Exhibit 99.2
PMA Capital Corporation | |||||||||
| Statistical Supplement | |||||||||
| Second Quarter - 2006 | |||||||||
Table of Contents | |||||||||
| Page | |||||||||
Consolidated Highlights: | |||||||||
| Selected Financial Data - Second Quarter | |||||||||
| Selected Financial Data - Year-to-date | |||||||||
| Consolidated Statements of Operations - Per Share Data | |||||||||
| Consolidated Statements of Operations - Second Quarter | |||||||||
| Consolidated Statements of Operations - Year-to-date | |||||||||
| Consolidated Balance Sheets | |||||||||
| Invested Assets and Net Investment Income; Debt | |||||||||
Segment Information: | |||||||||
| Statements of Operations - Consolidating - Year-to-date | - | ||||||||
| Statements of Operations - Consolidating - Second Quarter | - | ||||||||
| Statements of Operations - PMA Insurance Group | |||||||||
| Insurance Ratios - PMA Insurance Group | |||||||||
| Statements of Operations - Run-off Operations | |||||||||
| Statements of Operations - Corporate & Other | |||||||||
Operating Cash Flow Information: | |||||||||
| Operating Cash Flows - Consolidated | |||||||||
| Operating Cash Flows - PMA Insurance Group | |||||||||
| Operating Cash Flows - Run-off Operations | |||||||||
Statutory Financial Information: | |||||||||
| Statutory Surplus; Statutory Financial Information - PMA Pool | |||||||||
Other Information: | |||||||||
| Industry Ratings and Market Information | |||||||||
Legend: | |||||||||
| NM - Not Meaningful | |||||||||
Note: Operating income (loss), which we define as GAAP net income (loss) excluding net realized investment gains | |||||||||
and losses, is the financial performance measure used by our management and Board of Directors to evaluate and | |||||||||
assess the results of our business segments because (i) net realized investment gains and losses are unpredictable and | |||||||||
not necessarily indicative of current operating fundamentals or future performance of the business segments and (ii) in | |||||||||
many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result | |||||||||
in net realized gains and losses that do not relate to the operations of the individual segments. Operating income (loss) | |||||||||
does not replace net income (loss) as the GAAP measure of our consolidated results of operations. See pages 1 and 2 for | |||||||||
reconciliations of operating results by segment to GAAP net income (loss). | |||||||||
| Selected Financial Data | |||||||||||||||||||
(Dollar Amounts in Thousands, Except Per Share Data) | |||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 2nd | ||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | Quarter | ||||||||||||||
Net Premiums Written by Segment: | |||||||||||||||||||
| PMA Insurance Group | $ | 82,103 | $ | 116,877 | $ | 71,339 | $ | 113,390 | $ | 85,639 | 4.3 | % | |||||||
| Run-off Operations | 1,504 | 789 | 3,028 | 606 | 527 | -65.0 | % | ||||||||||||
| Corporate & Other | (220 | ) | (195 | ) | (209 | ) | (168 | ) | (213 | ) | 3.2 | % | |||||||
| Net premiums written | $ | 83,387 | $ | 117,471 | $ | 74,158 | $ | 113,828 | $ | 85,953 | 3.1 | % | |||||||
Major Components of Net Income (Loss): | |||||||||||||||||||
| Pre-tax operating income (loss) by segment: | |||||||||||||||||||
| PMA Insurance Group | $ | 4,941 | $ | 6,600 | $ | 3,867 | $ | 8,141 | $ | 6,671 | 35.0 | % | |||||||
Run-off Operations | 1,133 | (258 | ) | 1,838 | 161 | 428 | -62.2 | % | |||||||||||
| Corporate & Other | (5,721 | ) | (5,609 | ) | (6,722 | ) | (6,139 | ) | (6,128 | ) | -7.1 | % | |||||||
| Pre-tax operating income (loss) | 353 | 733 | (1,017 | ) | 2,163 | 971 | NM | ||||||||||||
| Net realized investment gains (losses) | (265 | ) | 483 | (1,084 | ) | 1,818 | (1,978 | ) | NM | ||||||||||
| Pre-tax income (loss) | 88 | 1,216 | (2,101 | ) | 3,981 | (1,007 | ) | NM | |||||||||||
| Income tax expense (benefit) | 71 | 476 | (875 | ) | 1,500 | (245 | ) | NM | |||||||||||
| Net income (loss) | $ | 17 | $ | 740 | $ | (1,226 | ) | $ | 2,481 | $ | (762 | ) | NM | ||||||
| After-tax operating income (loss) | $ | 189 | $ | 426 | $ | (521 | ) | $ | 1,299 | $ | 524 | NM | |||||||
Diluted Earnings (Loss) Per Share: | |||||||||||||||||||
| Net income (loss) | $ | - | $ | 0.02 | $ | (0.04 | ) | $ | 0.08 | $ | (0.02 | ) | NM | ||||||
| Less the impact of: | |||||||||||||||||||
| Realized gains (losses) after tax | (0.01 | ) | 0.01 | (0.02 | ) | 0.04 | (0.04 | ) | NM | ||||||||||
| After-tax operating income (loss) | $ | 0.01 | $ | 0.01 | $ | (0.02 | ) | $ | 0.04 | $ | 0.02 | 100.0 | % | ||||||
Capitalization: | |||||||||||||||||||
| Debt | $ | 208,586 | $ | 216,808 | $ | 196,181 | $ | 189,181 | $ | 148,303 | -28.9 | % | |||||||
| Shareholders' equity excluding FAS 115 unrealized gain (loss) | 412,330 | 413,513 | 409,019 | 413,516 | 417,064 | 1.1 | % | ||||||||||||
| Total capitalization excluding FAS 115 unrealized gain (loss) | 620,916 | 630,321 | 605,200 | 602,697 | 565,367 | -8.9 | % | ||||||||||||
| FAS 115 unrealized gain (loss) | 17,266 | 1,151 | (2,796 | ) | (13,941 | ) | (18,733 | ) | NM | ||||||||||
| Total capitalization including FAS 115 unrealized gain (loss) | $ | 638,182 | $ | 631,472 | $ | 602,404 | $ | 588,756 | $ | 546,634 | -14.3 | % | |||||||
Book Value Per Share: | |||||||||||||||||||
| Excluding FAS 115 unrealized gain (loss) | $ | 12.93 | $ | 12.94 | $ | 12.79 | $ | 12.83 | $ | 12.79 | -1.1 | % | |||||||
| Including FAS 115 unrealized gain (loss) | $ | 13.47 | $ | 12.98 | $ | 12.70 | $ | 12.39 | $ | 12.21 | -9.4 | % | |||||||
Debt to Total Capital: | |||||||||||||||||||
| Excluding FAS 115 unrealized gain (loss) | 33.6 | % | 34.4 | % | 32.4 | % | 31.4 | % | 26.2 | % | -22.0 | % | |||||||
| Including FAS 115 unrealized gain (loss) | 32.7 | % | 34.3 | % | 32.6 | % | 32.1 | % | 27.1 | % | -17.1 | % | |||||||
Interest Coverage: | |||||||||||||||||||
| Income before interest and income taxes | |||||||||||||||||||
| to interest expense | 1.02 | 1.30 | 0.47 | 2.03 | 0.73 | -28.4 | % | ||||||||||||
| Operating income before interest and income taxes | |||||||||||||||||||
| to interest expense | 1.09 | 1.18 | 0.75 | 1.56 | 1.26 | 15.6 | % | ||||||||||||
1
| Selected Financial Data | ||||||||||
(Dollar Amounts in Thousands, Except Per Share Data) | ||||||||||
Six | Six | % Change | ||||||||
Months | Months | Six | ||||||||
2006 | 2005 | Months | ||||||||
Net Premiums Written by Segment: | ||||||||||
| PMA Insurance Group | $ | 199,029 | $ | 187,577 | 6.1 | % | ||||
| Run-off Operations | 1,133 | 6,433 | -82.4 | % | ||||||
| Corporate & Other | (381 | ) | (414 | ) | 8.0 | % | ||||
| Net premiums written | $ | 199,781 | $ | 193,596 | 3.2 | % | ||||
Major Components of Net Income (Loss): | ||||||||||
| Pre-tax operating income (loss) by segment: | ||||||||||
| PMA Insurance Group | $ | 14,812 | $ | 11,553 | 28.2 | % | ||||
| Run-off Operations | 589 | (28,513 | ) | NM | ||||||
| Corporate & Other | (12,267 | ) | (11,888 | ) | -3.2 | % | ||||
| Pre-tax operating income (loss) | 3,134 | (28,848 | ) | NM | ||||||
| Net realized investment gains (losses) | (160 | ) | 2,718 | NM | ||||||
| Pre-tax income (loss) | 2,974 | (26,130 | ) | NM | ||||||
| Income tax expense (benefit) | 1,255 | (5,596 | ) | NM | ||||||
| Net income (loss) | $ | 1,719 | $ | (20,534 | ) | NM | ||||
| After-tax operating income (loss) | $ | 1,823 | $ | (22,301 | ) | NM | ||||
Diluted Earnings (Loss) Per Share: | ||||||||||
| Net income (loss) | $ | 0.05 | $ | (0.65 | ) | NM | ||||
| Less the impact of: | ||||||||||
| Realized gains (losses) after tax | (0.01 | ) | 0.06 | NM | ||||||
| After-tax operating income (loss) | $ | 0.06 | $ | (0.71 | ) | NM | ||||
2
| Consolidated Statements of Operations - Per Share Data | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Diluted Earnings (Loss) Per Share: | ||||||||||||||||||||||
| Net income (loss) | $ | - | $ | 0.02 | $ | (0.04 | ) | $ | 0.08 | $ | (0.02 | ) | $ | 0.05 | $ | (0.65 | ) | |||||
| Pre-tax operating income (loss) | $ | 0.01 | $ | 0.02 | $ | (0.03 | ) | $ | 0.07 | $ | 0.03 | $ | 0.10 | $ | (0.91 | ) | ||||||
| After-tax operating income (loss) | $ | 0.01 | $ | 0.01 | $ | (0.02 | ) | $ | 0.04 | $ | 0.02 | $ | 0.06 | $ | (0.71 | ) | ||||||
| Diluted weighted average common | ||||||||||||||||||||||
| shares outstanding | 32,015,127 | 32,244,295 | 31,833,384 | 32,405,934 | 32,132,618 | 32,540,905 | 31,559,468 | |||||||||||||||
Dividends declared: | ||||||||||||||||||||||
| Class A Common stock | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||
| Actual common shares issued | ||||||||||||||||||||||
| and outstanding | 31,885,541 | 31,956,983 | 31,983,283 | 32,239,288 | 32,613,234 | 32,613,234 | 31,885,541 | |||||||||||||||
Class A Common Stock prices: | ||||||||||||||||||||||
| High | $ | 9.00 | $ | 9.50 | $ | 9.73 | $ | 10.43 | $ | 10.49 | $ | 10.49 | $ | 10.65 | ||||||||
| Low | $ | 5.91 | $ | 7.83 | $ | 7.99 | $ | 8.68 | $ | 9.24 | $ | 8.68 | $ | 5.91 | ||||||||
| Close | $ | 8.83 | $ | 8.78 | $ | 9.13 | $ | 10.18 | $ | 10.30 | $ | 10.30 | $ | 8.83 | ||||||||
3
4
| Consolidated Statements of Operations | |||||||||||||||||||
(In Thousands) | |||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 2nd | ||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | Quarter | ||||||||||||||
Gross Premiums Written | $ | 95,069 | $ | 130,106 | $ | 87,240 | $ | 133,967 | $ | 100,075 | 5.3 | % | |||||||
Net Premiums Written | $ | 83,387 | $ | 117,471 | $ | 74,158 | $ | 113,828 | $ | 85,953 | 3.1 | % | |||||||
Revenues: | |||||||||||||||||||
| Net premiums earned | $ | 88,720 | $ | 92,223 | $ | 99,364 | $ | 91,659 | $ | 94,922 | 7.0 | % | |||||||
| Net investment income | 12,542 | 12,648 | 11,761 | 11,400 | 11,058 | -11.8 | % | ||||||||||||
| Net realized investment gains (losses) | (265 | ) | 483 | (1,084 | ) | 1,818 | (1,978 | ) | NM | ||||||||||
| Other revenues | 4,939 | 6,209 | 6,946 | 7,104 | 7,286 | 47.5 | % | ||||||||||||
| Total revenues | 105,936 | 111,563 | 116,987 | 111,981 | 111,288 | 5.1 | % | ||||||||||||
Expenses: | |||||||||||||||||||
| Losses and loss adjustment expenses | 63,261 | 68,112 | 69,713 | 65,393 | 66,379 | 4.9 | % | ||||||||||||
| Acquisition expenses | 17,983 | 19,691 | 19,536 | 17,325 | 19,552 | 8.7 | % | ||||||||||||
| Operating expenses | 18,802 | 17,872 | 23,499 | 19,987 | 21,580 | 14.8 | % | ||||||||||||
| Dividends to policyholders | 1,762 | 567 | 2,343 | 1,422 | 1,011 | -42.6 | % | ||||||||||||
| Interest expense | 4,040 | 4,105 | 3,997 | 3,873 | 3,773 | -6.6 | % | ||||||||||||
| Total losses and expenses | 105,848 | 110,347 | 119,088 | 108,000 | 112,295 | 6.1 | % | ||||||||||||
| Pre-tax income (loss) | 88 | 1,216 | (2,101 | ) | 3,981 | (1,007 | ) | NM | |||||||||||
| Income tax expense (benefit): | |||||||||||||||||||
| Current | - | - | - | - | - | NM | |||||||||||||
| Deferred | 71 | 476 | (875 | ) | 1,500 | (245 | ) | NM | |||||||||||
| Total income tax expense (benefit) | 71 | 476 | (875 | ) | 1,500 | (245 | ) | NM | |||||||||||
| Net income (loss) | $ | 17 | $ | 740 | $ | (1,226 | ) | $ | 2,481 | $ | (762 | ) | NM | ||||||
| Pre-tax operating income (loss) | $ | 353 | $ | 733 | $ | (1,017 | ) | $ | 2,163 | $ | 971 | NM | |||||||
| After-tax operating income (loss) | $ | 189 | $ | 426 | $ | (521 | ) | $ | 1,299 | $ | 524 | NM | |||||||
5
| Consolidated Statements of Operations | ||||||||||
(In Thousands) | ||||||||||
Six | Six | % Change | ||||||||
Months | Months | Six | ||||||||
2006 | 2005 | Months | ||||||||
Gross Premiums Written | $ | 234,042 | $ | 216,382 | 8.2 | % | ||||
Net Premiums Written | $ | 199,781 | $ | 193,596 | 3.2 | % | ||||
Revenues: | ||||||||||
| Net premiums earned | $ | 186,581 | $ | 176,443 | 5.7 | % | ||||
| Net investment income | 22,458 | 24,254 | -7.4 | % | ||||||
| Net realized investment gains (losses) | (160 | ) | 2,718 | NM | ||||||
| Other revenues | 14,390 | 11,131 | 29.3 | % | ||||||
| Total revenues | 223,269 | 214,546 | 4.1 | % | ||||||
Expenses: | ||||||||||
| Losses and loss adjustment expenses | 131,772 | 157,249 | -16.2 | % | ||||||
| Acquisition expenses | 36,877 | 36,654 | 0.6 | % | ||||||
| Operating expenses | 41,567 | 36,500 | 13.9 | % | ||||||
| Dividends to policyholders | 2,433 | 2,264 | 7.5 | % | ||||||
| Interest expense | 7,646 | 8,009 | -4.5 | % | ||||||
| Total losses and expenses | 220,295 | 240,676 | -8.5 | % | ||||||
| Pre-tax income (loss) | 2,974 | (26,130 | ) | NM | ||||||
| Income tax expense (benefit): | ||||||||||
| Current | - | - | NM | |||||||
| Deferred | 1,255 | (5,596 | ) | NM | ||||||
| Total income tax expense (benefit) | 1,255 | (5,596 | ) | NM | ||||||
| Net income (loss) | $ | 1,719 | $ | (20,534 | ) | NM | ||||
| Pre-tax operating income (loss) | $ | 3,134 | $ | (28,848 | ) | NM | ||||
| After-tax operating income (loss) | $ | 1,823 | $ | (22,301 | ) | NM | ||||
6
| Consolidated Balance Sheets | ||||||||||||||||
(In Thousands) | ||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | ||||||||||||
Assets: | ||||||||||||||||
| Investments in fixed maturities available for sale | $ | 1,256,169 | $ | 1,184,301 | $ | 1,049,254 | $ | 994,972 | $ | 913,376 | ||||||
| Short-term investments | 61,058 | 67,636 | 57,997 | 63,641 | 70,994 | |||||||||||
| Short-term investments, loaned securities collateral | 90,114 | 63,751 | - | 9,991 | 4,771 | |||||||||||
| Total investments | 1,407,341 | 1,315,688 | 1,107,251 | 1,068,604 | 989,141 | |||||||||||
| Cash | 30,464 | 43,282 | 30,239 | 13,667 | 26,004 | |||||||||||
| Accrued investment income | 14,147 | 13,703 | 11,528 | 11,395 | 9,312 | |||||||||||
| Premiums receivable | 183,713 | 212,847 | 197,582 | 209,354 | 205,825 | |||||||||||
| Reinsurance receivables | 1,129,857 | 1,115,953 | 1,094,674 | 1,086,830 | 1,071,332 | |||||||||||
| Deferred income taxes | 90,301 | 98,568 | 103,656 | 107,908 | 110,452 | |||||||||||
| Deferred acquisition costs | 34,655 | 39,432 | 34,236 | 39,308 | 37,336 | |||||||||||
| Funds held by reinsureds | 150,078 | 153,064 | 146,374 | 148,512 | 151,873 | |||||||||||
| Other assets | 169,028 | 167,192 | 162,505 | 179,061 | 171,713 | |||||||||||
| Total assets | $ | 3,209,584 | $ | 3,159,729 | $ | 2,888,045 | $ | 2,864,639 | $ | 2,772,988 | ||||||
Liabilities: | ||||||||||||||||
| Unpaid losses and loss adjustment expenses | $ | 2,005,386 | $ | 1,966,907 | $ | 1,820,043 | $ | 1,776,822 | $ | 1,727,369 | ||||||
| Unearned premiums | 175,025 | 199,153 | 173,432 | 199,129 | 189,140 | |||||||||||
| Debt | 208,586 | 216,808 | 196,181 | 189,181 | 148,303 | |||||||||||
| Accounts payable, accrued expenses | ||||||||||||||||
| and other liabilities | 191,309 | 198,441 | 209,654 | 205,114 | 220,350 | |||||||||||
| Funds held under reinsurance treaties | 105,572 | 96,067 | 78,058 | 79,815 | 79,966 | |||||||||||
| Dividends to policyholders | 3,992 | 3,931 | 4,452 | 4,998 | 4,725 | |||||||||||
| Payable under securities loan agreements | 90,118 | 63,758 | 2 | 10,005 | 4,804 | |||||||||||
| Total liabilities | 2,779,988 | 2,745,065 | 2,481,822 | 2,465,064 | 2,374,657 | |||||||||||
Shareholders' Equity: | ||||||||||||||||
| Class A Common stock | 171,090 | 171,090 | 171,090 | 171,090 | 171,090 | |||||||||||
| Additional paid-in capital | 109,331 | 109,331 | 109,331 | 110,042 | 110,552 | |||||||||||
| Retained earnings | 188,532 | 188,409 | 187,265 | 185,393 | 180,626 | |||||||||||
| Accumulated other comprehensive income (loss) | 1,377 | (14,861 | ) | (22,684 | ) | (33,358 | ) | (37,630 | ) | |||||||
| Treasury stock, at cost | (40,734 | ) | (39,305 | ) | (38,779 | ) | (33,592 | ) | (26,307 | ) | ||||||
| Total shareholders' equity | 429,596 | 414,664 | 406,223 | 399,575 | 398,331 | |||||||||||
| Total liabilities and shareholders' equity | $ | 3,209,584 | $ | 3,159,729 | $ | 2,888,045 | $ | 2,864,639 | $ | 2,772,988 | ||||||
7
| Invested Assets and Net Investment Income | ||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Total Investments & Cash | ||||||||||||||||||||||
| As reported | $ | 1,437,805 | $ | 1,358,970 | $ | 1,137,490 | $ | 1,082,271 | $ | 1,015,145 | $ | 1,015,145 | $ | 1,437,805 | ||||||||
| Less: | ||||||||||||||||||||||
| Securities lending activity | 90,118 | 63,758 | 2 | 10,005 | 4,804 | 4,804 | 90,118 | |||||||||||||||
| Unrealized gain (loss) | 26,563 | 1,771 | (4,302 | ) | (21,448 | ) | (28,820 | ) | (28,820 | ) | 26,563 | |||||||||||
| Total adjusted investments & cash | $ | 1,321,124 | $ | 1,293,441 | $ | 1,141,790 | $ | 1,093,714 | $ | 1,039,161 | $ | 1,039,161 | $ | 1,321,124 | ||||||||
Net Investment Income | ||||||||||||||||||||||
| As reported | $ | 12,542 | $ | 12,648 | $ | 11,761 | $ | 11,400 | $ | 11,058 | $ | 22,458 | $ | 24,254 | ||||||||
| Funds held: | ||||||||||||||||||||||
| Assumed | 129 | 535 | 545 | 335 | 537 | 872 | 316 | |||||||||||||||
| Ceded | (1,871 | ) | (1,694 | ) | (1,897 | ) | (1,519 | ) | (1,643 | ) | (3,162 | ) | (4,308 | ) | ||||||||
| Total funds held | (1,742 | ) | (1,159 | ) | (1,352 | ) | (1,184 | ) | (1,106 | ) | (2,290 | ) | (3,992 | ) | ||||||||
| Total adjusted investment income | $ | 14,284 | $ | 13,807 | $ | 13,113 | $ | 12,584 | $ | 12,164 | $ | 24,748 | $ | 28,246 | ||||||||
Yield | ||||||||||||||||||||||
| As reported | 3.42 | % | 3.62 | % | 3.77 | % | 4.11 | % | 4.22 | % | 4.17 | % | 3.31 | % | ||||||||
| Investment portfolio | 4.21 | % | 4.22 | % | 4.31 | % | 4.50 | % | 4.56 | % | 4.53 | % | 4.08 | % | ||||||||
Duration (in years) | 3.9 | 3.7 | 3.7 | 3.7 | 3.5 | 3.5 | 3.9 | |||||||||||||||
PMA Capital Corporation | |||||||
| Debt | |||||||
(Dollars in Thousands) | |||||||
| Amount | |||||||
| Outstanding | Maturity | ||||||
6.50% convertible debt | $ | 32,165 | 20221 | ||||
| Derivative component of 6.50% convertible debt | 4,953 | ||||||
4.25% convertible debt | 655 | 20222 | |||||
| 8.50% senior notes | 57,500 | 2018 | |||||
Junior subordinated debt 3 | 43,816 | 2033 | |||||
Surplus notes 4 | 10,000 | 2035 | |||||
| Unamortized debt discount | (786 | ) | |||||
| Total long-term debt | $ | 148,303 | |||||
1 | Holders of this debt, at their option, may require us to repurchase all or a portion of their debentures on June 30, 2009 at 114% of the principal amount. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share for $29.7 million principal amount and $15.891 per share for $2.5 million principal amount. | ||||||
2 | Holders of this debt, at their option, may require us to repurchase all or a portion of their debentures on September 30, 2006, 2008, 2010, 2012 and 2017. This debt may be converted at any time, at the holder's option, at a current price of $16.368 per share. | ||||||
3 | Weighted average interest rate on junior subordinated debt is 9.39% as of June 30, 2006. | ||||||
4 | Interest rate on surplus notes is 9.63% as of June 30, 2006. | ||||||
8
| Statements of Operations - Consolidating | |||||||||||||
| Six Months Ended June 30, 2006 | |||||||||||||
(In Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 233,065 | $ | (381 | ) | $ | 1,358 | $ | 234,042 | ||||
Net Premiums Written | $ | 199,029 | $ | (381 | ) | $ | 1,133 | $ | 199,781 | ||||
Revenues: | |||||||||||||
| Net premiums earned | $ | 186,024 | $ | (381 | ) | $ | 938 | $ | 186,581 | ||||
| Net investment income | 17,312 | (463 | ) | 5,609 | 22,458 | ||||||||
| Other revenues | 14,239 | 151 | - | 14,390 | |||||||||
| Operating revenues | 217,575 | (693 | ) | 6,547 | 223,429 | ||||||||
Losses and Expenses: | |||||||||||||
| Losses and loss adjustment expenses | 132,201 | - | (429 | ) | 131,772 | ||||||||
| Acquisition expenses | 37,142 | - | (265 | ) | 36,877 | ||||||||
| Operating expenses | 30,518 | 4,397 | 6,652 | 41,567 | |||||||||
| Dividends to policyholders | 2,433 | - | - | 2,433 | |||||||||
| Total losses and expenses | 202,294 | 4,397 | 5,958 | 212,649 | |||||||||
| Operating income (loss) before income taxes | |||||||||||||
| and interest expense | 15,281 | (5,090 | ) | 589 | 10,780 | ||||||||
| Interest expense | 469 | 7,177 | - | 7,646 | |||||||||
| Pre-tax operating income (loss) | $ | 14,812 | $ | (12,267 | ) | $ | 589 | 3,134 | |||||
| Net realized investment losses | (160 | ) | |||||||||||
| Pre-tax income | $ | 2,974 | |||||||||||
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. | ||||||||
9
| Statements of Operations - Consolidating | |||||||||||||
| Six Months Ended June 30, 2005 | |||||||||||||
(In Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 209,952 | $ | (414 | ) | $ | 6,844 | $ | 216,382 | ||||
Net Premiums Written | $ | 187,577 | $ | (414 | ) | $ | 6,433 | $ | 193,596 | ||||
Revenues: | |||||||||||||
| Net premiums earned | $ | 170,241 | $ | (414 | ) | $ | 6,616 | $ | 176,443 | ||||
| Net investment income | 15,257 | 528 | 8,469 | 24,254 | |||||||||
| Other revenues | 10,871 | 260 | - | 11,131 | |||||||||
| Operating revenues | 196,369 | 374 | 15,085 | 211,828 | |||||||||
Losses and Expenses: | |||||||||||||
| Losses and loss adjustment expenses | 123,549 | - | 33,700 | 157,249 | |||||||||
| Acquisition expenses | 34,021 | - | 2,633 | 36,654 | |||||||||
| Operating expenses | 24,982 | 4,253 | 7,265 | 36,500 | |||||||||
| Dividends to policyholders | 2,264 | - | - | 2,264 | |||||||||
| Total losses and expenses | 184,816 | 4,253 | 43,598 | 232,667 | |||||||||
| Operating income (loss) before income taxes | |||||||||||||
| and interest expense | 11,553 | (3,879 | ) | (28,513 | ) | (20,839 | ) | ||||||
| Interest expense | - | 8,009 | - | 8,009 | |||||||||
| Pre-tax operating income (loss) | $ | 11,553 | $ | (11,888 | ) | $ | (28,513 | ) | (28,848 | ) | |||
| Net realized investment gains | 2,718 | ||||||||||||
| Pre-tax loss | $ | (26,130 | ) | ||||||||||
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. | ||||||||
10
| Statements of Operations - Consolidating | |||||||||||||
| Three Months Ended June 30, 2006 | |||||||||||||
(In Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 99,328 | $ | (213 | ) | $ | 960 | $ | 100,075 | ||||
Net Premiums Written | $ | 85,639 | $ | (213 | ) | $ | 527 | $ | 85,953 | ||||
Revenues: | |||||||||||||
| Net premiums earned | $ | 94,803 | $ | (213 | ) | $ | 332 | $ | 94,922 | ||||
| Net investment income | 8,753 | (103 | ) | 2,408 | 11,058 | ||||||||
| Other revenues | 7,165 | 121 | - | 7,286 | |||||||||
| Operating revenues | 110,721 | (195 | ) | 2,740 | 113,266 | ||||||||
Losses and Expenses: | |||||||||||||
| Losses and loss adjustment expenses | 67,682 | - | (1,303 | ) | 66,379 | ||||||||
| Acquisition expenses | 18,923 | - | 629 | 19,552 | |||||||||
| Operating expenses | 16,193 | 2,401 | 2,986 | 21,580 | |||||||||
| Dividends to policyholders | 1,011 | - | - | 1,011 | |||||||||
| Total losses and expenses | 103,809 | 2,401 | 2,312 | 108,522 | |||||||||
| Operating income (loss) before income taxes | |||||||||||||
| and interest expense | 6,912 | (2,596 | ) | 428 | 4,744 | ||||||||
| Interest expense | 241 | 3,532 | - | 3,773 | |||||||||
| Pre-tax operating income (loss) | $ | 6,671 | $ | (6,128 | ) | $ | 428 | 971 | |||||
| Net realized investment losses | (1,978 | ) | |||||||||||
| Pre-tax loss | $ | (1,007 | ) | ||||||||||
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. | ||||||||
11
| Statements of Operations - Consolidating | |||||||||||||
| Three Months Ended June 30, 2005 | |||||||||||||
(In Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 93,680 | $ | (220 | ) | $ | 1,609 | $ | 95,069 | ||||
Net Premiums Written | $ | 82,103 | $ | (220 | ) | $ | 1,504 | $ | 83,387 | ||||
Revenues: | |||||||||||||
| Net premiums earned | $ | 85,541 | $ | (220 | ) | $ | 3,399 | $ | 88,720 | ||||
| Net investment income | 7,716 | 257 | 4,569 | 12,542 | |||||||||
| Other revenues | 4,906 | 33 | - | 4,939 | |||||||||
| Operating revenues | 98,163 | 70 | 7,968 | 106,201 | |||||||||
Losses and Expenses: | |||||||||||||
| Losses and loss adjustment expenses | 61,331 | - | 1,930 | 63,261 | |||||||||
| Acquisition expenses | 17,254 | - | 729 | 17,983 | |||||||||
| Operating expenses | 12,875 | 1,751 | 4,176 | 18,802 | |||||||||
| Dividends to policyholders | 1,762 | - | - | 1,762 | |||||||||
| Total losses and expenses | 93,222 | 1,751 | 6,835 | 101,808 | |||||||||
| Operating income (loss) before income taxes | |||||||||||||
| and interest expense | 4,941 | (1,681 | ) | 1,133 | 4,393 | ||||||||
| Interest expense | - | 4,040 | - | 4,040 | |||||||||
| Pre-tax operating income (loss) | $ | 4,941 | $ | (5,721 | ) | $ | 1,133 | 353 | |||||
| Net realized investment losses | (265 | ) | |||||||||||
| Pre-tax income | $ | 88 | |||||||||||
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. | ||||||||
12
| Statements of Operations - PMA Insurance Group | ||||||||||||||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | % Change | % Change | ||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | 2nd | Six | ||||||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | Quarter | Months | ||||||||||||||||||||
Gross Premiums Written | $ | 93,680 | $ | 129,163 | $ | 82,490 | $ | 133,737 | $ | 99,328 | $ | 233,065 | $ | 209,952 | 6.0 | % | 11.0 | % | ||||||||||
Net Premiums Written | $ | 82,103 | $ | 116,877 | $ | 71,339 | $ | 113,390 | $ | 85,639 | $ | 199,029 | $ | 187,577 | 4.3 | % | 6.1 | % | ||||||||||
Revenues: | ||||||||||||||||||||||||||||
| Net premiums earned | $ | 85,541 | $ | 92,214 | $ | 96,187 | $ | 91,221 | $ | 94,803 | $ | 186,024 | $ | 170,241 | 10.8 | % | 9.3 | % | ||||||||||
| Net investment income | 7,716 | 8,160 | 8,328 | 8,559 | 8,753 | 17,312 | 15,257 | 13.4 | % | 13.5 | % | |||||||||||||||||
| Other revenues | 4,906 | 6,172 | 6,837 | 7,074 | 7,165 | 14,239 | 10,871 | 46.0 | % | 31.0 | % | |||||||||||||||||
| Total revenues | 98,163 | 106,546 | 111,352 | 106,854 | 110,721 | 217,575 | 196,369 | 12.8 | % | 10.8 | % | |||||||||||||||||
Losses and Expenses: | ||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | 61,331 | 67,995 | 68,732 | 64,519 | 67,682 | 132,201 | 123,549 | 10.4 | % | 7.0 | % | |||||||||||||||||
| Acquisition expenses | 17,254 | 18,279 | 18,998 | 18,219 | 18,923 | 37,142 | 34,021 | 9.7 | % | 9.2 | % | |||||||||||||||||
| Operating expenses | 12,875 | 13,100 | 17,191 | 14,325 | 16,193 | 30,518 | 24,982 | 25.8 | % | 22.2 | % | |||||||||||||||||
| Dividends to policyholders | 1,762 | 567 | 2,343 | 1,422 | 1,011 | 2,433 | 2,264 | -42.6 | % | 7.5 | % | |||||||||||||||||
| Total losses and expenses | 93,222 | 99,941 | 107,264 | 98,485 | 103,809 | 202,294 | 184,816 | 11.4 | % | 9.5 | % | |||||||||||||||||
| Operating income before income taxes | ||||||||||||||||||||||||||||
| and interest expense | 4,941 | 6,605 | 4,088 | 8,369 | 6,912 | 15,281 | 11,553 | 39.9 | % | 32.3 | % | |||||||||||||||||
| Interest expense | - | 5 | 221 | 228 | 241 | 469 | - | NM | NM | |||||||||||||||||||
| Pre-tax operating income | $ | 4,941 | $ | 6,600 | $ | 3,867 | $ | 8,141 | $ | 6,671 | $ | 14,812 | $ | 11,553 | 35.0 | % | 28.2 | % | ||||||||||
13
| Insurance Ratios - PMA Insurance Group | ||||||||||||||||||||||||||||
2nd Quarter 2005 | 3rd Quarter 2005 | 4th Quarter 2005 | 1st Quarter 2006 | 2nd Quarter 2006 | Six Months 2006 | Six Months 2005 | Point Chg. 2nd Quarter Better (Worse) | Point Chg. Six Months Better (Worse) | ||||||||||||||||||||
Ratios - GAAP Basis: | ||||||||||||||||||||||||||||
| Loss and LAE ratio | 71.7 | % | 73.7 | % | 71.5 | % | 70.7 | % | 71.4 | % | 71.1 | % | 72.6 | % | 0.3 | 1.5 | ||||||||||||
| Expense ratio: | ||||||||||||||||||||||||||||
| Acquisition expenses | 20.2 | % | 19.8 | % | 19.8 | % | 20.0 | % | 20.0 | % | 20.0 | % | 20.0 | % | 0.2 | - | ||||||||||||
Operating expenses 1 | 10.3 | % | 9.2 | % | 12.5 | % | 9.8 | % | 10.4 | % | 10.1 | % | 9.9 | % | (0.1 | ) | (0.2 | ) | ||||||||||
| Total expense ratio | 30.5 | % | 29.0 | % | 32.3 | % | 29.8 | % | 30.4 | % | 30.1 | % | 29.9 | % | 0.1 | (0.2 | ) | |||||||||||
| Policyholders' dividend ratio | 2.1 | % | 0.6 | % | 2.4 | % | 1.6 | % | 1.1 | % | 1.3 | % | 1.3 | % | 1.0 | - | ||||||||||||
| Combined ratio | 104.3 | % | 103.3 | % | 106.2 | % | 102.1 | % | 102.9 | % | 102.5 | % | 103.8 | % | 1.4 | 1.3 | ||||||||||||
| Net investment income ratio | -9.0 | % | -8.8 | % | -8.7 | % | -9.4 | % | -9.2 | % | -9.3 | % | -9.0 | % | 0.2 | 0.3 | ||||||||||||
| Operating ratio | 95.3 | % | 94.5 | % | 97.5 | % | 92.7 | % | 93.7 | % | 93.2 | % | 94.8 | % | 1.6 | 1.6 | ||||||||||||
1 | The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $8.9 million, $8.4 million, $12.1 million, $8.9 million and $10.0 million for the second, third and fourth quarters of 2005 and the first and second quarters of 2006, respectively. | ||||||||||||||||||||
14
| Statements of Operations - Run-off Operations | ||||||||||||||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | % Change | % Change | ||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | 2nd | Six | ||||||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | Quarter | Months | ||||||||||||||||||||
Gross Premiums Written | $ | 1,609 | $ | 1,138 | $ | 4,959 | $ | 398 | $ | 960 | $ | 1,358 | $ | 6,844 | -40.3 | % | -80.2 | % | ||||||||||
Net Premiums Written | $ | 1,504 | $ | 789 | $ | 3,028 | $ | 606 | $ | 527 | $ | 1,133 | $ | 6,433 | -65.0 | % | -82.4 | % | ||||||||||
Revenues: | ||||||||||||||||||||||||||||
| Net premiums earned | $ | 3,399 | $ | 204 | $ | 3,386 | $ | 606 | $ | 332 | $ | 938 | $ | 6,616 | -90.2 | % | -85.8 | % | ||||||||||
| Net investment income | 4,569 | 4,217 | 3,652 | 3,201 | 2,408 | 5,609 | 8,469 | -47.3 | % | -33.8 | % | |||||||||||||||||
| Total revenues | 7,968 | 4,421 | 7,038 | 3,807 | 2,740 | 6,547 | 15,085 | -65.6 | % | -56.6 | % | |||||||||||||||||
Losses and Expenses: | ||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | 1,930 | 117 | 981 | 874 | (1,303 | ) | (429 | ) | 33,700 | NM | NM | |||||||||||||||||
| Acquisition expenses | 729 | 1,412 | 538 | (894 | ) | 629 | (265 | ) | 2,633 | -13.7 | % | NM | ||||||||||||||||
| Operating expenses | 4,176 | 3,150 | 3,681 | 3,666 | 2,986 | 6,652 | 7,265 | -28.5 | % | -8.4 | % | |||||||||||||||||
| Total losses and expenses | 6,835 | 4,679 | 5,200 | 3,646 | 2,312 | 5,958 | 43,598 | -66.2 | % | -86.3 | % | |||||||||||||||||
| Pre-tax operating income (loss) | $ | 1,133 | $ | (258 | ) | $ | 1,838 | $ | 161 | $ | 428 | $ | 589 | $ | (28,513 | ) | -62.2 | % | NM | |||||||||
15
| Statements of Operations - Corporate & Other | ||||||||||||||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | % Change | % Change | ||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | 2nd | Six | ||||||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | Quarter | Months | ||||||||||||||||||||
Gross Premiums Written | $ | (220 | ) | $ | (195 | ) | $ | (209 | ) | $ | (168 | ) | $ | (213 | ) | $ | (381 | ) | $ | (414 | ) | 3.2 | % | 8.0 | % | |||
Net Premiums Written | $ | (220 | ) | $ | (195 | ) | $ | (209 | ) | $ | (168 | ) | $ | (213 | ) | $ | (381 | ) | $ | (414 | ) | 3.2 | % | 8.0 | % | |||
Revenues: | ||||||||||||||||||||||||||||
| Net premiums earned | $ | (220 | ) | $ | (195 | ) | $ | (209 | ) | $ | (168 | ) | $ | (213 | ) | $ | (381 | ) | $ | (414 | ) | 3.2 | % | 8.0 | % | |||
| Net investment income | 257 | 271 | (219 | ) | (360 | ) | (103 | ) | (463 | ) | 528 | NM | NM | |||||||||||||||
| Other revenues | 33 | 37 | 109 | 30 | 121 | 151 | 260 | NM | -41.9 | % | ||||||||||||||||||
| Total revenues | 70 | 113 | (319 | ) | (498 | ) | (195 | ) | (693 | ) | 374 | NM | NM | |||||||||||||||
Losses and Expenses: | ||||||||||||||||||||||||||||
| Operating expenses | 1,751 | 1,622 | 2,627 | 1,996 | 2,401 | 4,397 | 4,253 | 37.1 | % | 3.4 | % | |||||||||||||||||
| Total losses and expenses | 1,751 | 1,622 | 2,627 | 1,996 | 2,401 | 4,397 | 4,253 | 37.1 | % | 3.4 | % | |||||||||||||||||
| Operating loss before income taxes | ||||||||||||||||||||||||||||
| and interest expense | (1,681 | ) | (1,509 | ) | (2,946 | ) | (2,494 | ) | (2,596 | ) | (5,090 | ) | (3,879 | ) | -54.4 | % | -31.2 | % | ||||||||||
| Interest expense | 4,040 | 4,100 | 3,776 | 3,645 | 3,532 | 7,177 | 8,009 | -12.6 | % | -10.4 | % | |||||||||||||||||
| Pre-tax operating loss | $ | (5,721 | ) | $ | (5,609 | ) | $ | (6,722 | ) | $ | (6,139 | ) | $ | (6,128 | ) | $ | (12,267 | ) | $ | (11,888 | ) | -7.1 | % | -3.2 | % | |||
16
| Operating Cash Flows - Consolidated | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Receipts: | ||||||||||||||||||||||
| Premiums and other revenues collected | $ | 108,706 | $ | 90,858 | $ | 98,661 | $ | 104,991 | $ | 96,652 | $ | 201,643 | $ | 205,381 | ||||||||
| Investment income received | 14,656 | 15,942 | 16,393 | 15,368 | 14,890 | 30,258 | 29,470 | |||||||||||||||
| Total receipts | 123,362 | 106,800 | 115,054 | 120,359 | 111,542 | 231,901 | 234,851 | |||||||||||||||
Disbursements: | ||||||||||||||||||||||
| Losses and LAE paid: | ||||||||||||||||||||||
| Losses and LAE paid - current year | 14,240 | 16,593 | 20,720 | 3,496 | 17,337 | 20,833 | 18,052 | |||||||||||||||
| Losses and LAE paid - prior years | 134,182 | 86,329 | 174,212 | 92,597 | 92,004 | 184,601 | 246,494 | |||||||||||||||
| Total losses and LAE paid | 148,422 | 102,922 | 194,932 | 96,093 | 109,341 | 205,434 | 264,546 | |||||||||||||||
| Insurance operating expenses paid | 39,585 | 39,009 | 27,271 | 46,203 | 39,618 | 85,821 | 78,217 | |||||||||||||||
| Policyholders' dividends paid | 1,284 | 820 | 531 | 246 | 397 | 643 | 3,399 | |||||||||||||||
| Interest on corporate debt | 1,987 | 5,327 | 2,197 | 4,791 | 2,965 | 7,756 | 6,374 | |||||||||||||||
| Total disbursements | 191,278 | 148,078 | 224,931 | 147,333 | 152,321 | 299,654 | 352,536 | |||||||||||||||
| Net other | 1,046 | 3,564 | (15,349 | ) | (12,368 | ) | 7,406 | (4,962 | ) | 8,304 | ||||||||||||
| Net operating cash flows | $ | (66,870 | ) | $ | (37,714 | ) | $ | (125,226 | ) | $ | (39,342 | ) | $ | (33,373 | ) | $ | (72,715 | ) | $ | (109,381 | ) | |
17
| Operating Cash Flows - PMA Insurance Group | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Receipts: | ||||||||||||||||||||||
| Premiums and other revenues collected | $ | 100,170 | $ | 91,212 | $ | 97,910 | $ | 99,740 | $ | 94,320 | $ | 194,060 | $ | 193,318 | ||||||||
| Investment income received | 9,682 | 10,262 | 10,606 | 10,479 | 10,598 | 21,077 | 19,086 | |||||||||||||||
| Total receipts | 109,852 | 101,474 | 108,516 | 110,219 | 104,918 | 215,137 | 212,404 | |||||||||||||||
Disbursements: | ||||||||||||||||||||||
| Losses and LAE paid: | ||||||||||||||||||||||
| Losses and LAE paid - current year | 14,233 | 16,584 | 20,720 | 3,496 | 17,337 | 20,833 | 18,043 | |||||||||||||||
| Losses and LAE paid - prior years | 69,276 | 55,520 | 43,853 | 65,113 | 57,537 | 122,650 | 142,275 | |||||||||||||||
| Total Losses and LAE paid | 83,509 | 72,104 | 64,573 | 68,609 | 74,874 | 143,483 | 160,318 | |||||||||||||||
| Insurance operating expenses paid | 36,988 | 33,988 | 23,305 | 42,110 | 35,129 | 77,239 | 71,226 | |||||||||||||||
| Policyholders' dividends paid | 1,284 | 820 | 531 | 246 | 397 | 643 | 3,399 | |||||||||||||||
| Interest on corporate debt | - | - | 80 | 224 | 227 | 451 | - | |||||||||||||||
| Total disbursements | 121,781 | 106,912 | 88,489 | 111,189 | 110,627 | 221,816 | 234,943 | |||||||||||||||
| Net other | 2,002 | 6,012 | (18,742 | ) | (6,376 | ) | 1,955 | (4,421 | ) | 15,762 | ||||||||||||
| Net operating cash flows | $ | (9,927 | ) | $ | 574 | $ | 1,285 | $ | (7,346 | ) | $ | (3,754 | ) | $ | (11,100 | ) | $ | (6,777 | ) | |||
18
| Operating Cash Flows - Run-off Operations | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2005 | ||||||||||||||||
Receipts: | ||||||||||||||||||||||
| Premiums collected | $ | 8,536 | $ | (354 | ) | $ | 751 | $ | 5,251 | $ | 2,332 | $ | 7,583 | $ | 12,063 | |||||||
| Investment income received | 4,974 | 5,680 | 5,787 | 4,889 | 4,292 | 9,181 | 10,384 | |||||||||||||||
| Total receipts | 13,510 | 5,326 | 6,538 | 10,140 | 6,624 | 16,764 | 22,447 | |||||||||||||||
Disbursements: | ||||||||||||||||||||||
| Losses and LAE paid: | ||||||||||||||||||||||
| Losses and LAE paid - current year | 7 | 9 | - | - | - | - | 9 | |||||||||||||||
| Losses and LAE paid - prior years | 64,906 | 30,809 | 130,359 | 27,484 | 34,467 | 61,951 | 104,219 | |||||||||||||||
| Total losses and LAE paid | 64,913 | 30,818 | 130,359 | 27,484 | 34,467 | 61,951 | 104,228 | |||||||||||||||
| Insurance operating expenses paid | 2,597 | 5,021 | 3,966 | 4,093 | 4,489 | 8,582 | 6,991 | |||||||||||||||
| Total disbursements | 67,510 | 35,839 | 134,325 | 31,577 | 38,956 | 70,533 | 111,219 | |||||||||||||||
| Net other | (4,890 | ) | (1,912 | ) | 4,004 | 1,083 | 1,775 | 2,858 | (4,964 | ) | ||||||||||||
| Net operating cash flows | $ | (58,890 | ) | $ | (32,425 | ) | $ | (123,783 | ) | $ | (20,354 | ) | $ | (30,557 | ) | $ | (50,911 | ) | $ | (93,736 | ) | |
19
| Statutory Surplus | ||||||||||||||||
(In Thousands) | ||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2005 | 2005 | 2005 | 2006 | 20061 | ||||||||||||
PMA Pool 2 | $ | 299,219 | $ | 311,802 | 5 | $ | 315,056 | 5 | $ | 316,726 | 5 | $ | 321,114 | 4,5 | ||
PMA Capital Insurance Company 3 | 215,348 | 210,663 | 204,920 | 203,261 | 125,989 | 4,6 | ||||||||||
PMA Capital Corporation | ||||||||||||||||||||||
Statutory Financial Information - PMA Pool 2 | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
2nd | 3rd | 4th | 1st | 2nd | Six | Six | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Months | Months | ||||||||||||||||
2005 | 2005 | 2005 | 2006 | 20061 | 20061 | 2005 | ||||||||||||||||
| Net Premiums Written: | ||||||||||||||||||||||
| Workers' Compensation & Integrated | ||||||||||||||||||||||
| Disability | $ | 70,944 | $ | 101,435 | $ | 63,086 | $ | 100,096 | $ | 76,602 | $ | 176,698 | $ | 165,681 | ||||||||
| Other Commercial Lines | 10,998 | 13,487 | 4,723 | 11,048 | 6,687 | 17,735 | 21,785 | |||||||||||||||
| Total - PMA Pool | $ | 81,942 | $ | 114,922 | $ | 67,809 | $ | 111,144 | $ | 83,289 | $ | 194,433 | $ | 187,466 | ||||||||
| Statutory Ratios: | ||||||||||||||||||||||
| Loss and LAE ratio | 73.0 | % | 73.3 | % | 73.0 | % | 71.5 | % | 72.5 | % | 72.0 | % | 73.2 | % | ||||||||
| Underwriting expense ratio | 30.2 | % | 25.1 | % | 32.5 | % | 24.6 | % | 31.6 | % | 27.6 | % | 27.4 | % | ||||||||
| Policyholders' dividend ratio | 0.8 | % | 0.8 | % | 1.1 | % | 0.9 | % | 0.1 | % | 0.5 | % | 0.9 | % | ||||||||
| Combined ratio | 104.0 | % | 99.2 | % | 106.6 | % | 97.0 | % | 104.2 | % | 100.1 | % | 101.5 | % | ||||||||
| Operating ratio | 95.2 | % | 91.2 | % | 98.6 | % | 88.4 | % | 96.0 | % | 91.7 | % | 93.0 | % | ||||||||
1 | Estimated. | |||||||||||||||
2 | The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company. | |||||||||||||||
3 | In November 2003, we announced our decision to withdraw from the reinsurance business previously served by PMA Capital Insurance Company. The reinsurance business is currently in run-off. | |||||||||||||||
4 | Includes unassigned surplus of $141.8 million and $5.9 million for the PMA Pool and PMA Capital Insurance Company, respectively. | |||||||||||||||
5 | Includes $10 million related to surplus notes. | |||||||||||||||
6 | In May 2006, PMA Capital Insurance Company paid an extraordinary dividend in the amount of $73.5 million to its parent, PMA Capital Corporation. | |||||||||||||||
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| Industry Ratings and Market Information | ||||||||
Transfer Agent and Registrar: | Inquiries: | |||||||
| American Stock Transfer & Trust Company | William E. Hitselberger | |||||||
| Shareholder Relations | Chief Financial Officer | |||||||
| 59 Maiden Lane – Plaza Level | 215.665.5070 | |||||||
| New York, NY 10038 | e-mail: bhitselberger@pmacapital.com | |||||||
| www.amstock.com | ||||||||
| Investor Relations | ||||||||
Phone Inquiries: | 215.665.5046 | |||||||
| 800.937.5449 | investorrelations@pmacapital.com | |||||||
Email Inquiries: | Company Website: | |||||||
| info@amstock.com | www.pmacapital.com | |||||||
Securities Listing: | ||||||||
| The Corporation's Class A Common Stock is listed | ||||||||
on the NASDAQ Stock Market®. It trades under | ||||||||
| the stock symbol: PMACA. | ||||||||
Financial Strength Ratings (as of 8/02/2006): | ||||||||
A.M. Best | Moody's | |||||||
PMA Pool 1 | A- (4th of 16) | Ba1 (11th of 21) | ||||||
PMA Capital Insurance Company 2 | B+ (6th of 16) | B1 (14th of 21) | ||||||
1 | The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company. | |||||||
2 | In November 2003, we announced our decision to withdraw from the reinsurance business previously served by PMA Capital Insurance Company. The reinsurance business is in run-off. | |||||||
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