Pma Capital 8K Announces Third Quarter 2006 Results | PMACA 2 Nov 06

PMA Capital Corporation
Statistical Supplement
Third Quarter - 2006

Table of Contents
		Page
*Consolidated Highlights:*
Selected Financial Data - Third Quarter		1
Selected Financial Data - Year-to-date		2
Consolidated Statements of Operations - Per Share Data		3
Consolidated Statements of Operations - Third Quarter		5
Consolidated Statements of Operations - Year-to-date		6
Consolidated Balance Sheets		7
Invested Assets and Net Investment Income; Debt; Balance Sheet Impact of Commutations - Run-off Operations		8

*Segment Information:*
Statements of Operations - Consolidating - Year-to-date		9-10
Statements of Operations - Consolidating - Third Quarter		11-12
Statements of Operations - PMA Insurance Group		13
Insurance Ratios - PMA Insurance Group		14
Statements of Operations - Run-off Operations		15
Statements of Operations - Corporate & Other		16

*Operating Cash Flow Information:*
Operating Cash Flows - Consolidated		17
Operating Cash Flows - PMA Insurance Group		18
Operating Cash Flows - Run-off Operations		19

*Statutory Financial Information:*
Statutory Surplus; Statutory Financial Information - PMA Pool		20

*Other Information:*
Industry Ratings and Market Information		21

*Legend:*
NM - Not Meaningful

Note: Operating income (loss), which we define as GAAP net income (loss) excluding net realized investment gains and losses, is the financial performance measure used by our management and Board of Directors to evaluate and assess the results of our business segments because (i) net realized investment gains and losses are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments and (ii) in many instances, decisions to buy and sell securities are made at the holding company level, and such decisions result in net realized gains and losses that do not relate to the operations of the individual segments. Operating income (loss) does not replace net income (loss) as the GAAP measure of our consolidated results of operations. See pages 1 and 2 for reconciliations of operating results by segment to GAAP net income (loss).

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)

	3rd			4th			1st			2nd			3rd			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			3rd
	2005			2005			2006			2006			2006			Quarter

Gross Premiums Written by Segment:
PMA Insurance Group	$	129,163		$	82,490		$	133,737		$	99,328		$	133,903			3.7	%
Run-off Operations		1,138			4,959			398			960			526			-53.8	%
Corporate & Other		(195	)		(209	)		(168	)		(213	)		(158	)		19.0	%
Gross premiums written	$	130,106		$	87,240		$	133,967		$	100,075		$	134,271			3.2	%

Net Premiums Written by Segment:
PMA Insurance Group	$	116,877		$	71,339		$	113,390		$	85,639		$	107,795			-7.8	%
Run-off Operations		789			3,028			606			527			701			-11.2	%
Corporate & Other		(195	)		(209	)		(168	)		(213	)		(158	)		19.0	%
Net premiums written	$	117,471		$	74,158		$	113,828		$	85,953		$	108,338			-7.8	%

Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	6,600		$	3,867		$	8,141		$	6,671		$	8,351			26.5	%
Run-off Operations		(258	)		1,838			161			428			174			NM
Corporate & Other		(5,609	)		(6,722	)		(6,139	)		(6,128	)		(5,016	)		10.6	%
Pre-tax operating income (loss)		733			(1,017	)		2,163			971			3,509			NM
Net realized investment gains (losses)		483			(1,084	)		1,818			(1,978	)		(799	)		NM
Pre-tax income (loss)		1,216			(2,101	)		3,981			(1,007	)		2,710			NM
Income tax expense (benefit)		476			(875	)		1,500			(245	)		1,209			NM
Net income (loss)	$	740		$	(1,226	)	$	2,481		$	(762	)	$	1,501			NM
After-tax operating income (loss)	$	426		$	(521	)	$	1,299		$	524		$	2,020			NM

Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.02		$	(0.04	)	$	0.08		$	(0.02	)	$	0.05			NM
Less the impact of:
Realized gains (losses) after tax		0.01			(0.02	)		0.04			(0.04	)		(0.01	)		NM
After-tax operating income (loss)	$	0.01		$	(0.02	)	$	0.04		$	0.02		$	0.06			NM

Capitalization:
Debt	$	216,808		$	196,181		$	189,181		$	148,303		$	131,561			-39.3	%
Shareholders' equity excluding FAS 115 unrealized gain (loss)		413,513			409,019			413,516			417,064			418,372			1.2	%
Total capitalization excluding FAS 115 unrealized gain (loss)		630,321			605,200			602,697			565,367			549,933			-12.8	%
FAS 115 unrealized gain (loss)		1,151			(2,796	)		(13,941	)		(18,733	)		(6,169	)		NM
Total capitalization including FAS 115 unrealized gain (loss)	$	631,472		$	602,404		$	588,756		$	546,634		$	543,764			-13.9	%

Book Value Per Share:
Excluding FAS 115 unrealized gain (loss)	$	12.94		$	12.79		$	12.83		$	12.79		$	12.82			-0.9	%
Including FAS 115 unrealized gain (loss)	$	12.98		$	12.70		$	12.39		$	12.21		$	12.63			-2.7	%

Debt to Total Capital:
Excluding FAS 115 unrealized gain (loss)		34.4	%		32.4	%		31.4	%		26.2	%		23.9	%		-30.5	%
Including FAS 115 unrealized gain (loss)		34.3	%		32.6	%		32.1	%		27.1	%		24.2	%		-29.4	%

Interest Coverage:
Income before interest and income taxes
to interest expense		1.30			0.47			2.03			0.73			1.89			45.4	%

Operating income before interest and income taxes
to interest expense		1.18			0.75			1.56			1.26			2.15			82.2	%

PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)

	Nine			Nine			% Change
	Months			Months			Nine
	2006			2005			Months

Gross Premiums Written by Segment:
PMA Insurance Group	$	366,968		$	339,115			8.2	%
Run-off Operations		1,884			7,982			-76.4	%
Corporate & Other		(539	)		(609	)		11.5	%
Gross premiums written	$	368,313		$	346,488			6.3	%

Net Premiums Written by Segment:
PMA Insurance Group	$	306,824		$	304,454			0.8	%
Run-off Operations		1,834			7,222			-74.6	%
Corporate & Other		(539	)		(609	)		11.5	%
Net premiums written	$	308,119		$	311,067			-0.9	%

Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group	$	23,163		$	18,153			27.6	%
Run-off Operations		763			(28,771	)		NM
Corporate & Other		(17,283	)		(17,497	)		1.2	%
Pre-tax operating income (loss)		6,643			(28,115	)		NM
Net realized investment gains (losses)		(959	)		3,201			NM
Pre-tax income (loss)		5,684			(24,914	)		NM
Income tax expense (benefit)		2,464			(5,120	)		NM
Net income (loss)	$	3,220		$	(19,794	)		NM
After-tax operating income (loss)	$	3,843		$	(21,875	)		NM

Diluted Earnings (Loss) Per Share:
Net income (loss)	$	0.10		$	(0.63	)		NM
Less the impact of:
Realized gains (losses) after tax		(0.02	)		0.06			NM
After-tax operating income (loss)	$	0.12		$	(0.69	)		NM

PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data

	3rd		4th			1st		2nd			3rd		Nine		Nine
	Quarter		Quarter			Quarter		Quarter			Quarter		Months		Months
	2005		2005			2006		2006			2006		2006		2005

Diluted Earnings (Loss) Per Share:

Net income (loss)	$	0.02	$	(0.04	)	$	0.08	$	(0.02	)	$	0.05	$	0.10	$	(0.63	)

Pre-tax operating income (loss)	$	0.02	$	(0.03	)	$	0.07	$	0.03		$	0.11	$	0.20	$	(0.89	)

After-tax operating income (loss)	$	0.01	$	(0.02	)	$	0.04	$	0.02		$	0.06	$	0.12	$	(0.69	)

Diluted weighted average common
shares outstanding		32,244,295		31,833,384			32,405,934		32,132,618			32,922,643		32,669,303		31,631,850


Dividends declared:
Class A Common stock	$	-	$	-		$	-	$	-		$	-	$	-	$	-

Actual common shares issued
and outstanding		31,956,983		31,983,283			32,239,288		32,613,234			32,646,689		32,646,689		31,956,983


Class A Common Stock prices:
High	$	9.50	$	9.73		$	10.43	$	10.49		$	10.75	$	10.75	$	10.65
Low	$	7.83	$	7.99		$	8.68	$	9.24		$	8.60	$	8.60	$	5.91
Close	$	8.78	$	9.13		$	10.18	$	10.30		$	8.82	$	8.82	$	8.78

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PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)

	3rd		4th			1st		2nd			3rd			% Change
	Quarter		Quarter			Quarter		Quarter			Quarter			3rd
	2005		2005			2006		2006			2006			Quarter

Gross Premiums Written	$	130,106	$	87,240		$	133,967	$	100,075		$	134,271			3.2	%

Net Premiums Written	$	117,471	$	74,158		$	113,828	$	85,953		$	108,338			-7.8	%

Revenues:
Net premiums earned	$	92,223	$	99,364		$	91,659	$	94,922		$	95,284			3.3	%
Net investment income		12,648		11,761			11,400		11,058			10,747			-15.0	%
Net realized investment gains (losses)		483		(1,084	)		1,818		(1,978	)		(799	)		NM
Other revenues		6,209		6,946			7,104		7,286			6,624			6.7	%
Total revenues		111,563		116,987			111,981		111,288			111,856			0.3	%

Expenses:
Losses and loss adjustment expenses		68,112		69,713			65,393		66,379			66,754			-2.0	%
Acquisition expenses		19,691		19,536			17,325		19,552			19,811			0.6	%
Operating expenses		17,872		23,499			19,987		21,580			18,953			6.0	%
Dividends to policyholders		567		2,343			1,422		1,011			589			3.9	%
Interest expense		4,105		3,997			3,873		3,773			3,039			-26.0	%
Total losses and expenses		110,347		119,088			108,000		112,295			109,146			-1.1	%

Pre-tax income (loss)		1,216		(2,101	)		3,981		(1,007	)		2,710			NM

Income tax expense (benefit):
Current		-		-			-		-			-			NM
Deferred		476		(875	)		1,500		(245	)		1,209			NM

Total income tax expense (benefit)		476		(875	)		1,500		(245	)		1,209			NM

Net income (loss)	$	740	$	(1,226	)	$	2,481	$	(762	)	$	1,501			NM

Pre-tax operating income (loss)	$	733	$	(1,017	)	$	2,163	$	971		$	3,509			NM

After-tax operating income (loss)	$	426	$	(521	)	$	1,299	$	524		$	2,020			NM

PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)

	Nine			Nine			% Change
	Months			Months			Nine
	2006			2005			Months

Gross Premiums Written	$	368,313		$	346,488			6.3	%

Net Premiums Written	$	308,119		$	311,067			-0.9	%

Revenues:
Net premiums earned	$	281,865		$	268,666			4.9	%
Net investment income		33,205			36,902			-10.0	%
Net realized investment gains (losses)		(959	)		3,201			NM
Other revenues		21,014			17,340			21.2	%
Total revenues		335,125			326,109			2.8	%

Expenses:
Losses and loss adjustment expenses		198,526			225,361			-11.9	%
Acquisition expenses		56,688			56,345			0.6	%
Operating expenses		60,520			54,372			11.3	%
Dividends to policyholders		3,022			2,831			6.7	%
Interest expense		10,685			12,114			-11.8	%
Total losses and expenses		329,441			351,023			-6.1	%

Pre-tax income (loss)		5,684			(24,914	)		NM

Income tax expense (benefit):
Current		-			-			NM
Deferred		2,464			(5,120	)		NM

Total income tax expense (benefit)		2,464			(5,120	)		NM

Net income (loss)	$	3,220		$	(19,794	)		NM

Pre-tax operating income (loss)	$	6,643		$	(28,115	)		NM

After-tax operating income (loss)	$	3,843		$	(21,875	)		NM

PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)

	3rd			4th			1st			2nd			3rd
	Quarter			Quarter			Quarter			Quarter			Quarter
	2005			2005			2006			2006			2006

Assets:
Investments in fixed maturities available for sale	$	1,184,301		$	1,049,254		$	994,972		$	913,376		$	904,074
Short-term investments		67,636			57,997			63,641			70,994			59,227
Short-term investments, loaned securities collateral		63,751			-			9,991			4,771			-
Total investments		1,315,688			1,107,251			1,068,604			989,141			963,301

Cash		43,282			30,239			13,667			26,004			30,387
Accrued investment income		13,703			11,528			11,395			9,312			10,993
Premiums receivable		212,847			197,582			209,354			205,825			218,126
Reinsurance receivables		1,115,953			1,094,674			1,086,830			1,071,332			1,069,153
Deferred income taxes		98,568			103,656			107,908			110,452			102,986
Deferred acquisition costs		39,432			34,236			39,308			37,336			40,384
Funds held by reinsureds		153,064			146,374			148,512			151,873			133,222
Other assets		167,192			162,505			179,061			171,713			184,904
Total assets	$	3,159,729		$	2,888,045		$	2,864,639		$	2,772,988		$	2,753,456

Liabilities:
Unpaid losses and loss adjustment expenses	$	1,966,907		$	1,820,043		$	1,776,822		$	1,727,369		$	1,690,483
Unearned premiums		199,153			173,432			199,129			189,140			217,506
Debt		216,808			196,181			189,181			148,303			131,561
Accounts payable, accrued expenses
and other liabilities		198,441			209,654			205,114			220,350			219,146
Funds held under reinsurance treaties		96,067			78,058			79,815			79,966			77,813
Dividends to policyholders		3,931			4,452			4,998			4,725			4,744
Payable under securities loan agreements		63,758			2			10,005			4,804			-
Total liabilities		2,745,065			2,481,822			2,465,064			2,374,657			2,341,253

Shareholders' Equity:
Class A Common stock		171,090			171,090			171,090			171,090			171,090
Additional paid-in capital		109,331			109,331			110,042			110,552			111,116
Retained earnings		188,409			187,265			185,393			180,626			181,719
Accumulated other comprehensive loss		(14,861	)		(22,684	)		(33,358	)		(37,630	)		(26,010	)
Treasury stock, at cost		(39,305	)		(38,779	)		(33,592	)		(26,307	)		(25,712	)
Total shareholders' equity		414,664			406,223			399,575			398,331			412,203
Total liabilities and shareholders' equity	$	3,159,729		$	2,888,045		$	2,864,639		$	2,772,988		$	2,753,456

PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollars in Thousands)

	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2006			2006			2006			2006			2005

Total Investments & Cash
As reported	$	1,358,970		$	1,137,490		$	1,082,271		$	1,015,145		$	993,688		$	993,688		$	1,358,970
Less:
Securities lending activity		63,758			2			10,005			4,804			-			-			63,758
Unrealized gain (loss)		1,771			(4,302	)		(21,448	)		(28,820	)		(9,490	)		(9,490	)		1,771
Total adjusted investments & cash	$	1,293,441		$	1,141,790		$	1,093,714		$	1,039,161		$	1,003,178		$	1,003,178		$	1,293,441

Net Investment Income
As reported	$	12,648		$	11,761		$	11,400		$	11,058		$	10,747		$	33,205		$	36,902
Funds held:
Assumed		535			545			335			537			185			1,057			851
Ceded		(1,694	)		(1,897	)		(1,519	)		(1,643	)		(1,482	)		(4,644	)		(6,002	)
Total funds held		(1,159	)		(1,352	)		(1,184	)		(1,106	)		(1,297	)		(3,587	)		(5,151	)

Total adjusted investment income	$	13,807		$	13,113		$	12,584		$	12,164		$	12,044		$	36,792		$	42,053

Yield
As reported		3.62	%		3.77	%		4.11	%		4.22	%		4.28	%		4.19	%		3.42	%
Investment portfolio		4.22	%		4.31	%		4.50	%		4.56	%		4.72	%		4.59	%		4.12	%

Duration (in years)		3.7			3.7			3.7			3.5			3.4			3.4			3.7

PMA Capital Corporation
Debt
(Dollars in Thousands)
	Amount
	Outstanding			Maturity
6.50% convertible debt	$	19,326			2022¹
Derivative component of 6.50% convertible debt		3,506
4.25% convertible debt		455			2022²
8.50% senior notes		54,900			2018
Junior subordinated debt³		43,816			2033
Surplus notes ⁴		10,000			2035
Unamortized debt discount		(442	)
Total long-term debt	$	131,561


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 $18.4 million principal amount and $15.891 per share for $941,000 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, 2008, 2010, 2012 and 2017. Holders required us to repurchase $200,000 of this debt on September 30, 2006. 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 9.52% as of September 30, 2006.
⁴	Interest rate on surplus notes is 9.97% as of September 30, 2006.

PMA Capital Corporation
Balance Sheet Impact of Commutations - Run-off Operations
(Dollars in Thousands)

	3rd Quarter and Nine Months 2006
Assets	Assumed			Ceded		Total
Funds held by reinsureds	$	(20,248	)	$	-	$	(20,248	)

Liabilities		Assumed			Ceded		Total
Unpaid losses and loss adjustment expenses	$	(23,013	)	$	-	$	(23,013	)

PMA Capital Corporation
Statements of Operations - Consolidating
Nine Months Ended September 30, 2006
(In Thousands)

	PMA
	Insurance		Corporate			Run-off
	Group		& Other¹			Operations			Consolidated

Gross Premiums Written	$	366,968	$	(539	)	$	1,884		$	368,313

Net Premiums Written	$	306,824	$	(539	)	$	1,834		$	308,119

Revenues:
Net premiums earned	$	280,720	$	(539	)	$	1,684		$	281,865
Net investment income		26,310		(409	)		7,304			33,205
Other revenues		20,812		202			-			21,014
Operating revenues		327,842		(746	)		8,988			336,084

Losses and Expenses:
Losses and loss adjustment expenses		200,456		-			(1,930	)		198,526
Acquisition expenses		56,240		-			448			56,688
Operating expenses		44,238		6,575			9,707			60,520
Dividends to policyholders		3,022		-			-			3,022
Total losses and expenses		303,956		6,575			8,225			318,756

Operating income (loss) before income taxes
and interest expense		23,886		(7,321	)		763			17,328

Interest expense		723		9,962			-			10,685

Pre-tax operating income (loss)	$	23,163	$	(17,283	)	$	763			6,643

Net realized investment losses										(959	)

Pre-tax income									$	5,684

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

PMA Capital Corporation
Statements of Operations - Consolidating
Nine Months Ended September 30, 2005
(In Thousands)

	PMA
	Insurance		Corporate			Run-off
	Group		& Other¹			Operations			Consolidated

Gross Premiums Written	$	339,115	$	(609	)	$	7,982		$	346,488

Net Premiums Written	$	304,454	$	(609	)	$	7,222		$	311,067

Revenues:
Net premiums earned	$	262,455	$	(609	)	$	6,820		$	268,666
Net investment income		23,417		799			12,686			36,902
Other revenues		17,043		297			-			17,340
Operating revenues		302,915		487			19,506			322,908

Losses and Expenses:
Losses and loss adjustment expenses		191,544		-			33,817			225,361
Acquisition expenses		52,300		-			4,045			56,345
Operating expenses		38,082		5,875			10,415			54,372
Dividends to policyholders		2,831		-			-			2,831
Total losses and expenses		284,757		5,875			48,277			338,909

Operating income (loss) before income taxes
and interest expense		18,158		(5,388	)		(28,771	)		(16,001	)

Interest expense		5		12,109			-			12,114

Pre-tax operating income (loss)	$	18,153	$	(17,497	)	$	(28,771	)		(28,115	)

Net realized investment gains										3,201

Pre-tax loss									$	(24,914	)

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

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended September 30, 2006
(In Thousands)

	PMA
	Insurance		Corporate			Run-off
	Group		& Other¹			Operations			Consolidated

Gross Premiums Written	$	133,903	$	(158	)	$	526		$	134,271

Net Premiums Written	$	107,795	$	(158	)	$	701		$	108,338

Revenues:
Net premiums earned	$	94,696	$	(158	)	$	746		$	95,284
Net investment income		8,998		54			1,695			10,747
Other revenues		6,573		51			-			6,624
Operating revenues		110,267		(53	)		2,441			112,655

Losses and Expenses:
Losses and loss adjustment expenses		68,255		-			(1,501	)		66,754
Acquisition expenses		19,098		-			713			19,811
Operating expenses		13,720		2,178			3,055			18,953
Dividends to policyholders		589		-			-			589
Total losses and expenses		101,662		2,178			2,267			106,107

Operating income (loss) before income taxes
and interest expense		8,605		(2,231	)		174			6,548

Interest expense		254		2,785			-			3,039

Pre-tax operating income (loss)	$	8,351	$	(5,016	)	$	174			3,509

Net realized investment losses										(799	)

Pre-tax income									$	2,710

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

PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended September 30, 2005
(In Thousands)

	PMA
	Insurance		Corporate			Run-off
	Group		& Other¹			Operations			Consolidated

Gross Premiums Written	$	129,163	$	(195	)	$	1,138		$	130,106

Net Premiums Written	$	116,877	$	(195	)	$	789		$	117,471

Revenues:
Net premiums earned	$	92,214	$	(195	)	$	204		$	92,223
Net investment income		8,160		271			4,217			12,648
Other revenues		6,172		37			-			6,209
Operating revenues		106,546		113			4,421			111,080

Losses and Expenses:
Losses and loss adjustment expenses		67,995		-			117			68,112
Acquisition expenses		18,279		-			1,412			19,691
Operating expenses		13,100		1,622			3,150			17,872
Dividends to policyholders		567		-			-			567
Total losses and expenses		99,941		1,622			4,679			106,242

Operating income (loss) before income taxes
and interest expense		6,605		(1,509	)		(258	)		4,838

Interest expense		5		4,100			-			4,105

Pre-tax operating income (loss)	$	6,600	$	(5,609	)	$	(258	)		733

Net realized investment gains										483

Pre-tax income									$	1,216

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

PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)

	3rd		4th		1st		2nd		3rd		Nine		Nine		% Change			% Change
	Quarter		Quarter		Quarter		Quarter		Quarter		Months		Months		3rd			Nine
	2005		2005		2006		2006		2006		2006		2005		Quarter			Months

Gross Premiums Written	$	129,163	$	82,490	$	133,737	$	99,328	$	133,903	$	366,968	$	339,115		3.7	%		8.2	%

Net Premiums Written	$	116,877	$	71,339	$	113,390	$	85,639	$	107,795	$	306,824	$	304,454		-7.8	%		0.8	%

Revenues:
Net premiums earned	$	92,214	$	96,187	$	91,221	$	94,803	$	94,696	$	280,720	$	262,455		2.7	%		7.0	%
Net investment income		8,160		8,328		8,559		8,753		8,998		26,310		23,417		10.3	%		12.4	%
Other revenues		6,172		6,837		7,074		7,165		6,573		20,812		17,043		6.5	%		22.1	%
Total revenues		106,546		111,352		106,854		110,721		110,267		327,842		302,915		3.5	%		8.2	%

Losses and Expenses:
Losses and loss adjustment expenses		67,995		68,732		64,519		67,682		68,255		200,456		191,544		0.4	%		4.7	%
Acquisition expenses		18,279		18,998		18,219		18,923		19,098		56,240		52,300		4.5	%		7.5	%
Operating expenses		13,100		17,191		14,325		16,193		13,720		44,238		38,082		4.7	%		16.2	%
Dividends to policyholders		567		2,343		1,422		1,011		589		3,022		2,831		3.9	%		6.7	%
Total losses and expenses		99,941		107,264		98,485		103,809		101,662		303,956		284,757		1.7	%		6.7	%

Operating income before income taxes
and interest expense		6,605		4,088		8,369		6,912		8,605		23,886		18,158		30.3	%		31.5	%

Interest expense		5		221		228		241		254		723		5		NM			NM

Pre-tax operating income	$	6,600	$	3,867	$	8,141	$	6,671	$	8,351	$	23,163	$	18,153		26.5	%		27.6	%

PMA Capital Corporation
Insurance Ratios - PMA Insurance Group

	3rd			4th			1st			2nd			3rd			Nine			Nine			Point Chg.			Point Chg.
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months			3rd Quarter			Nine Months
	2005			2005			2006			2006			2006			2006			2005			Better Worse)			Better (Worse)

Ratios - GAAP Basis:


Loss and LAE ratio		73.7	%		71.5	%		70.7	%		71.4	%		72.1	%		71.4	%		73.0	%		1.6			1.6

Expense ratio:
Acquisition expenses		19.8	%		19.8	%		20.0	%		20.0	%		20.2	%		20.0	%		19.9	%		(0.4	)		(0.1	)
Operating expenses¹		9.2	%		12.5	%		9.8	%		10.4	%		8.5	%		9.6	%		9.6	%		0.7			-
Total expense ratio		29.0	%		32.3	%		29.8	%		30.4	%		28.7	%		29.6	%		29.5	%		0.3			(0.1	)

Policyholders' dividend ratio		0.6	%		2.4	%		1.6	%		1.1	%		0.6	%		1.1	%		1.1	%		-			-
Combined ratio		103.3	%		106.2	%		102.1	%		102.9	%		101.4	%		102.1	%		103.6	%		1.9			1.5

Net investment income ratio		-8.8	%		-8.7	%		-9.4	%		-9.2	%		-9.5	%		-9.4	%		-8.9	%		0.7			0.5
Operating ratio		94.5	%		97.5	%		92.7	%		93.7	%		91.9	%		92.7	%		94.7	%		2.6			2.0


¹ The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $8.4 million, $12.1 million, $8.9 million, $10.0 million and $8.1 million for the third and fourth quarters of 2005 and the first, second and third quarters of 2006, respectively.

PMA Capital Corporation
Statements of Operations - Run-off Operations
(Dollar Amounts in Thousands)

	3rd			4th		1st			2nd			3rd			Nine			Nine			% Change			% Change
	Quarter			Quarter		Quarter			Quarter			Quarter			Months			Months			3rd			Nine
	2005			2005		2006			2006			2006			2006			2005			Quarter			Months

Gross Premiums Written	$	1,138		$	4,959	$	398		$	960		$	526		$	1,884		$	7,982			-53.8	%		-76.4	%

Net Premiums Written	$	789		$	3,028	$	606		$	527		$	701		$	1,834		$	7,222			-11.2	%		-74.6	%

Revenues:
Net premiums earned	$	204		$	3,386	$	606		$	332		$	746		$	1,684		$	6,820			NM			-75.3	%
Net investment income		4,217			3,652		3,201			2,408			1,695			7,304			12,686			-59.8	%		-42.4	%
Total revenues		4,421			7,038		3,807			2,740			2,441			8,988			19,506			-44.8	%		-53.9	%

Losses and Expenses:
Losses and loss adjustment expenses		117			981		874			(1,303	)		(1,501	)		(1,930	)		33,817			NM			NM
Acquisition expenses		1,412			538		(894	)		629			713			448			4,045			-49.5	%		-88.9	%
Operating expenses		3,150			3,681		3,666			2,986			3,055			9,707			10,415			-3.0	%		-6.8	%
Total losses and expenses		4,679			5,200		3,646			2,312			2,267			8,225			48,277			-51.5	%		-83.0	%

Pre-tax operating income (loss)	$	(258	)	$	1,838	$	161		$	428		$	174		$	763		$	(28,771	)		NM			NM

PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)

	3rd			4th			1st			2nd			3rd			Nine			Nine			% Change			% Change
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months			3rd			Nine
	2005			2005			2006			2006			2006			2006			2005			Quarter			Months

Gross Premiums Written	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(158	)	$	(539	)	$	(609	)		19.0	%		11.5	%

Net Premiums Written	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(158	)	$	(539	)	$	(609	)		19.0	%		11.5	%

Revenues:
Net premiums earned	$	(195	)	$	(209	)	$	(168	)	$	(213	)	$	(158	)	$	(539	)	$	(609	)		19.0	%		11.5	%
Net investment income		271			(219	)		(360	)		(103	)		54			(409	)		799			-80.1	%		NM
Other revenues		37			109			30			121			51			202			297			37.8	%		-32.0	%
Total revenues		113			(319	)		(498	)		(195	)		(53	)		(746	)		487			NM			NM

Losses and Expenses:
Operating expenses		1,622			2,627			1,996			2,401			2,178			6,575			5,875			34.3	%		11.9	%
Total losses and expenses		1,622			2,627			1,996			2,401			2,178			6,575			5,875			34.3	%		11.9	%

Operating loss before income taxes
and interest expense		(1,509	)		(2,946	)		(2,494	)		(2,596	)		(2,231	)		(7,321	)		(5,388	)		-47.8	%		-35.9	%

Interest expense		4,100			3,776			3,645			3,532			2,785			9,962			12,109			-32.1	%		-17.7	%

Pre-tax operating loss	$	(5,609	)	$	(6,722	)	$	(6,139	)	$	(6,128	)	$	(5,016	)	$	(17,283	)	$	(17,497	)		10.6	%		1.2	%

PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)

	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2006			2006			2006			2006			2005

Receipts:
Premiums and other revenues collected	$	90,858		$	98,661		$	104,991		$	96,652		$	108,027		$	309,670		$	296,239
Investment income received		15,942			16,393			15,368			14,890			11,795			42,053			45,412
Total receipts		106,800			115,054			120,359			111,542			119,822			351,723			341,651

Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		16,593			20,720			3,496			17,337			17,034			37,867			34,645
Losses and LAE paid - prior years		86,329			174,212			92,597			92,004			65,455			250,056			332,823
Total losses and LAE paid		102,922			194,932			96,093			109,341			82,489			287,923			367,468
Insurance operating expenses paid		39,009			27,271			46,203			39,618			26,899			112,720			117,226
Policyholders' dividends paid		820			531			246			397			451			1,094			4,219
Interest on corporate debt		5,327			2,197			4,791			2,965			3,470			11,226			11,701
Total disbursements		148,078			224,931			147,333			152,321			113,309			412,963			500,614

Net other		3,564			(15,349	)		(12,368	)		7,406			(9,204	)		(14,166	)		11,868

Net operating cash flows	$	(37,714	)	$	(125,226	)	$	(39,342	)	$	(33,373	)	$	(2,691	)	$	(75,406	)	$	(147,095	)

PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)

	3rd		4th			1st			2nd			3rd			Nine			Nine
	Quarter		Quarter			Quarter			Quarter			Quarter			Months			Months
	2005		2005			2006			2006			2006			2006			2005

Receipts:
Premiums and other revenues collected	$	91,212	$	97,910		$	99,740		$	94,320		$	107,102		$	301,162		$	284,530
Investment income received		10,262		10,606			10,479			10,598			8,831			29,908			29,348
Total receipts		101,474		108,516			110,219			104,918			115,933			331,070			313,878

Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		16,584		20,720			3,496			17,337			17,034			37,867			34,627
Losses and LAE paid - prior years		55,520		43,853			65,113			57,537			45,463			168,113			197,795
Total losses and LAE paid		72,104		64,573			68,609			74,874			62,497			205,980			232,422
Insurance operating expenses paid		33,988		23,305			42,110			35,129			24,446			101,685			105,214
Policyholders' dividends paid		820		531			246			397			451			1,094			4,219
Interest on corporate debt		-		80			224			227			246			697			-
Total disbursements		106,912		88,489			111,189			110,627			87,640			309,456			341,855

Net other		6,012		(18,742	)		(6,376	)		1,955			(1,939	)		(6,360	)		21,774

Net operating cash flows	$	574	$	1,285		$	(7,346	)	$	(3,754	)	$	26,354		$	15,254		$	(6,203	)

PMA Capital Corporation
Operating Cash Flows - Run-off Operations
(In Thousands)

	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2006			2006			2006			2006			2005

Receipts:
Premiums collected	$	(354	)	$	751		$	5,251		$	2,332		$	925		$	8,508		$	11,709
Investment income received		5,680			5,787			4,889			4,292			2,964			12,145			16,064
Total receipts		5,326			6,538			10,140			6,624			3,889			20,653			27,773

Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year		9			-			-			-			-			-			18
Losses and LAE paid - prior years		30,809			130,359			27,484			34,467			19,992			81,943			135,028
Total losses and LAE paid		30,818			130,359			27,484			34,467			19,992			81,943			135,046
Insurance operating expenses paid		5,021			3,966			4,093			4,489			2,453			11,035			12,012
Total disbursements		35,839			134,325			31,577			38,956			22,445			92,978			147,058

Net other		(1,912	)		4,004			1,083			1,775			(5,500	)		(2,642	)		(6,876	)

Net operating cash flows	$	(32,425	)	$	(123,783	)	$	(20,354	)	$	(30,557	)	$	(24,056	)	$	(74,967	)	$	(126,161	)

PMA Capital Corporation

Statutory Surplus

(In Thousands)

3rd

4th

1st

2nd

3rd

Quarter

2005

2006

2006¹

PMA Pool ²

311,802

315,056

316,726

321,114

325,242

⁴

PMA Capital Insurance Company ³

210,663

204,920

203,261

125,989

⁵

123,428

^4,5

PMA Capital Corporation
Statutory Financial Information - PMA Pool ²
(In Thousands)

	3rd			4th			1st			2nd			3rd			Nine			Nine
	Quarter			Quarter			Quarter			Quarter			Quarter			Months			Months
	2005			2005			2006			2006			2006¹			2006¹			2005

Net Premiums Written:
Workers' Compensation & Integrated
Disability	$	101,435		$	63,086		$	100,096		$	76,602		$	95,437		$	272,135		$	267,116
Other Commercial Lines		13,487			4,723			11,048			6,687			6,067			23,802			35,272
Total - PMA Pool	$	114,922		$	67,809		$	111,144		$	83,289		$	101,504		$	295,937		$	302,388

Statutory Ratios:
Loss and LAE ratio		73.3	%		73.0	%		71.5	%		72.5	%		72.1	%		72.0	%		73.2	%
Underwriting expense ratio		25.1	%		32.5	%		24.6	%		31.6	%		26.3	%		27.2	%		26.5	%
Policyholders' dividend ratio		0.8	%		1.1	%		0.9	%		0.1	%		0.5	%		0.5	%		0.9	%
Combined ratio		99.2	%		106.6	%		97.0	%		104.2	%		98.9	%		99.7	%		100.6	%
Operating ratio		91.2	%		98.6	%		88.4	%		96.0	%		90.5	%		91.3	%		92.3	%

Estimated.

The PMA Pool is comprised of Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company.

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 $146.0 million and $3.4 million for the PMA Pool and PMA Capital Insurance Company, respectively.

⁵

In May 2006, PMA Capital Insurance Company paid an extraordinary dividend in the amount of $73.5 million to its parent, PMA Capital Corporation.

PMA Capital Corporation
Industry Ratings and Market Information

Transfer Agent and Registrar:				Inquiries:
American Stock Transfer & Trust Company				William E. Hitselberger
Shareholder Relations				Chief Financial Officer
59 Maiden Lane – Plaza Level				215.665.5070
New York, NY 10038				e-mail: bhitselberger@pmacapital.com
www.amstock.com
				Investor Relations
Phone Inquiries:				610.397.5298
800.937.5449				investorrelations@pmacapital.com

Email Inquiries:				Company Website:
info@amstock.com				www.pmacapital.com


Securities Listing:
The Corporation's Class A Common Stock is listed
on the NASDAQ Stock Market ^®. It trades under
the stock symbol: PMACA.

Financial Strength Ratings (as of 11/01/2006):

	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.

Pma Capital (PMACA) Inactive 8-KPMA Capital Announces Third Quarter 2006 Results