PMI GROUP, INC. AND SUBSIDIARIES

CMG MORTGAGE INSURANCE COMPANY STATISTICAL INFORMATION

	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total (13)			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total (13)
	(Dollars in millions, except claims paid and claim size)
Primary new insurance written	$	1,389		$	1,621		$	1,566		$	1,053		$	5,629		$	1,064		$	1,238		$	1,167		$	891		$	4,360
Primary insurance in force	$	18,942		$	18,265		$	17,415		$	16,670		$	18,942		$	16,320		$	16,063		$	15,774		$	15,476		$	16,320
Primary risk in force	$	4,721		$	4,532		$	4,292		$	4,085		$	4,721		$	3,984		$	3,897		$	3,791		$	3,686		$	3,984
Policies in force		126,342			123,164			118,933			115,224			126,342			113,832			113,004			111,889			110,879			113,832
Primary loans in default		1,796			1,516			1,259			1,130			1,796			1,192			974			965			992			1,192
Primary default rate		1.42	%		1.23	%		1.06	%		0.98	%		1.42	%		1.05	%		0.86	%		0.86	%		0.89	%		1.05	%
Persistency		81.6	%		80.7	%		79.2	%		78.5	%		81.6	%		77.2	%		75.6	%		73.6	%		72.3	%		77.2	%
Primary claims paid (in thousands)	$	3,726		$	3,235		$	2,392		$	2,131		$	11,484		$	1,372		$	2,268		$	1,512		$	1,200		$	6,352
Number of primary claims paid		112			116			83			75			386			54			98			68			55			275
Average primary claim size (in thousands)	$	33.3		$	27.9		$	28.8		$	28.4		$	29.8		$	25.4		$	23.1		$	22.2		$	21.8		$	23.1

Page 14

THE PMI GROUP, INC. AND SUBSIDIARIES

INTERNATIONAL OPERATIONS SEGMENT ⁽²⁾ RESULTS OF OPERATIONS AND BALANCE SHEETS

	2007															2006
Income Statement Components - Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(U.S. dollars in thousands)															(U.S. dollars in thousands)
Net premiums written	$	62,817		$	62,109		$	65,376		$	43,382		$	233,684		$	58,129		$	51,942		$	52,900		$	38,421		$	201,392
Revenues
Premiums earned	$	52,940		$	50,839		$	46,384		$	42,382		$	192,545		$	41,219		$	46,766		$	45,801		$	38,685		$	172,471
Net (loss) income from credit default swaps		(9,483	)		(8,371	)		1,579			1,828			(14,447	)		2,687			978			2,128			1,638			7,431
Net investment income		23,905			22,366			20,581			19,164			86,016			17,990			17,442			15,625			14,785			65,842
Net realized investment gains (losses)		183			(231	)		53			37			42			(244	)		3,452			252			142			3,602
Other income (loss)		476			577			(614	)		389			828			(189	)		(40	)		(1,910	)		1,392			(747	)
Total revenues		68,021			65,180			67,983			63,800			264,984			61,463			68,598			61,896			56,642			248,599
Losses and expenses
Losses and loss adjustment expenses		51,420			24,530			11,776			16,536			104,262			18,492			11,907			7,708			1,794			39,901
Amortization of deferred policy acquisition costs		6,882			4,939			4,131			3,761			19,713			3,748			4,105			4,826			3,699			16,378
Other underwriting and operating expenses		14,505			14,740			12,657			10,573			52,475			11,064			10,971			10,267			9,633			41,935
Interest expense		—			—			—			6			6			1			124			—			—			125
Total losses and expenses		72,807			44,209			28,564			30,876			176,456			33,305			27,107			22,801			15,126			98,339
(Loss) income before income taxes		(4,786	)		20,971			39,419			32,924			88,528			28,158			41,491			39,095			41,516			150,260
Income tax expense		5,326			7,092			11,322			9,798			33,538			8,193			12,048			13,598			12,908			46,747
Net (loss) income	$	(10,112	)	$	13,879		$	28,097		$	23,126		$	54,990		$	19,965		$	29,443		$	25,497		$	28,608		$	103,513
Loss ratio (7)		97.1	%		48.3	%		25.4	%		39.0	%		54.1	%		44.9	%		25.5	%		16.8	%		4.6	%		23.1	%
Expense ratio (7)		34.0	%		31.7	%		25.7	%		33.0	%		30.9	%		25.5	%		29.0	%		28.5	%		34.7	%		29.0	%
Combined ratio		131.1	%		80.0	%		51.1	%		72.0	%		85.0	%		70.4	%		54.5	%		45.3	%		39.3	%		52.1	%
Balance Sheet Components - As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(U.S. dollars in thousands)															(U.S. dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	1,514,198		$	1,522,699		$	1,318,542		$	1,219,205					$	1,129,580		$	1,082,140		$	1,000,338		$	892,251
Equity securities: common		42,689			44,650			42,026			37,417						34,438			29,917			29,408			29,190
Short term investments		641			1,413			2,052			3,570						3,952			6,064			8,401			—
Total investments	$	1,557,528		$	1,568,762		$	1,362,620		$	1,260,192					$	1,167,970		$	1,118,121		$	1,038,147		$	921,441
Cash and cash equivalents		135,702			112,847			216,869			138,444						181,099			129,023			118,307			172,875
Property, equipment and software, net of accumulated depreciation and amortization		6,549			6,400			5,508			4,149						4,002			3,624			3,513			2,646
Other assets		100,908			97,330			88,571			101,538						78,927			80,875			70,609			67,902
Total assets	$	1,800,687		$	1,785,339		$	1,673,568		$	1,504,323					$	1,431,998		$	1,331,643		$	1,230,576		$	1,164,864
Liabilities
Reserve for losses and loss adjustment expenses	$	106,869		$	72,148		$	62,357		$	56,984					$	48,554		$	35,426		$	28,773		$	23,476
Unearned premiums		497,309			493,486			461,464			422,733						412,196			375,091			343,136			323,431
Other liabilities		75,416			65,947			62,844			69,810						58,010			66,628			56,691			77,128
Total liabilities		679,594			631,581			586,665			549,527						518,760			477,145			428,600			424,035
Shareholder’s equity
Common stock, additional paid-in capital and retained earnings		866,585			876,693			862,812			760,243						737,118			717,102			670,446			628,613
Accumulated other comprehensive income, net of deferred taxes		254,508			277,065			224,091			194,553						176,120			137,396			131,530			112,216
Total shareholder’s equity		1,121,093			1,153,758			1,086,903			954,796						913,238			854,498			801,976			740,829
Total liabilities and shareholder’s equity	$	1,800,687		$	1,785,339		$	1,673,568		$	1,504,323					$	1,431,998		$	1,331,643		$	1,230,576		$	1,164,864

Page 15

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI AUSTRALIA QUARTERLY FINANCIAL INFORMATION

	2007															2006
Income Statement Components -Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(U.S. dollars in thousands, unless otherwise noted)
Revenues
Premiums written
Gross premiums written	$	59,041		$	56,816		$	60,572		$	39,525		$	215,954		$	54,793		$	49,008		$	50,013		$	36,267		$	190,081
Ceded premiums		(652	)		(826	)		(688	)		(623	)		(2,789	)		(887	)		(873	)		(713	)		(1,062	)		(3,535	)
Refunded premiums		(873	)		(770	)		(773	)		(668	)		(3,084	)		(668	)		(663	)		(696	)		(566	)		(2,593	)
Net premiums written		57,516			55,220			59,111			38,234			210,081			53,238			47,472			48,604			34,639			183,953
Change in unearned premiums		(11,103	)		(10,996	)		(19,006	)		(1,870	)		(42,975	)		(19,071	)		(7,623	)		(9,493	)		(2,373	)		(38,560	)
Premiums earned		46,413			44,224			40,105			36,364			167,106			34,167			39,849			39,111			32,266			145,393
Net investment income		20,325			18,779			17,251			16,146			72,501			15,001			14,298			13,088			12,354			54,741
Net realized investment gains (losses)		160			36			68			(75	)		189			(291	)		2,801			(194	)		122			2,438
Other income (loss)		574			487			(599	)		488			950			(189	)		(38	)		(1,778	)		1,446			(559	)
Total revenues		67,472			63,526			56,825			52,923			240,746			48,688			56,910			50,227			46,188			202,013
Losses and expenses
Losses and loss adjustment expenses		29,350			21,849			10,144			16,157			77,500			17,809			10,526			6,751			1,224			36,310
Amortization of deferred policy acquisition costs		4,054			4,424			3,655			3,363			15,496			3,318			3,721			4,483			3,404			14,926
Other underwriting and operating expenses		8,223			9,235			8,212			7,460			33,130			8,048			7,433			7,302			7,036			29,819
Interest expense		—			—			—			6			6			1			124			—			—			125
Total losses and expenses		41,627			35,508			22,011			26,986			126,132			29,176			21,804			18,536			11,664			81,180
Income before income taxes		25,845			28,018			34,814			25,937			114,614			19,512			35,106			31,691			34,524			120,833
Income tax expense		8,030			8,304			10,385			7,890			34,609			5,682			10,374			9,768			10,470			36,294
Net income	$	17,815		$	19,714		$	24,429		$	18,047		$	80,005		$	13,830		$	24,732		$	21,923		$	24,054		$	84,539
Net income (AUS $ in thousands)	$	19,867		$	23,225		$	29,320		$	22,953		$	95,365		$	18,073		$	32,688		$	29,332		$	32,546		$	112,639
Loss Ratio (7)		63.2	%		49.4	%		25.2	%		44.4	%		46.4	%		52.1	%		26.4	%		17.3	%		3.8	%		25.0	%
Expense Ratio (7)		21.3	%		24.7	%		20.1	%		28.3	%		23.1	%		21.4	%		23.6	%		24.2	%		30.1	%		24.3	%
Combined Ratio		84.5	%		74.1	%		45.3	%		72.7	%		69.5	%		73.5	%		50.0	%		41.5	%		33.9	%		49.3	%
Balance Sheet Components -As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(U.S. dollars in thousands)															(U.S. dollars in thousands)
Assets
Investments - available - for - sale, at fair value:
Fixed income securities	$	1,182,179		$	1,194,701		$	1,064,267		$	966,509					$	882,976		$	847,500		$	809,802		$	701,519
Equity securities: common		42,685			44,646			42,022			37,413						34,435			29,913			29,405			29,187
Total investments	$	1,224,864		$	1,239,347		$	1,106,289		$	1,003,922					$	917,411		$	877,413		$	839,207		$	730,706
Cash and cash equivalents		69,824			45,737			100,268			108,573						153,897			103,035			94,298			142,694
Property, equipment and software, net of accumulated depreciation and amortization		4,325			4,141			3,725			2,653						2,454			2,240			2,293			2,350
Other assets		79,745			77,790			71,988			78,674						59,462			58,612			56,444			57,685
Total assets	$	1,378,758		$	1,367,015		$	1,282,270		$	1,193,822					$	1,133,224		$	1,041,300		$	992,242		$	933,435
Liabilities
Reserve for losses and loss adjustment expenses	$	65,060		$	51,284		$	44,023		$	39,167					$	30,424		$	18,039		$	11,988		$	8,230
Unearned premiums		452,743			448,166			417,721			379,252						367,987			329,631			320,564			300,313
Other liabilities		27,159			24,857			32,385			39,844						36,450			41,005			35,346			35,368
Total liabilities		544,962			524,307			494,129			458,263						434,861			388,675			367,898			343,911
Shareholder’s equity
Common stock, additional paid - in capital and retained earnings		645,359			627,544			607,829			583,401						565,353			551,523			526,791			504,868
Accumulated other comprehensive income, net of deferred taxes		188,437			215,164			180,312			152,158						133,010			101,102			97,553			84,656
Total shareholder’s equity		833,796			842,708			788,141			735,559						698,363			652,625			624,344			589,524
Total liabilities and shareholder’s equity	$	1,378,758		$	1,367,015		$	1,282,270		$	1,193,822					$	1,133,224		$	1,041,300		$	992,242		$	933,435

Page 16

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI AUSTRALIA STATISTICAL INFORMATION

	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total (13)			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total (13)
	(U.S. dollars in millions, except loan size, claims paid and claim size)
New insurance written
Flow insurance written	$	6,357		$	6,142		$	5,959		$	4,300		$	22,758		$	5,836		$	5,376		$	5,062		$	4,152		$	20,426
RMBS insurance written		1,714			3,594			6,151			3,284			14,743			3,078			3,899			7,744			5,291			20,012
New insurance written	$	8,071		$	9,736		$	12,110		$	7,584		$	37,501		$	8,914		$	9,275		$	12,806		$	9,443		$	40,438
Insurance in force
Flow	$	109,943		$	112,150		$	107,229		$	98,630		$	109,943		$	94,529		$	86,026		$	86,215		$	81,503		$	94,529
RMBS		65,586			70,647			65,632			58,068			65,586			54,236			48,975			49,314			41,547			54,236
Total	$	175,529		$	182,797		$	172,861		$	156,698		$	175,529		$	148,765		$	135,001		$	135,529		$	123,050		$	148,765
Risk in force
Flow	$	96,040		$	97,858		$	92,830		$	85,349		$	96,040		$	81,490		$	74,328		$	74,956		$	70,773		$	81,490
RMBS		65,364			70,424			65,405			57,858			65,364			54,051			48,831			49,183			41,426			54,051
Total	$	161,404		$	168,282		$	158,235		$	143,207		$	161,404		$	135,541		$	123,159		$	124,139		$	112,199		$	135,541
Average loan size (U.S. $ in thousands)
Flow	$	172.3		$	170.7		$	161.5		$	150.7		$	172.3		$	145.6		$	134.8		$	128.2		$	122.5		$	145.6
RMBS	$	158.5		$	158.4		$	149.5		$	139.4		$	158.5		$	133.7		$	125.9		$	122.6		$	115.1		$	133.7
Total	$	166.9		$	165.7		$	156.7		$	146.3		$	166.9		$	141.0		$	131.5		$	126.1		$	119.9		$	141.0
Loss severity (quarterly)
Flow		21.7	%		22.4	%		21.4	%		22.1	%		22.0	%		20.5	%		21.9	%		18.2	%		15.8	%		20.5	%
RMBS		18.9	%		20.7	%		16.6	%		16.6	%		19.0	%		15.5	%		21.7	%		1.6	%		3.9	%		15.5	%
Total		21.6	%		22.2	%		20.8	%		21.7	%		21.7	%		19.9	%		21.9	%		18.2	%		15.3	%		19.9	%
Primary loans, defaults and default rates
Policies in force - Flow		638,135			656,969			664,099			654,296			638,135			649,261			638,139			672,347			665,336			649,261
Policies in force - RMBS		413,718			445,912			439,106			416,678			413,718			405,796			388,851			402,271			360,924			405,796
Policies in force - Total		1,051,853			1,102,881			1,103,205			1,070,974			1,051,853			1,055,057			1,026,990			1,074,618			1,026,260			1,055,057
Loans in default - Flow		2,139			2,426			2,712			2,642			2,139			2,021			1,826			1,478			1,314			2,021
Loans in default - RMBS		527			493			444			421			527			260			273			253			206			260
Loans in default - Total		2,666			2,919			3,156			3,063			2,666			2,281			2,099			1,731			1,520			2,281
Default rate - Flow		0.34	%		0.37	%		0.41	%		0.40	%		0.34	%		0.31	%		0.29	%		0.22	%		0.20	%		0.31	%
Default rate - RMBS		0.13	%		0.11	%		0.10	%		0.10	%		0.13	%		0.06	%		0.07	%		0.06	%		0.06	%		0.06	%
Default rate - Total		0.25	%		0.26	%		0.29	%		0.29	%		0.25	%		0.22	%		0.20	%		0.16	%		0.15	%		0.22	%
Net claims paid (U.S. $ in thousands)
Net claims paid - Flow	$	14,125		$	14,629		$	6,530		$	7,923		$	43,207		$	5,999		$	4,123		$	3,179		$	1,211		$	14,512
Net claims paid - RMBS		777			2,167			787			466			4,197			585			411			2			13			1,011
Net claims paid - Total	$	14,902		$	16,796		$	7,317		$	8,389		$	47,404		$	6,584		$	4,534		$	3,181		$	1,224		$	15,523
Number of claims paid - Flow		208			222			117			115			662			107			72			72			30			281
Number of claims paid - RMBS		14			25			13			11			63			11			8			1			1			21
Number of claims paid - Total		222			247			130			126			725			118			80			73			31			302
Average claim size- Flow (U.S. $ in thousands)	$	67.9		$	65.9		$	55.8		$	68.9		$	65.3		$	56.1		$	57.3		$	44.2		$	40.4		$	51.6
Average claim size- RMBS	$	55.5		$	86.7		$	60.5		$	42.4		$	66.6		$	53.2		$	51.4		$	1.5		$	13.6		$	48.1
Average claim size- Total	$	67.1		$	68.0		$	56.3		$	66.6		$	65.4		$	55.8		$	56.7		$	43.6		$	39.5		$	51.4

Page 17

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI EUROPE QUARTERLY FINANCIAL INFORMATION

	2007															2006
Income Statement Components - Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(U.S. dollars in thousands, unless otherwise noted)
Net premiums written	$	2,802		$	4,420		$	3,497		$	3,404		$	14,123		$	3,213		$	2,948		$	2,109		$	2,754		$	11,024
Revenues
Premiums earned	$	3,704		$	3,644		$	3,519		$	3,579		$	14,446		$	4,212		$	4,152		$	3,906		$	3,888		$	16,158
(Loss) income from credit default swaps:
Realized gains from credit default swaps		(1,087	)		176			1,579			1,828			2,496			2,687			978			2,128			1,638			7,431
Unrealized loss from credit default swaps		(8,396	)		(8,547	)		—			—			(16,943	)		—			—			—			—			—
Net (loss) income from credit default swaps		(9,483	)		(8,371	)		1,579			1,828			(14,447	)		2,687			978			2,128			1,638			7,431
Net investment income		1,919			2,080			2,225			2,408			8,632			2,326			2,410			2,260			2,284			9,280
Net realized investment gains (losses)		6			(267	)		(15	)		112			(164	)		47			650			446			21			1,164
Other loss		—			(8	)		(26	)		(100	)		(134	)		—			(2	)		(52	)		(53	)		(107	)
Total revenues		(3,854	)		(2,922	)		7,282			7,827			8,333			9,272			8,188			8,688			7,778			33,926
Losses and expenses
Losses and loss adjustment expenses		22,111			2,719			1,611			364			26,805			903			1,581			205			526			3,215
Amortization of deferred policy acquisition costs		2,617			341			284			227			3,469			274			234			194			153			855
Other underwriting and operating expenses		4,283			3,880			3,108			2,769			14,040			2,701			3,316			2,907			2,562			11,486
Total losses and expenses		29,011			6,940			5,003			3,360			44,314			3,878			5,131			3,306			3,241			15,556
(Loss) income before income taxes		(32,865	)		(9,862	)		2,279			4,467			(35,981	)		5,394			3,057			5,382			4,537			18,370
Income tax (benefit) expense		(3,281	)		(1,417	)		624			1,488			(2,586	)		1,888			1,070			1,884			1,588			6,430
Net (loss) income	$	(29,584	)	$	(8,445	)	$	1,655		$	2,979		$	(33,395	)	$	3,506		$	1,987		$	3,498		$	2,949		$	11,940
Net (loss) income (Euros in thousands)		(€21,715)			(€6,144)		€	1,227		€	2,272			(€24,360)		€	2,718		€	1,559		€	2,780		€	2,451		€	9,508
Loss Ratio (7)		596.9	%		74.6	%		45.8	%		10.2	%		185.6	%		21.4	%		38.1	%		5.2	%		13.5	%		19.9	%
Expense Ratio (7)		246.3	%		95.5	%		97.0	%		88.0	%		124.0	%		92.6	%		120.4	%		147.0	%		98.6	%		111.9	%
Combined Ratio		843.2	%		170.1	%		142.8	%		98.2	%		309.6	%		114.0	%		158.5	%		152.2	%		112.1	%		131.8	%
Balance Sheet Components - As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(U.S. dollars in thousands)															(U.S. dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	200,825		$	203,992		$	197,165		$	198,445					$	191,691		$	181,996		$	186,602		$	190,735
Cash and cash equivalents		53,335			47,715			36,316			23,662						23,648			24,410			18,580			30,182
Property, equipment and software, net of accumulated depreciation and amortization		1,323			1,317			1,293			1,344						1,407			1,384			1,220			296
Other assets		16,688			16,405			14,609			19,534						17,078			19,093			14,037			10,215
Total assets	$	272,171		$	269,429		$	249,383		$	242,985					$	233,824		$	226,883		$	220,439		$	231,428
Liabilities
Reserve for losses and loss adjustment expenses	$	41,579		$	20,634		$	18,083		$	17,587					$	17,907		$	16,907		$	16,015		$	15,246
Unearned premiums		22,983			23,347			21,390			21,117						21,043			21,169			22,572			23,118
Other liabilities		45,534			36,772			24,154			26,697						20,394			24,460			20,702			41,760
Total liabilities		110,096			80,753			63,627			65,401						59,344			62,536			59,289			80,124
Shareholder’s equity
Common stock, additional paid-in capital and retained earnings		107,341			136,926			145,371			135,715						132,736			129,230			127,243			123,745
Accumulated other comprehensive income, net of deferred taxes		54,734			51,750			40,385			41,869						41,744			35,117			33,907			27,559
Total shareholder’s equity		162,075			188,676			185,756			177,584						174,480			164,347			161,150			151,304
Total liabilities and shareholder’s equity	$	272,171		$	269,429		$	249,383		$	242,985					$	233,824		$	226,883		$	220,439		$	231,428

Page 18

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI ASIA QUARTERLY FINANCIAL INFORMATION

	2007															2006
Income Statement Components - Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006 (12)			3/31/2006 (12)			Total
	(U.S. dollars in thousands, unless otherwise noted)
Reinsurance premiums written	$	2,499		$	2,470		$	2,768		$	1,743		$	9,480		$	1,678		$	1,522		$	2,187		$	1,027		$	6,414
Revenues
Premiums earned	$	2,823		$	2,971		$	2,760		$	2,439		$	10,993		$	2,840		$	2,764		$	2,784		$	2,532		$	10,920
Net investment income and other loss		740			720			606			610			2,676			663			732			197			147			1,739
Total revenues		3,563			3,691			3,366			3,049			13,669			3,503			3,496			2,981			2,679			12,659
Losses and expenses
Losses and loss adjustment expenses (reversals)		(41	)		(38	)		21			15			(43	)		(218	)		(200	)		752			42			376
Amortization of deferred policy acquisition costs		211			174			192			171			748			158			149			150			140			597
Other underwriting and operating expenses		385			288			335			233			1,241			272			220			58			41			591
Total losses and expenses		555			424			548			419			1,946			212			169			960			223			1,564
Income before income taxes		3,008			3,267			2,818			2,630			11,723			3,291			3,327			2,021			2,456			11,095
Income tax expense		152			355			491			460			1,458			637			604			1,946			850			4,037
Net income	$	2,856		$	2,912		$	2,327		$	2,170		$	10,265		$	2,654		$	2,723		$	75		$	1,606		$	7,058
Net income (HK$ in thousands)	$	22,210		$	22,728		$	18,189		$	16,938		$	80,065		$	20,654		$	21,178		$	582		$	12,458		$	54,872
Loss Ratio (7)		(1.5	)%		(1.3	)%		0.8	%		0.6	%		(0.4	)%		(7.7	)%		(7.2	)%		27.0	%		1.7	%		3.4	%
Expense Ratio (7)		23.8	%		18.7	%		19.0	%		23.2	%		21.0	%		25.6	%		24.2	%		9.5	%		17.6	%		18.5	%
Combined Ratio		22.3	%		17.4	%		19.8	%		23.8	%		20.6	%		17.9	%		17.0	%		36.5	%		19.3	%		21.9	%
Balance Sheet Components -As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006
	(U.S. dollars in thousands)															(U.S. dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	66,366		$	64,195		$	57,114		$	54,255					$	54,916		$	52,648		$	3,937
Short term investments		641			1,413			2,052			3,570						3,952			6,064			8,400
Total investments	$	67,007		$	65,608		$	59,166		$	57,825					$	58,868		$	58,712		$	12,337
Cash and cash equivalents		3,580			3,274			9,748			6,209						3,554			1,578			5,429
Property, equipment and software, net of accumulated depreciation and amortization		129			159			167			152						140			—			—
Other assets		4,081			1,772			1,716			3,330						2,372			3,170			130
Total assets	$	74,797		$	70,813		$	70,797		$	67,516					$	64,934		$	63,460		$	17,896
Liabilities
Reserve for losses and loss adjustment expenses	$	230		$	230		$	251		$	230					$	223		$	480		$	771
Unearned premiums		21,583			21,973			22,353			22,364						23,167			24,291			—
Other liabilities		1,605			1,654			5,155			3,173						1,126			1,163			642
Total liabilities		23,418			23,857			27,759			25,767						24,516			25,934			1,413
Shareholder’s equity
Common stock, additional paid-in capital and retained earnings		49,318			46,462			43,549			41,222						39,053			36,349			16,412
Accumulated other comprehensive income (loss), net of deferred taxes		2,061			494			(511	)		527						1,365			1,177			71
Total shareholder’s equity		51,379			46,956			43,038			41,749						40,418			37,526			16,483
Total liabilities and shareholder’s equity	$	74,797		$	70,813		$	70,797		$	67,516					$	64,934		$	63,460		$	17,896

Page 19

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI EUROPE STATISTICAL INFORMATION

	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total (13)			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total (13)
	(U.S. dollars in millions, except claims paid)
New insurance written	$	236		$	132		$	141		$	136		$	645		$	160		$	62		$	24		$	32		$	278
New credit default swaps written	$	12,067		$	1,919		$	—		$	—		$	13,986		$	5,994		$	7,910		$	—		$	629		$	14,533
New reinsurance written	$	617		$	1,402		$	1,778		$	504		$	4,301		$	1,028		$	2,248		$	379		$	627		$	4,282
Insurance in force	$	62,929		$	51,707		$	48,120		$	48,121		$	62,929		$	48,467		$	49,976		$	39,996		$	39,254		$	48,467
Risk in force	$	9,420		$	5,711		$	3,813		$	3,824		$	9,420		$	3,850		$	4,441		$	2,836		$	2,760		$	3,850
Claims paid including credit default swaps (in thousands)	$	2,898		$	3,207		$	2,577		$	1,547		$	10,229		$	1,095		$	1,228		$	919		$	644		$	3,886
PMI ASIA STATISTICAL INFORMATION
	2007															2006
	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total (13)			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total (13)
	(U.S. dollars in millions, except claims paid and average claim size)
New reinsurance written	$	256		$	220		$	212		$	167		$	855		$	156		$	234		$	105		$	105		$	600
Insurance in force	$	2,724		$	2,663		$	2,596		$	2,526		$	2,724		$	2,484		$	2,450		$	2,441		$	2,424		$	2,484
Risk in force	$	310		$	314		$	309		$	306		$	310		$	306		$	308		$	313		$	314		$	306
Policies in force		11,773			11,530			11,437			11,189			11,773			11,039			10,889			10,810			10,759			11,039
Loans in default		14			14			16			16			14			16			16			24			18			16
Default rate		0.12	%		0.12	%		0.14	%		0.14	%		0.12	%		0.14	%		0.15	%		0.22	%		0.17	%		0.14	%
Claims paid (in thousands)	$	24		$	—		$	—		$	9		$	33		$	39		$	89		$	27		$	25		$	180
Number of claims paid		1			—			—			1			2			2			4			1			1			8
Average claim size (in thousands)	$	24		$	—		$	—		$	9		$	17		$	20		$	22		$	27		$	25		$	23

Page 20

THE PMI GROUP, INC. AND SUBSIDIARIES

FINANCIAL GUARANTY SEGMENT ⁽³⁾ RESULTS OF OPERATIONS AND BALANCE SHEETS

	2007															2006
Income Statement Components - Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(Dollars in thousands)															(Dollars in thousands)
Net premiums written	$	396		$	202		$	1,414		$	4,741		$	6,753		$	1,590		$	—		$	—		$	—		$	1,590
Revenues
Premiums earned	$	436		$	438		$	552		$	207		$	1,633		$	1		$	—		$	—		$	—		$	1
Net investment income		2,250			2,321			2,314			2,321			9,206			2,036			(1	)		2			—			2,037
Net realized investment losses		3			(354	)		—			—			(351	)		—			—			—			—			—
Impairment of unconsolidated subsidiary (15)		(38,499	)		—			—			—			(38,499	)
Total revenues (including equity in losses)		(35,810	)		2,405			2,866			2,528			(28,011	)		2,037			(1	)		2			—			2,038
Losses and expenses
Losses and loss adjustment expenses		2,649			—			—			—			2,649			—			—			—			—			—
Amortization of deferred policy acquisition costs		313			274			269			102			958			1			—			—			—			1
Other underwriting and operating expenses		1,112			507			432			454			2,505			716			—			—			—			716
Interest expense (11)		731			731			732			731			2,925			569			—			—			—			569
Total losses and expenses		4,805			1,512			1,433			1,287			9,037			1,286			—			—			—			1,286
(Loss) income before equity in (losses) earnings from unconsolidated subsidiaries and income taxes		(40,615	)		893			1,433			1,241			(37,048	)		751			(1	)		2			—			752
Equity in (losses) earnings from unconsolidated subsidiaries:
Equity in (losses) earnings excluding gains and losses on credit derivative contracts		(320,082	)		29,542			35,302			31,577			(223,661	)		30,910			26,247			26,625			23,301			107,083
Net realized and unrealized (losses) gains on credit derivative contracts		(474,555	)		(56,283	)		(4,460	)		126			(535,172	)		43			302			(149	)		(66	)		130
Equity in (losses) earnings from unconsolidated subsidiaries		(794,637	)		(26,741	)		30,842			31,703			(758,833	)		30,953			26,549			26,476			23,235			107,213
(Loss) income before income taxes		(835,252	)		(25,848	)		32,275			32,944			(795,881	)		31,704			26,548			26,478			23,235			107,965
Income tax (benefit) expense		(69,096	)		(1,456	)		3,261			3,080			(64,211	)		3,281			2,820			2,469			2,136			10,706
Net (loss) income	$	(766,156	)	$	(24,392	)	$	29,014		$	29,864		$	(731,670	)	$	28,423		$	23,728		$	24,009		$	21,099		$	97,259
Balance Sheet Components - As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
				(Dollars in thousands)															(Dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	167,915		$	167,276		$	165,422		$	133,461					$	77,803		$	113		$	108		$	—
Equity securities: preferred		22,465			26,880			25,131			24,459						16,025			—			—			—
Total investments	$	190,380		$	194,156		$	190,553		$	157,920					$	93,828		$	113		$	108		$	—
Cash and cash equivalents		11,252			11,610			15,414			56,260						116,449			1,890			1,887			—
Investments in unconsolidated subsidiaries		163,661			984,417			996,431			977,523						950,249			916,659			867,923			850,686
Property, equipment and software, net of accumulated depreciation and amortization		187			131			132			133						—			—			—			—
Other assets		56,828			7,740			7,594			7,464						4,292			1			3			—
Total assets	$	422,308		$	1,198,054		$	1,210,124		$	1,199,300					$	1,164,818		$	918,663		$	869,921		$	850,686
Liabilities
Reserve for losses and loss adjustment expenses	$	2,650		$	—		$	—		$	—					$	—		$	—		$	—		$	—
Unearned premiums		6,709			6,748			6,984			6,123						1,589			—			—			—
Long-term debt		50,000			50,000			50,000			50,000						50,000			—			—			—
Other liabilities		2,892			37,766			40,817			45,745						41,440			26,051			23,421			21,148
Total liabilities		62,251			94,514			97,801			101,868						93,029			26,051			23,421			21,148
Shareholder’s equity
Common stock, additional paid-in capital and retained earnings		348,388			1,105,295			1,114,767			1,097,493						1,071,865			892,610			846,502			829,538
Accumulated other comprehensive (loss) income, net of deferred taxes		11,669			(1,755	)		(2,444	)		(61	)					(76	)		2			(2	)		—
Total shareholder’s equity		360,057			1,103,540			1,112,323			1,097,432						1,071,789			892,612			846,500			829,538
Total liabilities and shareholder’s equity	$	422,308		$	1,198,054		$	1,210,124		$	1,199,300					$	1,164,818		$	918,663		$	869,921		$	850,686

Page 21

THE PMI GROUP, INC. AND SUBSIDIARIES

CORPORATE AND OTHER SEGMENT ⁽⁴⁾ RESULTS OF OPERATIONS AND BALANCE SHEETS

	2007															2006
Income Statement Components - Quarter Ended	12/31/2007			9/30/2007			6/30/2007			3/31/2007			Total			12/31/2006			9/30/2006			6/30/2006			3/31/2006			Total
	(Dollars in thousands)															(Dollars in thousands)
Net premiums written	$	19		$	14		$	7		$	12		$	52		$	19		$	16		$	11		$	10		$	56
Revenues
Premiums earned	$	10		$	18		$	16		$	13		$	57		$	12		$	19		$	16		$	18		$	65
Net investment income		1,400			1,935			2,258			2,832			8,425			3,643			5,157			6,324			6,405			21,529
Net realized investment losses		(1	)		(1,886	)		(620	)		(726	)		(3,233	)		(248	)		(4,346	)		(1	)		(40	)		(4,635	)
Settlement gain on sale of unconsolidated subsidiary (16)		12,670			—			—			—			12,670			—			—			—			—			—
Other income		3,270			4,563			4,769			1,706			14,308			2,829			3,204			3,714			3,779			13,526
Total revenues		17,349			4,630			6,423			3,825			32,227			6,236			4,034			10,053			10,162			30,485
Losses and expenses
Losses and loss adjustment expenses		—			—			—			—			—			1			(3	)		—			—			(2	)
Other underwriting and operating expenses (6)		18,400			16,918			19,925			24,013			79,256			29,085			22,359			19,443			22,866			93,753
Interest expense		7,619			7,591			7,627			7,522			30,359			11,753			9,361			8,066			8,179			37,359
Total losses and expenses		26,019			24,509			27,552			31,535			109,615			40,839			31,717			27,509			31,045			131,110
Loss before equity in earnings (losses) from unconsolidated subsidiaries and income taxes		(8,670	)		(19,879	)		(21,129	)		(27,710	)		(77,388	)		(34,603	)		(27,683	)		(17,456	)		(20,883	)		(100,625	)
Equity in earnings (losses) from unconsolidated subsidiaries		8			(28	)		289			(55	)		214			(124	)		(68	)		82			(102	)		(212	)
Loss before income taxes		(8,662	)		(19,907	)		(20,840	)		(27,765	)		(77,174	)		(34,727	)		(27,751	)		(17,374	)		(20,985	)		(100,837	)
Income tax benefit		(6,528	)		(8,869	)		(6,015	)		(7,932	)		(29,344	)		(9,581	)		(7,978	)		(5,319	)		(6,521	)		(29,399	)
Net loss	$	(2,134	)	$	(11,038	)	$	(14,825	)	$	(19,833	)	$	(47,830	)	$	(25,146	)	$	(19,773	)	$	(12,055	)	$	(14,464	)	$	(71,438	)
Balance Sheet Components - As of Quarter End	12/31/2007			9/30/2007			6/30/2007			3/31/2007						12/31/2006			9/30/2006			6/30/2006			3/31/2006
	(Dollars in thousands)															(Dollars in thousands)
Assets
Investments - available-for-sale, at fair value:
Fixed income securities	$	52,974		$	53,088		$	53,120		$	53,849					$	56,135		$	129,727		$	153,702		$	167,432
Equity securities: common		1,242			1,275			3,477			4,250						—			—			—			—
Short term investments		1,300			1,301			1,300			1,300						1,300			98,491			117,295			116,362
Total investments	$	55,516		$	55,664		$	57,897		$	59,399					$	57,435		$	228,218		$	270,997		$	283,794
Cash and cash equivalents		51,512			45,335			163,700			100,574						143,033			507,569			155,572			295,408
Investments in unconsolidated subsidiaries		14,914			15,158			15,224			15,200						17,735			18,814			19,283			18,803
Property, equipment and software, net of accumulated depreciation and amortization		79,142			79,594			80,807			81,867						82,987			83,822			85,212			86,131
Other assets		49,657			39,901			42,165			14,222						23,861			24,851			32,271			38,143
Total assets	$	250,741		$	235,652		$	359,793		$	271,262					$	325,051		$	863,274		$	563,335		$	722,279
Liabilities
Unearned premiums	$	29		$	21		$	25		$	33					$	34		$	27		$	31		$	36
Debt		446,593			446,593			446,593			446,593						446,593			1,264,435			819,529			819,529
Other (assets)		(515	)		(16,256	)		(2,423	)		(76,061	)					(65,622	)		(26,187	)		(43,410	)		(32,873	)
Total liabilities		446,107			430,358			444,195			370,565						381,005			1,238,275			776,150			786,692
Shareholder’s equity
Common stock, additional paid-in capital, treasury stock and retained earnings		(190,290	)		(191,753	)		(65,912	)		(92,503	)					(52,925	)		(368,806	)		(190,462	)		(46,502	)
Accumulated other comprehensive loss, net of deferred taxes		(5,076	)		(2,953	)		(18,490	)		(6,800	)					(3,029	)		(6,195	)		(22,353	)		(17,911	)
Total shareholder’s deficit		(195,366	)		(194,706	)		(84,402	)		(99,303	)					(55,954	)		(375,001	)		(212,815	)		(64,413	)
Total liabilities and shareholder’s equity (deficit)	$	250,741		$	235,652		$	359,793		$	271,262					$	325,051		$	863,274		$	563,335		$	722,279

Page 22

EX-99.2

The PMI Group, Inc.

Supplemental Portfolio Information

As of December 31, 2007

Exhibit 99.2

2

The PMI Group, Inc.

Forward-Looking Statement

Cautionary Statement: Statements in this presentation that are not historical facts or that relate to

future plans, events or performance are "forward-looking" statements within the meaning of the

Private Securities Litigation Reform Act of 1995. Forward-looking statements in this presentation

include our discussion and estimate of future captive reinsurance claim payments to us by captive

reinsurers.  Forward-looking statements are subject to a number of risks and uncertainties

including,

but

not

limited

to,

the

following

factors:

changes

in

economic

conditions,

economic

recession or slowdowns, adverse changes in consumer confidence, declining housing values,

higher unemployment, deteriorating borrower credit, changes in interest rates, changes in housing

demand or mortgage originations, changes in credit spreads, credit market disruptions including

further deterioration in the housing, mortgage and related credit markets, the loss of a key

customer, increased severity or frequency of losses associated with our mortgage insurance and

other credit enhancement products, losses associated with the aging of our mortgage insurance

portfolio,

ratings

actions

with

respect

to

our

or

our

subsidiaries’

credit

ratings

or

insurer

financial

strength ratings assigned by the major ratings agencies, heightened competition from other

insurance providers, federal and state governmental or quasi-governmental entities, and from

alternative

products

to

private

mortgage

insurance

and

financial

guaranty

insurance,

changes

in

the charters or business practices of Fannie Mae and Freddie Mac, changes in political and

regulatory environments and the application of consumer, lending, insurance and other applicable

laws and regulations, the possibility that we may fail to estimate accurately the likelihood,

magnitude and timing of losses in connection with establishing loss reserves for our mortgage

insurance or financial guaranty businesses or to estimate accurately the fair value amounts of

derivative contracts in determining gains and losses on these contracts, limitations on the amount

of dividends that The PMI Group may receive from its insurance subsidiaries, or a combination of

these and other factors.  Other risks and uncertainties are discussed in our SEC filings, including

our

Annual

Report

Form

10-K

for

the

year

ended

December

31,

2007

(in

Item

1A).

We

undertake

no obligation to update forward-looking statements.

3

The PMI Group, Inc.

Definition of Terms

2/28s

–

refers to loans with interest rates that are fixed for two years and reset to a new interest rate at the end of year two

for the remaining term of the loan. 

ARMs

–

refers to loans with adjustable interest rates.  We consider a loan an ARM if its interest rate may be adjusted prior

to the loan’s fifth anniversary. 

A Quality Loans

–

we define A quality to include loans with credit scores of 620 and greater. 

Alt-A Loans

–

we consider a loan Alt-A if it has a credit score of 620 or greater and the borrower requests and is given the

option of providing reduced documentation verifying income, assets, deposit information and/or employment.

Captive Reinsurance

–

refers to agreements in which a portion of risk insured by PMI is reinsured by a captive reinsurance

company affiliated with the mortgage originator or investor.  

Defaults

–

our

primary

mortgage

insurance

master

policy

defines

“default”

as

the

borrower’s

failure

to

pay

when

due

an

amount

equal

to

the

scheduled

monthly

mortgage

payment

under

the

terms

of

the

mortgage.

Generally,

the

master

policies require an insured to notify PMI of a default no later than the last business day of the month following the month

in

which

the

borrower

becomes

three

monthly

payments

in

default.

For

reporting

purposes

and

internal

tracking

purposes, we do not consider a loan to be in default until the borrower has missed to consecutive payments.  Depending

upon its scheduled payment date, a loan delinquent for two consecutive monthly payments could be reported to PMI

between

the

31st

and

the

60th

day

after

a

missed

payment.

Flow

–

generally refers to mortgage insurance offered on a loan-by-loan basis to lenders. 

GSE Pool –

refers to a traditional pool product for mortgage loans sold by PMI’s customers to the GSEs.  This product was

available from 1997 to 2001.

Interest

Only

Loans

–

refers

to

loans

that

do

not

reduce

principal

during

the

initial

deferral

period

(usually

between

two

and

ten years) and therefore do not accumulate equity through loan amortization during the initial deferral period. 

Approximately 91% of our interest only loans have an initial deferral period of 5 years or greater.  The average initial

deferral period for loans insured in 2007 was 9 years.

Insurance in Force (IIF)

–

refers to the current principal balance of all outstanding mortgage loans with insurance coverage

as of a given date.

Less-than-A Quality Loans

–

we define less-than-A credit quality loans to include loans with credit scores of 619 or below.

The majority of our less-than-A-quality loans have credit scores above 575.

4

The PMI Group, Inc.

Definition of Terms

Modified Pool Insurance

–

modified pool insurance may be used in addition to primary mortgage insurance or may be

placed

on

loans

that

do

not

require

primary

insurance.

Coverage

of

modified

pool

products

varies.

Some

products

provide first loss protection by covering a percentage of the losses on individual loans held within the pool of insured

loans up to a stated aggregate loss limit (“stop loss limit”) for the entire pool.  Some modified pool products offer

mezzanine-level coverage by providing for claims payments only after a predetermined cumulative claims level, or

deductible, is reached.

New Insurance Written (NIW)

–

refers to the original principal balance of all loans that receive new primary mortgage

insurance coverage during a given period. 

New Risk Written (NRW)

–

refers to the aggregate dollar amount of each insured mortgage loan’s current principal balance

multiplied

by

the

insurance

coverage

percentage

specified

in

the

policy

for

all

loans

that

receive

new

primary

mortgage

insurance coverage during a given period.

Old Pool –

refers to a traditional pool product for mortgage loans sold by PMI’s customers to capital market participants.

Payment Option ARMs

–

generally refers to loans that provide the borrower an option every month to make a payment

consisting of principal and interest, interest only, or an amount established by the lender that may be less than the

interest owed.  

Primary

Insurance

–

refers

to

mortgage

insurance

placed

on

a

loan-by-loan

basis

through

our

“flow”

channel

and

mortgage

insurance issued for mortgage-backed securities and portfolio investors through our “structured transactions”

channel.  

Primary information does not include pool or modified pool information.

Primary Risk in Force

–

refers to the aggregate dollar amount of each insured mortgage loan’s current principal balance

multiplied by the insurance coverage percentage specified in the

policy for insurance policies issued through our “flow”

and “structured transactions”

channels only.

Risk in Force (RIF) –

refers to the aggregate dollar amount of each insured mortgage loan’s current principal balance

multiplied by the insurance coverage percentage specified in the

policy.

Structured

–

generally refers to mortgage insurance offered by PMI that covers large portfolios of mortgage loans and is

provided to issuers of mortgage backed securities (“MBS”) and portfolio investors. 

Traditional Pool

–

covers the entire loss on a defaulted mortgage loan that exceeds the claim payment under any primary

insurance

coverage,

up

to

a

stated

aggregate

loss

limit,

or

stop

loss,

for

all

of

the

loans

in

a

pool.

PMI

is

not

currently

offering traditional pool insurance to its customers.

5

The PMI Group, Inc.

Contents of Presentation

PMI Australia Portfolio Characteristics

Part 6

Primary Portfolio Characteristics by Vintage

Part 3 

Focus on Particular Portfolio Segments

Part 2

Primary Portfolio Characteristics

Part 1

Captive Reinsurance Arrangements

Part 5

Modified Pool Portfolio

Part 4

PMI Guaranty Portfolio Characteristics

Part 7

Primary Portfolio

Characteristics

7

The PMI Group, Inc.

1.4%

1.0%

0.5%

1.8%

3.9%

10.7%

10.5%

15.4%

19.6%

35.2%

0%

10%

20%

30%

40%

50%

Prior to 1999

1999

2000

2001

2002

2003

2004

2005

2006

2007

$123.6 Billion Primary IIF

$31.0 Billion Primary RIF

U.S. Portfolio Age Distribution

Average

Rate  (1)

(1)

Average PMI fixed annual mortgage interest rate

1.4%

1.0%

0.5%

1.7%

3.8%

10.3%

10.8%

15.6%

20.0%

35.0%

0%

10%

20%

30%

40%

50%

Prior to 1999

1999

2000

2001

2002

2003

2004

2005

2006

2007

7.10%

6.31%

6.15%

6.00%

6.86%

7.52%

8.48%

7.34%

8.05%

Note: Due to rounding, the sum of percentages may not total 100%

7.17%

8

The PMI Group, Inc.

Primary Risk in Force by FICO Score

8.6%

7.8%

6.8%

5.9%

32.7%

33.8%

34.6%

34.7%

23.3%

23.4%

24.1%

30.5%

30.3%

30.7%

31.5%

32.7%

3.3%

3.0%

2.5%

2.2%

2.1%

5.9%

33.1%

24.6%

25.1%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

Less than 575

720 and above

680 -

719

620 -

679

575 -

619

U.S. Portfolio Credit Score Distribution

Excludes unreported FICO scores

9

The PMI Group, Inc.

LTVs

between 85.01% and 90%

Primary Risk in Force by Loan to Value

9.4%

9.2%

9.3%

7.1%

37.6%

36.4%

33.7%

31.0%

7.4%

6.6%

5.3%

4.6%

8.6%

11.9%

14.3%

8.9%

37.9%

35.0%

37.4%

35.9%

37.0%

29.5%

3.8%

24.6%

17.6%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

LTVs

above 97%

LTVs

between 95.01% and 97%

LTVs

between 90.01% and 95%

LTVs

of 85% and below

U.S. Portfolio Loan to Value Distribution

Note: Due to rounding, the sum of percentages may not total 100%

10

The PMI Group, Inc.

U.S. Portfolio Geographic Distribution

1

Top ten states as determined by primary RIF on December 31, 2007

10.8%

7.2%

8.1%

5.0%

3.8%

3.3%

3.6%

3.0%

4.7%

3.1%

Florida

10.8%

10.56%

3.44%

3.91%

California

8.1%

10.92%

3.56%

2.34%

Texas

7.2%

6.03%

5.63%

6.47%

Illinois

5.0%

8.19%

5.58%

5.41%

Georgia

4.7%

9.50%

7.86%

8.16%

% of RIF¹

2007

2006

2005

Ohio

3.8%

10.83%

8.79%

7.68%

New York

3.6%

6.78%

5.40%

4.93%

Pennsylvania

3.3%

7.47%

6.00%

5.93%

Washington

3.1%

3.58%

2.76%

2.99%

New Jersey

3.0%

7.53%

4.62%

4.74%

% of RIF¹

2007

2006

2005

Top Ten States –

Percent of Primary Risk in Force and Default Rates

Primary Default Rates

Primary Default Rates

11

The PMI Group, Inc.

U.S. Portfolio Primary NIW Characteristics

18%

17%

18%

15%

39%

38%

43%

42%

28%

30%

24%

21%

11%

12%

10%

31%

24%

3%

2%

4%

2%

5%

13%

19%

32%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

Flow and Structured Primary

NIW

New Insurance Written by LTV

New Risk Written by LTV

Note: Due to rounding, the sum of percentages may not total 100%

Flow Primary NIW

Structured Primary NIW

90.01 –

95%

85.01 –

90%

85 and below

Above 97%

95.01%-

97%

The increased percentage of above 97% LTV loans in

2007 is due to the reduced availability of alternative

mortgage products including piggyback loans and

increased activity by the GSEs.

Effective March 1, 2008, PMI will no longer insure loans

with LTV ratios above 97%.

9%

11%

12%

10%

37%

35%

42%

41%

34%

34%

27%

24%

13%

15%

6%

30%

27%

2%

2%

5%

2%

7%

18%

24%

35%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

90.01 –

95%

85.01 –

90%

85 and below

Above 97%

95.01%-

97%

50.2

36.3

28.2

23.3

37.6

7.1

4.9

7.7

8.9

8.6

$57.3

$41.2

$35.9

$46.1

$32.2

$0

$10

$20

$30

$40

$50

$60

2003

2004

2005

2006

2007

12

The PMI Group, Inc.

U.S. Portfolio Primary NIW Characteristics

Refinances and Purchases as a %

of Primary NIW

Less-Than-A Quality Loans -

NIW

Alt-A Loans –

NIW

Note: Due to rounding, the sum of percentages may not total 100%

Refinances

Purchases

Less-Than-A Quality Loans              

-

Structured  Channel

Less-Than-A Quality Loans 

–

Flow Channel

Less-Than-A Quality Loans as a

percentage of Total Primary NIW

Alt-A Loans –

Flow Channel

Alt-A Loans as a %

of Total Primary NIW

Alt-A Loan –

Structured  Channel

The increase in less-than-A quality loans as a percentage

of total primary NIW is due to the GSEs’

expansion of

high-LTV, lower FICO programs.

Effective October 1, 2007, PMI discontinued insuring

loans with LTVs

above 95% and FICO scores below 620. 

63%

64%

64%

68%

55%

37%

36%

36%

32%

45%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

1,153

3,067

838

2,703

1,588

3,618

1,605

1,780

1,084

2,501

$6,119

$4,483

$2,672

$4,672

$1,991

11%

11%

7%

6%

10%

$0

$2,000

$4,000

$6,000

$8,000

2003

2004

2005

2006

2007

0%

5%

10%

15%

20%

11,242

1,397

6,691

7,304

7,425

4,984

4,410

1,204

3,002

860

$5,844

$8,508

$10,427

$12,639

$11,101

10%

21%

29%

34%

27%

$0

$4,000

$8,000

$12,000

2003

2004

2005

2006

2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

13

The PMI Group, Inc.

Interest Only Loans -

NIW

Payment Option ARMs -

NIW

U.S. Portfolio  Primary NIW Characteristics

Payment  Option

ARMS  –

Flow

Channel

Total Payment Option ARMs as

a percentage of Total Primary

NIW

Interest Only 

–

Structured 

Channel

Interest Only 

–

Flow

Channel

Total Interest Only

Loans as a percentage

of Total Primary NIW

ARMs -

NIW

ARM amounts Primary

NIW –

Flow Channel

ARM amounts Primary

NIW –

Structured Channel

ARMs as a  percentage

of Total Primary NIW

Approximately 3% of Total Primary RIF is subject to rate

adjustment in 2008.  Approximately 1% is subject to

adjustment in 2009.

Approximately 98% of interest only loans written in 2007

have an initial deferral period of 5 years or greater and

85% have an initial deferral period of 7 years or greater. 

For 2006 NIW, initial deferral periods of 5 and 7 years or

greater were 89% and 62%, respectively.

3,802

2,238

1,907

6,992

6,024

3,938

4,081

3,262

5,889

1,481

$5,419

$10,254

$11,913

$4,145

$7,883

9%

25%

33%

24%

9%

$0

$4,000

$8,000

$12,000

2003

2004

2005

2006

2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

8,296

1,025

1,533

3,507

3,235

410

2,329

2,386

$9,321

$5,836

$5,621

$1,943

20%

18%

16%

5%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

2004

2005

2006

2007

0%

5%

10%

15%

20%

25%

2,799

2,617

1,252

952

3%

2%

8%

8%

$0

$1,000

$2,000

$3,000

2004

2005

2006

2007

0%

5%

10%

Focus on Particular

Portfolio Segments

15

The PMI Group, Inc.

High LTV

Alt-A

Distressed Markets

Summary of Underwriting Guideline Changes

PMI no longer insures

loans with

the following characteristics:

•

LTVs

and combined LTVs

of

97.01% and above

•

LTVs

greater than 95 percent

and FICO scores below 620 

PMI will insure

interest-only

loans with LTVs

of 95.01% to

97% that are:

•

Originated in compliance

with Fannie Mae or Freddie

Mac product or programs,

and

•

Have a minimum interest-

only term of five years, and

•

The borrower is qualified at

the fully amortizing payment

rate.

Maximum LTV of 90% (further

reduced by 5% in distressed

markets)

Minimum FICO score of 680

No investment properties

allowed

No payment option ARMs

allowed

At least 50% of qualifying

income must come from non-

salaried sources

In distressed markets, PMI         

no longer insures

loans with the

following characteristics:

•

LTV or combined LTV greater

than 90 percent

•

Payment option ARMS or A-

minus (FICO scores of 575-

619) loans

For products or programs with a

minimum LTV of 90%, a further 5

percentage point reduction is

required

For example, PMI no longer

insures limited documentation

loans with an LTV greater than

85% in distressed markets

16

The PMI Group, Inc.

1.53%

0.58%

0.46%

0.76%

0.11%

0.50%

0.20%

0.20%

0.40%

0%

1%

2%

3%

4%

2008

2009

2010

`

U.S. Portfolio Interest Rate Adjustments

1.50%

0.41%

0.27%

0.71%

0.67%

0.44%

0.99%

0%

1%

2%

3%

4%

2008

2009

2010

Rate Adjustments                    

by Credit Quality

Rate Adjustments of         

Hybrid Loans and Other ARMs

Rate Adjustments in

Distressed Geographic

Regions

1.33%

0.49%

0.37%

1.72%

0.43%

0.15%

0.15%

0.17%

0.19%

0%

1%

2%

3%

4%

2008

2009

2010

Other ARMs

3/27s

2/28s

Prime

Alt-A

Less than A Quality

Note: 2/28s resets in 2009 and 2010 are 0.01% and 0.00%, respectively

California

All Other

Florida

Auto States

Note: Auto states include Michigan, Ohio, Illinois and Indiana

0.08%

0.09%

0.08%

Note: Percentages are of total Primary RIF at December 31, 2007

2008

2009

2010

Total interest rate adjustments as a percentage of primary risk in force:

3.2%

1.1%

0.7%

17

The PMI Group, Inc.

California

at December 31, 2007

1 Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

% of 

CA RIF

% of

Total RIF

% of 

CA RIF

% of

Total RIF

FICO Scores²

720 and above 

32.3%

2.6%

680-719

31.1%

2.5%

620-679

33.0%

2.7%

575-619

2.7%

0.2%

Less than 575

0.7%

0.1%

Loan to Value

Above 97.00%

17.2%

1.4%

95.01% to 97.00%

1.8%

0.1%

90.01% to 95.00%

23.8%

1.9%

85.01% to 90.00%

44.0%

3.6%

85.00% and below

13.1%

1.1%

$2.5 Billion of Total Risk in Force

8.1% of PMI’s Primary Risk in Force

$301,386 Average Loan Size

Loan Type

Fixed Rate

66.9%

5.4%

ARM

33.1%

2.7%

Property Type¹

Single Family

82.2%

6.7%

Condominium

13.2%

1.1%

Multi-Family and other

4.6%

0.4%

Occupancy

Primary Residence

90.9%

7.4%

Second Home

2.6%

0.2%

Non-owner occupied

6.5%

0.5%

Alt-A

44.1%

3.6%

MSA Distribution of Total Primary RIF

Santa

Ana

–

Anaheim

–

Irvine

–

0.4%

San

Diego

–

Carlsbad

–

San

Marcos

–

0.6%

Sacramento

–

Arden-Arcade

–

Roseville

–

0.7%

Riverside

–

San

Bernardino

–

Ontario

–

1.8%

Los

Angeles

–

Long

Beach

–

Glendale

–

1.6%

18

The PMI Group, Inc.

Loan Type

Fixed Rate

82.5%

8.9%

ARM

17.5%

1.9%

Property Type¹

Single Family

71.8%

7.7%

Condominium

25.9%

2.8%

Multi-Family and other

2.2%

0.2%

Occupancy

Primary Residence

77.8%

8.4%

Second Home

12.2%

1.3%

Non-owner occupied

10.0%

1.1%

Alt-A

39.2%

4.2%

Florida

at December 31, 2007

1 Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

FICO Scores²

720 and above 

34.3%

3.7%

680-719

28.1%

3.0%

620-679

31.7%

3.4%

575-619

4.2%

.5%

Less than 575

1.3%

.1%

Loan to Value

Above 97.00%

21.8%

2.3%

95.01% to 97.00%

2.5%

0.3%

90.01% to 95.00%

30.9%

3.3%

85.01% to 90.00%

38.5%

4.2%

85.00% and below

6.3%

0.7%

% of 

FL RIF

% of

Total RIF

% of 

FL RIF

% of

Total RIF

$3.3 Billion of Total Risk in Force

10.8% of PMI’s Primary Risk in Force

$177,999 Average Loan Size

MSA Distribution of Total Primary RIF

Jacksonville

–

0.7%

Fort

Lauderdale

–

Pompano

Beach

–

Deerfield

Beach

–

1.2%

Tampa

–

St.

Petersburg

–

Clearwater

–

1.5%

Orlando

–

Kissimmee

–

1.7%

Miami

–

Miami

Beach

–

Kendall

–

1.7%

19

The PMI Group, Inc.

Loan Type

Fixed Rate

87.2%       11.9%

ARM

12.8%

1.7%

Property Type¹

Single Family

83.6%       11.4%

Condominium

11.8%

1.6%

Multi-Family and other

4.5%

0.6%

Occupancy

Primary Residence

91.8%       12.5%

Second Home

1.3%

0.2%

Non-owner occupied

6.9%

0.9%

Alt-A

15.5%

2.1%

Auto States

(Michigan, Ohio, Illinois, Indiana)

at

December 31, 2007

1 Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

% of  Auto

States RIF

% of

Total RIF

% of  Auto

States RIF

% of

Total RIF

FICO Scores²

720 and above 

30.6%

4.2%

680-719

23.3%

3.2%

620-679

34.9%        4.7%

575-619

7.2%

1.0%

Less than 575

3.4%

0.5%

Loan to Value

Above  97.00%

22.7%

3.1%

95.01% to 97.00%

5.1%

0.7%

90.01% to 95.00%

30.5%

4.2%

85.01% to 90.00%

33.8%

4.6%

85.00% and below

7.8%

1.1%

$4.2 Billion of Total Risk in Force

13.6% of PMI’s Primary Risk in Force

$132,202 Average Loan Size

MSA Distribution of Total Primary RIF

Indianapolis

–

Carmel,

IN

–

0.7%

Columbus,

OH

–

0.8%

Warren

–

Troy

–

Farmington

Hills,

MI

–

0.9%

Cleveland

–

Elyria

–

Mentor,

OH

–

1.0%

Chicago

–

Naperville

–

Joliet,

IL

–

3.8%

20

The PMI Group, Inc.

Notes

2/28 Hybrid ARMS

at December 31, 2007

1Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

FICO Scores²

720 and above 

12.6%

0.4%

680-719

22.4%

0.7%

620-679

51.3%        1.7%

575-619

8.8%

0.3%

Less than 575

4.9%

0.2%

Loan to Value

Above 97.00%

10.1%

0.3%

95.01% to 97.00%

0.1%

0.0%

90.01%  to 95.00%

21.8%

0.7%

85.01% to 90.00%

37.7%

1.3%

85.00% and below

30.3%

1.0%

% of 

2/28 RIF

% of

Total RIF

% of

Total RIF

% of 

2/28 RIF

$1 Billion of Total Risk in Force

3.3% of PMI’s Primary Risk in Force

$184,442 Average Loan Size

2/28 Hybrid ARMs that are subject to

reset in 2008 represent approximately

1% of Total Primary RIF.

2/28 hybrid ARMs monthly reported

notices of default peaked in late 2007. 

Property Type¹

Single Family

80.6%         2.7%

Condominium

6.8%

0.2%

Multi-Family and other

12.6%

0.4%

Occupancy

Primary Residence

74.6%         2.5%

Second Home

2.3%

0.1%

Non-owner occupied

23.1%

0.8%

Alt-A

45.5%

1.5%

State Distribution of Bulk 2/28s RIF

0.00% to 1.00%

1.00% to 2.00%

2.00% to 5.00%

5.00% to 10.00%

>10.00%

21

The PMI Group, Inc.

California

29.9%

1.0%

Florida

8.7%

0.3%

Michigan

5.7%

0.2%

Illinois

4.9%

0.1%

New York

4.2%

0.1%

Ohio

3.5%

0.1%

Texas

3.4%

0.1%

Arizona

3.4%

0.1%

Minnesota

2.6%

0.1%

Pennsylvania

2.4%

0.1%

2/28 Hybrid ARMS at December 31, 2007

1

Top ten states as determined by Primary RIF on December 31, 2007

% Total    

2/28 RIF

% Total

RIF

Top States¹

MSA Distribution of CA Bulk 2/28 RIF

Oakland

–

Fremont

–

Hayward

–

7.0%

San

Diego

–

Carlsbad

–

San

Marcos

–

7.4%

Sacramento

–

Arden-Arcade

–

Roseville

–

8.0%

Riverside

–

San

Bernardino

–

Ontario

–

19.7%

Los

Angeles

–

Long

Beach

–

Glendale

–

20.6%

22

The PMI Group, Inc.

Greater Than 97% LTV at December 31, 2007

1 Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

FICO Scores²

720 and above 

27.9%

6.8%

680-719

22.7%

5.6%

620-679

36.3%        8.9%

575-619

8.9%

2.2%

Less than 575

2.9%

0.7%

% of 

>97 RIF

% of

Total RIF

% of 

>97 RIF

% of

Total RIF

Loan Type

Fixed Rate

94.1%       23.1%

ARM

5.9%

1.4%

Property Type¹

Single Family

85.6%       21.0%

Condominium

12.3%

3.0%

Multi-Family and other

2.1%

0.5%

Occupancy

Primary Residence

94.2%       23.1%

Second Home

1.4%

0.3%

Non-owner occupied

4.4%

1.1%

Alt-A

16.1%

4.0%

$7.6 Billion of Total Risk in Force

24.6% of PMI’s Primary Risk in Force

$152,016 Average Loan Size

Effective March 1, 2008, PMI will no longer insure

loans with LTV ratios above 97%

Guideline Changes

State Distribution of > 97% LTV RIF

0.00% to 1.00%

1.00% to 2.00%

2.00% to 5.00%

5.00% to 10.00%

>10.00%

23

The PMI Group, Inc.

Top States¹

Florida

9.6%

2.3%

Texas

9.3%

2.2%

California

5.7%

1.4%

Georgia

5.4%

1.3%

Illinois

5.0%

1.2%

Virginia

3.7%

0.9%

Arizona

3.6%

0.9%

Washington

3.5%

0.8%

Maryland

3.4%

0.8%

North Carolina

3.0%

0.7%

Greater Than 97% LTV at December 31, 2007

1

Top ten states as determined by Primary RIF on December 31, 2007

% Total  

> 97% RIF

% Total

RIF

MSA Distribution of FL > 97% LTV RIF

Jacksonville

–

8.8%

Fort

Lauderdale

–

Pompano

Beach

–

Deerfield

Beach

–

10.7%

Tampa

–

St.

Petersburg

–

Clearwater

–

14.0%

Orlando

–

Kissimmee

–

17.2%

Miami

–

Miami

Beach

–

Kendall

–

17.6%

MSA Distribution of TX > 97% LTV RIF

Austin

–

Round

Rock

–

6.6%

San

Antonio

–

6.8%

Fort

Worth

–

Arlington

–

10.8%

Dallas

–

Plano

–

Irving

–

20.7%

Houston

–

Sugar

Land

–

Baytown

–

30.7%

MSA Distribution of CA > 97% LTV RIF

Bakersfield

–

5.6%

San

Diego

–

Carlsbad

–

San

Marcos

–

7.8%

Sacramento

–

Arden-Arcade

–

Roseville

–

10.3%

Los

Angeles

–

Long

Beach

–

Glendale

–

16.2%

Riverside

–

San

Bernardino

–

Ontario

–

25.1%

24

The PMI Group, Inc.

FICO Scores²

720 and above 

36.8%

8.4%

680-719

35.1%

8.0%

620-679

28.1%

6.4%

575-619

0.0%

0.0%

Less than 575

0.0%

0.0%

Loan to Value

Above 97.00%

17.3%

4.0%

95.01% to 97.00%

0.2%

0.0%

90.01% to 95.00%

27.0%

6.1%

85.01% to 90.00%

46.2%      10.5%

85.00% and below

9.3%

2.1%

Alt-A

at December 31, 2007

1 Condominium includes Townhouses and Cooperatives

2 Excludes unreported FICO scores

% of 

Alt-A RIF

% of

Total RIF

% of

Total RIF

Loan Type

Fixed Rate

74.8%       17.0%

ARM

25.2%

5.7%

Property Type¹

Single Family

78.2%       17.8%

Condominium

14.7%

3.3%

Multi-Family and other

7.1%

1.6%

Occupancy

Primary Residence

79.1%       18.0%

Second Home

6.9%

1.6%

Non-owner occupied

14.1%

3.2%

$7.1 Billion of Total Risk in Force

22.8% of PMI’s Primary Risk in Force

$214,694 Average Loan Size

Maximum LTV is 90%

Minimum FICO score of 680

At least 50% of qualifying income must

come from non-salaried sources

Guideline Changes

% of 

Alt-A RIF

State Distribution of Alt-A RIF

0.00% to 1.00%

1.00% to 2.00%

2.00% to 5.00%

5.00% to 10.00%

>10.00%

25

The PMI Group, Inc.

Top States¹

Florida

18.5%

4.2%

California

15.7%

3.6%

Illinois

5.0%

1.1%

New York

4.6%

1.1%

Texas

4.5%

1.0%

New Jersey

4.3%

1.0%

Arizona

3.8%

0.9%

Virginia

3.3%

0.8%

Maryland

3.2%      0.7%

Nevada

3.1%      0.7%

Alt-A at December 31, 2007

1

Top ten states as determined by Primary RIF on December 31, 2007

% Total

Alt-A RIF

% Total

RIF

MSA Distribution of FL Alt-A RIF

West

Palm

Beach

–

Boca

Raton

–

Boynton

Beach

–

7.5%

Fort

Lauderdale

–

Pompano

Beach

–

Deerfield

Beach

–

11.6%

Tampa

–

St.

Petersburg

–

Clearwater

–

12.4%

Orlando

–

Kissimmee

–

18.9%

Miami

–

Miami

Beach

–

Kendall

–

15.3%

MSA Distribution of CA Alt-A RIF

Santa

Ana

–

Anaheim

–

Irvine

–

5.8%

San

Diego

–

Carlsbad

–

San

Marcos

–

8.0%

Sacramento

–

Arden-Arcade

–

Roseville

–

8.7%

Los

Angeles

–

Long

Beach

–

Glendale

–

21.2%

Riverside

–

San

Bernardino

–

Ontario

–

23.0%

Primary Portfolio Characteristics

by Vintage

27

The PMI Group, Inc.

$31.0 Billion Primary Risk in Force

and $3.5 Billion Pool Risk in Force*

Primary Flow

75%

Domestic

Mortgage

Insurance

Primary

Structured

15%

Domestic MI

57%

Modified   

Pool

8%

General Portfolio Categories

Primary Flow Insurance

$25.9 billion of risk in force 

Primary mortgage insurance offered to lenders

on a loan-by-loan basis

Primary Structured Insurance

$5.1 billion of risk in force 

Credit enhancement solutions offered across the

credit spectrum to agency and non-agency MBS

issuers as well as portfolio investors

Modified Pool Risk in Force

$2.9 billion of risk in force 

Insurance offered to agency and non-agency MBS

issuers and investors

Other Pool

$0.6 billion of risk in force 

Prior to 2002, PMI offered certain pool insurance

products, referred to principally as GSE or Old Pool,

to lenders, the GSEs and non-agency market

Other Pool

2%

* At December 31, 2007

28

The PMI Group, Inc.

U.S. Portfolio

–

Policy Year Loan Performance

*Gross premiums written include ceded and refunded premiums.

Percentage of Cumulative Primary Insurance Losses Paid (Gross)

To Cumulative Primary Insurance Premiums Written (Gross)*

0

50

100

150

200

250

300

1

2

3

4

5

6

7

8

9

10

Years Since Policy Issue

1982

1990

2001

2002

2003

2004

2005

2006

2007

1982 “Oil Patch”

experience

1990 “California”

experience

29

The PMI Group, Inc.

Risk Characteristics

Risk Characteristics: Total Primary Portfolio

Risk in Force (dollars in millions)

Default Rate (as measured by policies)

Credit Score

Total

Loan Type

Total Primary Portfolio:

PMI’s total primary book is primarily driven by the flow channel

Loans are primarily fixed rate and owner occupied with FICO scores greater than 620

Certain geographies and select products have exhibited heightened levels of defaults

Total Primary Risk in Force as of December 31, 2007

$26,996

$7,785

$10,242

$10,115

$30,967

$1,831

$7,603

$7,058

$2,506

$3,337

$2,936

$4,388

$675

$1,036

$4,210

15.5%

10.2%

6.1%

2.9%

7.9%

17.3%

38.6%

11.0%

9.1%

13.9%

10.9%

10.6%

6.5%

10.6%

27.0%

Total

720 and

above

680 -

719

620 -

679

575 -

619

Less

than 575

Fixed

Rate

ARMs

2/28s

Interest

Only

LTV>97

Alt-A

Calif.

Florida

Auto

States

30

The PMI Group, Inc.

Primary Portfolio Characteristics

Primary RIF as of December 31, 2007

1

Excludes unreported FICO scores

2

At origination

Note: 

-

Interest rate adjustments as a percentage of Total Risk in Force are approximately 3% and 1% in 2008 and 2009, respectively. 

-

Categories are not mutually exclusive except for Credit Score and Loan Type

All $ in Millions, except for Average Loan Size

Total

Credit Score¹

Loan Type

Less than 575

575 -

619

620 -

679

680 -

719

720 and above

Fixed Rate

ARM

2/28s

Interest Only

LTV > 97%

Alt-A

California

Florida

Auto States

Avg Loan Size

Avg LTV2

Avg FICO

Specific Portfolio Characteristics

Total Portfolio

$30,967.1

$674.7

$1,830.5

$10,242.4

$7,785.1

$10,115.1

$26,996.2

$2,935.5

$1,035.5

Default Rate

7.9%

27.0%

17.3%

10.2%

6.1%

2.9%

6.5%

15.5%

38.6%

2007 Vintage

$10,824.8

$277.6

$682.4

$3,247.7

$2,837.0

$3,750.6

$10,054.4

$698.4

$72.0

Default Rate

5.1%

17.1%

9.7%

5.7%

4.1%

2.4%

4.8%

8.5%

16.8%

2006 Vintage

$6,191.1

$82.5

$269.2

$2,190.8

$1,615.2

$2,001.3

$4,805.2

$867.4

$518.5

Default Rate

10.8%

35.5%

22.0%

14.4%

9.4%

4.4%

8.1%

17.7%

37.7%

2005 Vintage

$4,829.0

$65.1

$218.3

$1,757.0

$1,239.1

$1,513.8

$3,660.1

$790.8

$378.1

Default Rate

9.6%

36.3%

23.2%

13.1%

7.6%

3.5%

6.5%

16.9%

40.7%

2004 Vintage and Prior

$9,122.3

$249.5

$660.6

$3,047.0

$2,093.8

$2,849.3

$8,476.5

$578.9

$66.9

Default Rate

8.0%

31.7%

20.3%

10.2%

5.3%

2.4%

7.2%

18.7%

46.9%

Total Portfolio

$4,388.0

$7,603.0

$7,058.1

$2,505.5

$3,336.9

$4,209.9

$155,029

93%

689

Default Rate

11.0%

9.1%

13.9%

10.9%

10.6%

10.6%

2007 Vintage

$2,428.2

$3,820.2

$3,189.2

$1,157.9

$1,167.1

$1,193.0

$194,313

94%

687

Default Rate

7.9%

7.1%

9.7%

6.2%

8.8%

5.6%

2006 Vintage

$1,177.0

$1,610.9

$2,108.6

$584.1

$873.6

$807.4

$176,811

93%

692

Default Rate

14.2%

10.4%

18.3%

22.4%

16.8%

13.9%

2005 Vintage

$671.1

$911.8

$1,093.7

$441.2

$628.9

$707.1

$160,175

92%

693

Default Rate

15.1%

11.6%

17.7%

19.2%

12.6%

12.5%

2004 Vintage and Prior

$111.7

$1,260.1

$666.5

$322.2

$667.2

$1,502.3

$115,947

92%

688

Default Rate

10.7%

10.7%

11.0%

4.5%

6.7%

11.4%

1

31

The PMI Group, Inc.

Flow Risk in Force as of December 31, 2007

Risk Characteristics: Flow

Risk in Force (dollars in millions)

Default Rate (as measured by policies)

Credit Score

Total

Loan Type

Risk Characteristics

Primary Flow Portfolio:

PMI’s primary flow book represents 83% of primary insurance and is primarily owner occupied, fixed

rate loans with FICO scores greater than 620

Approximately 77% of flow risk in force has a GSE as the coverage beneficiary

Approximately 62% of flow risk in force is in captive reinsurance agreements

$412

$3,354

$6,213

$0

$3,502

$23,618

$2,853

$1,843

$5,468

$1,382

$25,852

$8,732

$8,416

$6,690

$2,233

27.3%

15.1%

8.5%

6.2%

10.1%

8.0%

11.6%

8.8%

9.5%

15.6%

6.7%

2.8%

5.4%

8.6%

Total

720 and

above

680 -

719

620 -

679

575 -

619

Less

than 575

Fixed

Rate

ARMs

2/28s

Interest

Only

LTV>97

Alt-A

Calif.

Florida

Auto

States

`

32

The PMI Group, Inc.

Flow Portfolio Characteristics

Flow RIF as of December 31, 2007

All $ in Millions, except for Average Loan Size

1

Excludes unreported FICO scores

2

At origination

Note:  Categories are not mutually exclusive except for Credit Score and Loan Type

Total

Credit Score¹

Loan Type

Less than 575

575 -

619

620 -

679

680 -

719

720 and above

Fixed Rate

ARM

2/28s

Interest Only

LTV > 97%

Alt-A

California

Florida

Auto States

Avg Loan Size

Avg LTV2

Avg FICO

Specific Portfolio Characteristics

Total Portfolio

$25,851.6

$412.0

$1,381.6

$8,416.3

$6,689.5

$8,732.0

$23,618.3

$2,233.3

$0.0

Default Rate

6.7%

27.3%

15.6%

8.6%

5.4%

2.8%

6.2%

15.1%

-

2007 Vintage

$9,129.9

$204.1

$556.3

$2,808.9

$2,454.1

$3,077.1

$8,688.8

$441.1

$0.0

Default Rate

5.2%

21.0%

10.3%

5.6%

4.2%

2.5%

5.0%

9.2%

-

2006 Vintage

$4,490.5

$34.8

$176.0

$1,461.4

$1,218.1

$1,567.9

$3,804.0

$686.4

$0.0

Default Rate

7.9%

36.8%

18.5%

9.7%

7.4%

3.8%

6.9%

16.9%

-

2005 Vintage

$4,004.5

$28.5

$150.5

$1,367.2

$1,049.2

$1,373.5

$3,391.3

$613.2

$0.0

Default Rate

7.2%

34.0%

18.2%

9.8%

6.1%

3.1%

6.0%

16.7%

-

2004 Vintage and Prior

$8,226.7

$144.6

$498.8

$2,778.8

$1,968.1

$2,713.5

$7,734.2

$492.5

$0.0

Default Rate

7.2%

30.4%

18.3%

9.6%

5.2%

2.4%

6.8%

14.9%

-

Total Portfolio

$3,353.9

$6,212.5

$5,468.2

$1,843.2

$2,853.4

$3,501.5

$153,720

93%

693

Default Rate

9.6%

8.8%

11.6%

8.0%

10.1%

8.5%

2007 Vintage

$2,152.8

$3,271.7

$2,835.5

$1,024.0

$993.8

$1,007.2

$197,124

94%

689

Default Rate

8.1%

7.6%

9.7%

6.2%

9.5%

5.4%

2006 Vintage

$700.5

$1,196.4

$1,296.6

$301.7

$686.0

$555.9

$176,383

93%

697

Default Rate

12.5%

10.2%

15.0%

16.2%

15.4%

7.8%

2005 Vintage

$403.2

$790.7

$775.6

$240.6

$574.6

$563.0

$157,512

92%

697

Default Rate

10.9%

10.0%

13.8%

14.1%

11.7%

8.9%

2004 Vintage and Prior

$97.4

$953.6

$560.6

$276.9

$599.0

$1,375.3

$116,373

92%

692

Default Rate

9.5%

9.6%

9.7%

3.8%

6.3%

10.2%

33

The PMI Group, Inc.

Risk Characteristics: Structured Transactions

Risk in Force (dollars in millions)

Default Rate (as measured by policies)

Credit Score

Total

Loan Type

Risk Characteristics

Primary Structured Portfolio:

PMI’s primary structured book represents approximately 17% of total primary insurance

Highest defaults are reported in the 2/28 hybrid ARMs product, in which:

Approximately 71% of 2/28 hybrid ARM risk in force has passed the interest rate reset date

Monthly reporting of notices of default began to decline in late 2007

Structured Transactions Risk in Force as of December 31, 2007

$263

$1,034

$1,391

$1,036

$484

$3,378

$484

$662

$1,590

$449

$5,116

$1,383

$1,826

$1,096

$702

38.6%

26.6%

16.4%

20.7%

8.7%

13.4%

21.0%

20.8%

10.2%

15.9%

21.6%

13.9%

4.2%

10.4%

18.1%

Total

720 and

above

680 -

719

620 -

679

575 -

619

Less

than 575

Fixed

Rate

ARMs

2/28s

Interest

Only

LTV>97

Alt-A

Calif.

Florida

Auto

States

`

34

The PMI Group, Inc.

Structured Portfolio Characteristics

Structured RIF as of December 31, 2007

All $ in Millions, except for Average Loan Size

1

Excludes unreported FICO scores

2

At origination

Note:

-

Approximately 3% of Total Primary RIF is subject to a rate adjustment in 2008.  2/28 Hybrid ARMs that are subject to a rate reset in 2008 represent approximately 1% of Total Primary RIF.

-

2/28 hybrid ARMs monthly reported notices of default peaked in late 2007. 

-

Categories are not mutually exclusive except for Credit Score and Loan Type

Total

Credit Score¹

Loan Type

Less than 575

575 -

619

620 -

679

680 -

719

720 and above

Fixed Rate

ARM

2/28s

Interest Only

LTV > 97%

Alt-A

California

Florida

Auto States

Avg Loan Size

Avg LTV2

Specific Portfolio Characteristics

Avg FICO

Total Portfolio

$5,115.6

$262.7

$448.9

$1,826.1

$1,095.5

$1,383.1

$3,377.8

$702.3

$1,035.5

Default Rate

13.9%

26.6%

21.6%

18.1%

10.4%

4.2%

8.7%

16.4%

38.6%

2007 Vintage

$1,694.8

$73.5

$126.1

$438.8

$382.9

$673.6

$1,365.6

$257.2

$72.0

Default Rate

4.9%

10.6%

8.1%

6.0%

3.5%

1.7%

3.6%

8.1%

16.8%

2006 Vintage

$1,700.6

$47.7

$93.2

$729.4

$397.0

$433.3

$1,001.2

$180.9

$518.5

Default Rate

19.5%

34.4%

29.1%

25.6%

16.1%

7.1%

12.7%

19.9%

37.7%

2005 Vintage

$824.5

$36.6

$67.8

$389.7

$189.9

$140.3

$268.8

$177.7

$378.1

Default Rate

24.1%

38.4%

36.7%

28.2%

18.8%

8.3%

12.5%

17.8%

40.7%

2004 Vintage and Prior

$895.6

$104.9

$161.8

$268.2

$125.7

$135.9

$742.3

$86.4

$66.9

Default Rate

14.7%

33.6%

26.3%

15.6%

7.4%

3.0%

10.5%

36.1%

46.9%

California

Total Portfolio

$1,034.1

$1,390.6

$1,589.9

$662.3

$483.5

$708.4

$161,679

92%

669

Default Rate

15.9%

10.2%

20.8%

21.0%

13.4%

20.7%

2007 Vintage

$275.4

$548.5

$353.7

$133.9

$173.4

$185.8

$182,765

94%

677

Default Rate

6.9%

5.0%

10.1%

6.6%

5.7%

6.4%

2006 Vintage

$476.5

$414.5

$812.0

$282.4

$187.6

$251.5

$178,075

91%

678

Default Rate

16.9%

11.4%

22.9%

30.8%

21.8%

27.4%

2005 Vintage

$267.9

$121.1

$318.1

$200.7

$54.3

$144.1

$175,842

89%

667

Default Rate

24.1%

24.9%

29.0%

27.5%

22.3%

26.9%

2004 Vintage and Prior

$14.3

$306.4

$106.0

$45.3

$68.3

$126.9

$112,549

91%

648

Default Rate

18.0%

13.3%

17.0%

9.0%

10.0%

23.0%

1

35

The PMI Group, Inc.

Risk Characteristics: Pool

Modified Pool Insurance:

Modified pool insurance may be used in tandem with primary mortgage insurance or may be placed on

loans that do not require mortgage insurance.

The extent of coverage of modified pool products varies.

Some products provide first loss protection by covering a percentage of the losses on individual loans

held within the pool of loans up to a stated aggregate loss limit (“stop loss limit”) for the entire pool.

Some modified pool products offer mezzanine-level coverage by providing for claims payments only after

a predetermined cumulative claims level, or deductible, is reached. 

$1,391

$1,517

$1,810

$2,527

$657

$502

$421

$347

$325

$267

$243

$231

$2,852

$278

$226

$485

$112

$122

$116

$109

$0

$1,000

$2,000

$3,000

$4,000

2003

2004

2005

2006

2007

Modified Pool

Old Pool

Traditional Pool

GSE Pool

Other Pool Insurance:

Prior to 2002, PMI offered certain pool insurance products, referred to principally as GSE or Old Pool,

to lenders, the GSEs and non-agency markets.

$2,858

$2,408

$2,589

$3,217

$3,464

Pool Risk in Force as of December 31, 2007

36

The PMI Group, Inc.

Modified Pool Portfolio Characteristics

All $ in Millions

Modified Pool:

Data shown in this exhibit is an aggregation of unique pools into book years

Risk reduction features of modified pool, which may include deductibles and stop loss limits, mitigate

risk of loss from loans insured

Modified pool has performed very well and PMI’s actual claims paid or losses to date have been

minimal

Modified Pool with Deductibles

Modified Pool without Deductibles

2004 and Prior

2005

2006

2007

Original Insured Balance

$35,500

$13,234

$18,913

$8,782

Insurance in Force

$8,953

$7,839

$15,301

$8,325

Original Stop Loss Amount

(a)

$1,315

$367

$643

$265

Original Deductible Amount

(b)

$266

$78

$136

$77

Original Risk in Force

(a-b)

$1,049

$289

$507

$188

Losses Applicable to Deductible

( c)

$82

$5

$2

$0

PMI's

Claims Paid to Date

(d)

$0

$0

$0

$0

Deductible Balance

(b-c)

$184

$73

$134

$77

Risk in Force

(a-b-d)

$1,049

$289

$507

$188

Average Loan Level Coverage Percent

24.9%

25.2%

24.1%

24.0%

2004 and Prior

2005

2006

2007

Original Insured Balance

$16,375

$2,577

$8,442

$0

Insurance in Force

$2,774

$1,604

$5,798

$0

Original Stop Loss Amount

$483

$54

$317

$0

PMI's

Claims Paid to Date

$31

$2

$2

$0

Stop Loss Balance

(Remaining RIF)

$452

$52

$315

$0

Average Loan Level Coverage Percent

26.1%

24.6%

27.2%

0.0%

37

The PMI Group, Inc.

Modified Pool Portfolio Characteristics

Modified Pool IIF as of December 31, 2007

1

Excludes unreported FICO scores

2

Excludes Balloon, Buy Down, and Other

3

At origination

Note:  Categories are not mutually exclusive except for Credit Score and Loan Type

All $ in Millions, except for Average Loan Size

Specific Portfolio Characteristics

Specific Portfolio Characteristics

Credit Score1

Loan Type2

Credit Score1

Loan Type2

Total

Total

Fixed Rate

ARM

2/28s

Fixed Rate

ARM

2/28s

Deductible

Non Deductible

Less than 575

575 -

619

620 -

679

680 -

719

720 and above

Less than 575

575 -

619

620 -

679

680 -

719

720 and above

Interest Only

LTV > 97%

Alt-A

California

Florida

Auto States

Avg Loan Size

Avg LTV3

Avg FICO

Interest Only

LTV > 97%

Alt-A

California

Florida

Auto States

Avg Loan Size

Avg LTV3

Avg FICO

Total Portfolio

$40,418

$601

$1,350

$12,737

$12,161

$13,556

$37,768

$2,460

$3

2007 Vintage

$8,325

$138

$292

$2,892

$2,846

$2,156

$7,912

$412

$0

2006 Vintage

$15,301

$83

$180

$5,797

$5,138

$4,102

$15,095

$203

$2

2005 Vintage

$7,839

$7

$62

$1,886

$2,485

$3,398

$6,302

$1,535

$1

2004 Vintage and Prior

$8,953

$373

$815

$2,162

$1,692

$3,901

$8,458

$310

$0

Total Portfolio

$13,271

$802

$25,902

$6,656

$4,068

$4,134

$172,215

78

694

2007 Vintage

$3,668

$617

$5,686

$1,608

$792

$767

$207,481

81

688

2006 Vintage

$5,744

$63

$11,139

$2,485

$1,750

$1,452

$189,907

79

693

2005 Vintage

$2,969

$45

$5,445

$1,406

$966

$740

$177,194

79

709

2004 Vintage and Prior

$890

$78

$3,632

$1,157

$559

$1,174

$128,341

75

690

Total Portfolio

$10,176

$469

$1,042

$3,787

$2,415

$2,230

$6,056

$4,024

$31

2007 Vintage

$0

$0

$0

$0

$0

$0

$0

$0

$0

2006 Vintage

$5,798

$457

$991

$2,521

$1,173

$655

$2,023

$3,743

$31

2005 Vintage

$1,604

$0

$7

$330

$479

$769

$1,579

$26

$0

2004 Vintage and Prior

$2,774

$12

$45

$936

$764

$805

$2,454

$255

$0

Total Portfolio

$1,323

$2,171

$3,628

$1,512

$853

$1,157

$153,208

86

672

2007 Vintage

$0

$0

$0

$0

$0

$0

$0

N/A

N/A

2006 Vintage

$391

$2,093

$439

$606

$524

$911

$156,958

93

651

2005 Vintage

$746

$1

$1,140

$337

$121

$69

$198,959

76

718

2004 Vintage and Prior

$186

$77

$2,049

$568

$209

$177

$129,516

78

694

Captive Reinsurance

39

The PMI Group, Inc.

$275

$274

$34

2007

2008

2009

Captive reinsurers are wholly-owned, bankruptcy remote subsidiaries of originators that provide mezzanine level reinsurance

for loans for which PMI has provided primary mortgage insurance coverage.

PMI is the named beneficiary on captive trust balances totaling approximately $703 million as of December 31, 2007.

At December 31, 2007, approximately 62% of flow risk in force was covered by captive reinsurance agreements, including:

Captive trust balances will continue to grow with new insurance written in the flow channel.  Future ceded premiums can be

used to meet capital adequacy for existing book years.   

Based on current expectations of defaults, PMI forecasts approximately the following reductions to total incurred losses as a

result of captive reinsurance agreements in 2008 and 2009:

Expected Benefit from Captive Reinsurance Agreements

PMI’s Captive Reinsurance Agreements

(Dollars in Millions)

Flow  Risk in Force Covered by Captives

~ 55% of LTVs

>97%*

~ 65% of less-than-A quality

~ 48% of Alt-A

~ 65% of prime

*

Captive coverage for LTVs

greater than 97% may overlap with other listed categories

40

The PMI Group, Inc.

Example of a Captive Reinsurance Structure

Example of a 4-10-40 XOL Reinsurance Structure

A sample portfolio of insured mortgage loans total $100 million with an average mortgage insurance coverage rate

of 25%.  PMI, the primary mortgage insurer, would insure $25 million in gross risk.

PMI will cede 40% of the gross written premium to the reinsurer to reinsure a percentage of the original risk

insured.

PMI would pay losses up to the first loss attachment layer of 4%

of gross risk, or $1,000,000 (i.e. 4% x $25MM).

The reinsurer will pay losses in excess of $1,000,000 up to $3.5

million for a maximum exposure of $2.5 million

(i.e. 10% x $25MM).

All losses in excess of $3.5 million are the responsibility of PMI.

Captive Reinsurance –

Ultimate Loss Ratio Example

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

Ultimate Claim Rate

Pre-Captive

PMI

Reinsurer

41

The PMI Group, Inc.

A Reinsurance Agreement and related Trust Agreement must be negotiated and executed by all parties.

Captive trust accounts are regulated by Arizona and New York State insurance regulations, as well as GSE guidelines.

Trust assets must be invested in eligible securities to ensure the security of the trust assets, including:

Conservative investment standards as defined by New York statute.

Assets must be readily marketable and investment-grade securities.

A trust account is established at an independent trustee bank with PMI as the named beneficiary.

PMI, as beneficiary, shall have the sole right to withdraw trust

assets at any time without notice to Grantor (lender).

The lender must fund the trust account with a minimum 10% of first year’s risk ceded irrespective of any premiums ceded into

the trust.

Failure to contribute initial capital or any portion thereof results in reinsurance agreement termination.

Reinsurer loses these deposits and any other trust balances if it fails to make any subsequent required deposits.

100% of ceded premiums are deposited into the trust account

At all times, the minimum trust balance must be the greater of 10% of reinsured risk and 102% of required

reserves.

Failure to maintain minimum capital levels results in reinsurance agreement termination.

Terminations result in all trust assets being transferred to PMI, reassumption of all ceded business and cancellation

of rights and obligations under reinsurance agreement.

Reinsurance agreements are usually written for more than one policy, and the policies are “cross-collateralized’, meaning that

the total risk assumed by the captive across all policy years is

compared to the total capital in the trust account for calculating

capital adequacy.

Contractual and Capital Requirements

42

The PMI Group, Inc.

Captive reinsurance in the mortgage insurance industry is highly

regulated:

State Departments of Insurance:

Arizona –

Captive reinsurance agreements must meet certain statutory and regulatory requirements for

PMI to receive credit for reinsurance.  This includes the requirement for the captive insurer to hold

contingency, loss and unearned premium reserves in investment restricted trust accounts of which a

mortgage insurer is the sole beneficiary.

NY, CA –

Impose their regulations on credit for reinsurance to both domestic and foreign insurers.

Reinsurer’s state of domicile –

Financial statements, actuarial opinions on loss reserves must be filed

annually.

HUD:

HUD

has,

by

letter,

set

certain

standards

that

are

used

to

evaluate

whether

captive

reinsurance

programs

may violate the Real Estate Settlement Procedures Act (RESPA).

OCC/OTS/Federal

Reserve:

Oversee

the

activities

of

captive

reinsurance

subsidiaries

of

banks

they

regulate.

Captive Review:

Each captive program structure is reviewed by an independent auditor or consultant and the

transfer of risk requirements in accordance with SFAS 113 are verified before PMI enters into the program

structure.

Freddie

Mac

and

Fannie

Mae

(GSEs):

In

an

effort

to

control

counterparty

risk,

GSEs

have

issued

MI

Eligibility/Qualified Requirements.  These requirements set strict standards around captive reinsurance

arrangements with lenders, including:

Reinsurance agreements must be eligible for reinsurance accounting and must constitute a risk transfer

as defined by SFAS 113.

The imposition of minimum and dividend capital levels.

Requiring a minimum restricted asset balance not less than $35 million

in aggregate for all in force

agreements

in order for a captive reinsurer to assume a premium cede greater than 25%.

Freddie Mac

announced that effective June 1, 2008 the portion of the premiums that Freddie Mac approved

mortgage insurers may pay to captive reinsurers will be limited to 25 percent.  

Captive Reinsurance Regulatory Requirements

PMI Australia

Portfolio Characteristics

44

The PMI Group, Inc.

Australian Portfolio

Geographic Distribution

Risk in Force by State¹

New South Wales

33.9 %

Queensland

22.2%

Victoria

18.4%

Western Australia

12.4%

South Australia

7.0%

New Zealand

3.0%

Australian Capital Territory (ACT)

1.7%

Tasmania

0.9%

Northern Territory

0.5%

Australian Population by State²

New South Wales

6,854,800

32.9%

Victoria

5,165,400

24.8%

Queensland

4,132,000

19.8%

Western Australia

2,081,000

10.0%

South Australia

1,575,700

7.5%

Australian Capital

Territory (ACT)

336,400

1.6%

Tasmania

491,700

2.4%

Northern Territory

212,600

1.0%

20,852,000

100.0%

1

Risk in force as of December 31, 2007

2

Source: Australian Bureau of Statistics, December 2006 (Does not add due to rounding)

Western

Australia

South

Australia

Northern

Territory

Queensland

New South

Wales

Victoria

Tasmania

ACT

45

The PMI Group, Inc.

22.9%

$161.4 Billion Primary RIF

22.7%

$13,194

$3,259

$4,728

$6,131

$7,799

$11,996

$19,821

$36,527

$36,990

$20,959

$0

$10,000

$20,000

$30,000

$40,000

$50,000

Prior to 1999

1999

2000

2001

2002

2003

2004

2005

2006

2007

Percent

of Total

12.3%

13.0%

7.4%

4.8%

3.8%

2.9%

2.0%

8.2%

Australian Portfolio

Age Distribution

U.S. Dollars in Millions

46

The PMI Group, Inc.

Australian Portfolio Characteristics

LTVs as a % of RIF

Property Type as a % of RIF

Occupancy Status as a % of RIF

Loan Amount as a % of RIF

60.0%

65.7%

65.8%

67.7%

22.2%

19.0%

18.5%

16.2%

16.3%

66.8%

15.7%

14.8%

15.0%

15.3%

17.3%

0.5%

0.5%

0.7%

0.9%

1.2%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

79.9%

81.0%

81.5%

83.2%

83.5%

20.1%

19.0%

18.5%

16.8%

16.5%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

30.5%

24.9%

24.7%

18.3%

12.4%

53.8%

53.2%

53.4%

53.6%

47.8%

21.9%

21.9%

28.1%

39.8%

15.7%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

Condominium,

townhouse, cooperative

88.5%

90.9%

89.6%

90.2%

89.7%

9.9%

7.9%

8.9%

8.4%

8.8%

1.4%

1.3%

1.5%

1.3%

1.6%

0%

25%

50%

75%

100%

2003

2004

2005

2006

2007

Multi-family

dwelling and other

Single-Family

Detached

Non-Owner Occupied

Owner Occupied

Over $100,000 and up to $250,000

$100,000 or less

Over $250,000

LTVs between

90.01% and 95%

LTVs of 85%

and below

LTVs

above 95%

LTVs between

85.01% and 90%

Note:  Due to rounding, the sum of percentages may not total 100%

The increase in loan size in Australia reflects the combination of higher property prices for newer policies and

lower loan sizes on terminating policies.

47

The PMI Group, Inc.

Australian Portfolio Characteristics

Low Documentation Loans as a % of RIF

Average Primary Loan Size

IIF and RIF

Flow and RMBS RIF

2.3%

5.0%

7.8%

7.9%

8.6%

0%

2%

4%

6%

8%

10%

2003

2004

2005

2006

2007

$109.1

$122.7

$122.2

$141.0

$166.9

$0

$25

$50

$75

$100

$125

$150

$175

2003

2004

2005

2006

2007

Insurance in Force

Risk in Force

Flow

RMBS

68.9

71.2

81.5

96.0

37.6

54.0

65.4

$79.3

$103.1

$108.8

59.5

19.8

34.2

$135.5

$161.4

$0

$25

$50

$75

$100

$125

$150

$175

2003

2004

2005

2006

2007

Note:  Due to rounding, the sum of percentages may not total 100%

$0

$25

$50

$75

$100

$125

$150

$175

$200

2003

2004

2005

2006

2007

PMI Guaranty

Portfolio Characteristics

49

The PMI Group, Inc.

Portfolio by Source

(by par)

PMI Guaranty Portfolio

Public finance reinsurance is the largest segment of

PMI Guaranty’s portfolio

Structured finance obligations are all mortgage

related

PMI Guaranty stopped insuring new structured

transactions after the first quarter of 2007

PMI Guaranty was formed in 2006 and is a

wholly-owned surety company based in New

Jersey

Reinsurance to primary financial guarantors

represents the major source of PMI Guaranty’s

business

By providing reinsurance to financial guarantors,

PMI Guaranty can reduce the amount of total

capital required to be held by financial

guarantors

Direct

3%

Reinsurance

97%

Public Finance

95%

Structured

Finance

5%

Net Par in Force of $963 million

as of December 31, 2007

Segment Distribution

(by par)

50

The PMI Group, Inc.

MBS, 5%

Higher

Education

2%

Tax-Backed

10%

Transport-

ation, 14%

Utility

13%

General

Obligation

56%

$ millions, as of December 31, 2007

Public Finance:

G.O.

$544

56%

Tax-Backed

$  98

10%

Transportation

$132

14%

Utility

$125

13%

Higher Education

$  15

2%                  

Total Public Finance:

$914

95%

MBS:

$  49

5%

Total Par Outstanding:

$963

100%

Portfolio Profile by Sector

PMI Guaranty Portfolio

PMI Guaranty’s portfolio is well diversified

Two MBS transactions represent the structured finance sector, providing excess-of-loss

coverage –

not first loss

At the time of MBS origination, 90% of the original collateral represented first liens and

10% represented closed-end, fixed-rate second liens

Net Par In Force