Exhibit 99.2
Statistical Supplement
First Quarter
2007
PMA Capital Corporation | |||
Statistical Supplement | |||
First Quarter - 2007 | |||
Table of Contents | |||
Page | |||
Consolidated Highlights: | |||
1 | |||
2 | |||
3 | |||
4 | |||
5 | |||
Segment Information: | |||
6 | - | 7 | |
8 | |||
9 | |||
10 | |||
11 | |||
Operating Cash Flow Information: | |||
12 | |||
13 | |||
14 | |||
Statutory Financial Information: | |||
15 | |||
Other Information: | |||
16 | |||
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 page 1 for | |||||||||
a reconciliation of operating results by segment to GAAP net income (loss). |
Selected Financial Data | |||||||||||||||||||
(Dollar Amounts in Thousands, Except Per Share Data) | |||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 1st | ||||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | Quarter | ||||||||||||||
Gross Premiums Written by Segment: | |||||||||||||||||||
PMA Insurance Group | $ | 133,737 | $ | 99,328 | $ | 133,903 | $ | 89,484 | $ | 164,720 | 23.2 | % | |||||||
Run-off Operations | 398 | 960 | 526 | 102 | 1,507 | NM | |||||||||||||
Corporate & Other | (168 | ) | (213 | ) | (158 | ) | (157 | ) | (156 | ) | 7.1 | % | |||||||
Gross premiums written | $ | 133,967 | $ | 100,075 | $ | 134,271 | $ | 89,429 | $ | 166,071 | 24.0 | % | |||||||
Net Premiums Written by Segment: | |||||||||||||||||||
PMA Insurance Group | $ | 113,390 | $ | 85,639 | $ | 107,795 | $ | 66,873 | $ | 125,893 | 11.0 | % | |||||||
Run-off Operations | 606 | 527 | 701 | 309 | 1,495 | NM | |||||||||||||
Corporate & Other | (168 | ) | (213 | ) | (158 | ) | (157 | ) | (156 | ) | 7.1 | % | |||||||
Net premiums written | $ | 113,828 | $ | 85,953 | $ | 108,338 | $ | 67,025 | $ | 127,232 | 11.8 | % | |||||||
Major Components of Net Income (Loss): | |||||||||||||||||||
Pre-tax operating income (loss) by segment: | |||||||||||||||||||
PMA Insurance Group | $ | 8,141 | $ | 6,671 | $ | 8,351 | $ | 5,721 | $ | 11,723 | 44.0 | % | |||||||
Run-off Operations | 161 | 428 | 174 | 485 | (738 | ) | NM | ||||||||||||
Corporate & Other | (6,139 | ) | (6,128 | ) | (5,016 | ) | (5,282 | ) | (5,309 | ) | 13.5 | % | |||||||
Pre-tax operating income | 2,163 | 971 | 3,509 | 924 | 5,676 | NM | |||||||||||||
Net realized investment gains (losses) | 1,818 | (1,978 | ) | (799 | ) | (26 | ) | (430 | ) | NM | |||||||||
Pre-tax income (loss) | 3,981 | (1,007 | ) | 2,710 | 898 | 5,246 | 31.8 | % | |||||||||||
Income tax expense (benefit) | 1,500 | (245 | ) | 1,209 | 67 | 1,900 | 26.7 | % | |||||||||||
Net income (loss) | $ | 2,481 | $ | (762 | ) | $ | 1,501 | $ | 831 | $ | 3,346 | 34.9 | % | ||||||
After-tax operating income | $ | 1,299 | $ | 524 | $ | 2,020 | $ | 848 | $ | 3,626 | NM | ||||||||
Diluted Earnings (Loss) Per Share: | |||||||||||||||||||
Net income (loss) | $ | 0.08 | $ | (0.02 | ) | $ | 0.05 | $ | 0.03 | $ | 0.10 | 25.0 | % | ||||||
Less the impact of: | |||||||||||||||||||
Realized gains (losses) after tax | 0.04 | (0.04 | ) | (0.01 | ) | - | (0.01 | ) | NM | ||||||||||
After-tax operating income | $ | 0.04 | $ | 0.02 | $ | 0.06 | $ | 0.03 | $ | 0.11 | NM | ||||||||
Capitalization: | |||||||||||||||||||
Debt | $ | 189,181 | $ | 148,303 | $ | 131,561 | $ | 131,211 | $ | 130,822 | -30.8 | % | |||||||
Shareholders' equity excluding FAS 115 unrealized loss | 413,516 | 417,064 | 418,372 | 425,132 | 424,894 | 2.8 | % | ||||||||||||
Total capitalization excluding FAS 115 unrealized loss | 602,697 | 565,367 | 549,933 | 556,343 | 555,716 | -7.8 | % | ||||||||||||
FAS 115 unrealized loss | (13,941 | ) | (18,733 | ) | (6,169 | ) | (6,039 | ) | (1,084 | ) | 92.2 | % | |||||||
Total capitalization including FAS 115 unrealized loss | $ | 588,756 | $ | 546,634 | $ | 543,764 | $ | 550,304 | $ | 554,632 | -5.8 | % | |||||||
Book Value Per Share: | |||||||||||||||||||
Excluding FAS 115 unrealized loss | $ | 12.83 | $ | 12.79 | $ | 12.82 | $ | 13.02 | $ | 13.02 | 1.5 | % | |||||||
Including FAS 115 unrealized loss | $ | 12.39 | $ | 12.21 | $ | 12.63 | $ | 12.83 | $ | 12.99 | 4.8 | % | |||||||
Debt to Total Capital: | |||||||||||||||||||
Excluding FAS 115 unrealized loss | 31.4 | % | 26.2 | % | 23.9 | % | 23.6 | % | 23.5 | % | -25.2 | % | |||||||
Including FAS 115 unrealized loss | 32.1 | % | 27.1 | % | 24.2 | % | 23.8 | % | 23.6 | % | -26.5 | % | |||||||
Interest Coverage: | |||||||||||||||||||
Income before interest and income taxes | |||||||||||||||||||
to interest expense | 2.03 | 0.73 | 1.89 | 1.32 | 2.86 | 40.9 | % | ||||||||||||
Operating income before interest and income taxes | |||||||||||||||||||
to interest expense | 1.56 | 1.26 | 2.15 | 1.33 | 3.02 | 93.6 | % | ||||||||||||
1
Consolidated Statements of Operations - Per Share Data | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Diluted Earnings (Loss) Per Share: | ||||||||||||||||
Net income (loss) | $ | 0.08 | $ | (0.02 | ) | $ | 0.05 | $ | 0.03 | $ | 0.10 | |||||
Pre-tax operating income | $ | 0.07 | $ | 0.03 | $ | 0.11 | $ | 0.03 | $ | 0.17 | ||||||
After-tax operating income | $ | 0.04 | $ | 0.02 | $ | 0.06 | $ | 0.03 | $ | 0.11 | ||||||
Diluted weighted average common | ||||||||||||||||
shares outstanding | 32,405,934 | 32,132,618 | 32,922,643 | 32,916,423 | 32,900,397 | |||||||||||
Dividends declared: | ||||||||||||||||
Class A Common Stock | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
Actual common shares issued | ||||||||||||||||
and outstanding | 32,239,288 | 32,613,234 | 32,646,689 | 32,659,194 | 32,630,669 | |||||||||||
Class A Common Stock prices: | ||||||||||||||||
High | $ | 10.43 | $ | 10.49 | $ | 10.75 | $ | 10.15 | $ | 9.77 | ||||||
Low | $ | 8.68 | $ | 9.24 | $ | 8.60 | $ | 8.60 | $ | 8.40 | ||||||
Close | $ | 10.18 | $ | 10.30 | $ | 8.82 | $ | 9.22 | $ | 9.39 |
2
Consolidated Statements of Operations | |||||||||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 1st | ||||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | Quarter | ||||||||||||||
Gross Premiums Written | $ | 133,967 | $ | 100,075 | $ | 134,271 | $ | 89,429 | $ | 166,071 | 24.0 | % | |||||||
Net Premiums Written | $ | 113,828 | $ | 85,953 | $ | 108,338 | $ | 67,025 | $ | 127,232 | 11.8 | % | |||||||
Revenues: | |||||||||||||||||||
Net premiums earned | $ | 91,659 | $ | 94,922 | $ | 95,284 | $ | 88,316 | $ | 95,032 | 3.7 | % | |||||||
Net investment income | 11,400 | 11,058 | 10,747 | 10,333 | 10,525 | -7.7 | % | ||||||||||||
Net realized investment gains (losses) | 1,818 | (1,978 | ) | (799 | ) | (26 | ) | (430 | ) | NM | |||||||||
Other revenues | 7,104 | 7,286 | 6,624 | 7,107 | 7,787 | 9.6 | % | ||||||||||||
Total revenues | 111,981 | 111,288 | 111,856 | 105,730 | 112,914 | 0.8 | % | ||||||||||||
Expenses: | |||||||||||||||||||
Losses and loss adjustment expenses | 65,393 | 66,379 | 66,754 | 60,695 | 67,026 | 2.5 | % | ||||||||||||
Acquisition expenses | 17,325 | 19,552 | 19,811 | 17,825 | 19,138 | 10.5 | % | ||||||||||||
Operating expenses | 19,987 | 21,580 | 18,953 | 22,966 | 17,066 | -14.6 | % | ||||||||||||
Dividends to policyholders | 1,422 | 1,011 | 589 | 510 | 1,622 | 14.1 | % | ||||||||||||
Interest expense | 3,873 | 3,773 | 3,039 | 2,836 | 2,816 | -27.3 | % | ||||||||||||
Total losses and expenses | 108,000 | 112,295 | 109,146 | 104,832 | 107,668 | -0.3 | % | ||||||||||||
Pre-tax income (loss) | 3,981 | (1,007 | ) | 2,710 | 898 | 5,246 | 31.8 | % | |||||||||||
Income tax expense (benefit): | |||||||||||||||||||
Current | - | - | - | - | - | NM | |||||||||||||
Deferred | 1,500 | (245 | ) | 1,209 | 67 | 1,900 | 26.7 | % | |||||||||||
Total income tax expense (benefit) | 1,500 | (245 | ) | 1,209 | 67 | 1,900 | 26.7 | % | |||||||||||
Net income (loss) | $ | 2,481 | $ | (762 | ) | $ | 1,501 | $ | 831 | $ | 3,346 | 34.9 | % | ||||||
Pre-tax operating income | $ | 2,163 | $ | 971 | $ | 3,509 | $ | 924 | $ | 5,676 | NM | ||||||||
After-tax operating income | $ | 1,299 | $ | 524 | $ | 2,020 | $ | 848 | $ | 3,626 | NM |
3
Consolidated Balance Sheets | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Assets: | ||||||||||||||||
Investments in fixed maturities available for sale | $ | 994,972 | $ | 913,376 | $ | 904,074 | $ | 871,951 | $ | 735,048 | ||||||
Investments in fixed maturities trading | - | - | - | - | 122,669 | |||||||||||
Short-term investments | 63,641 | 70,994 | 59,227 | 86,448 | 93,385 | |||||||||||
Short-term investments, loaned securities collateral | 9,991 | 4,771 | - | - | - | |||||||||||
Total investments | 1,068,604 | 989,141 | 963,301 | 958,399 | 951,102 | |||||||||||
Cash | 13,667 | 26,004 | 30,387 | 14,105 | 9,924 | |||||||||||
Accrued investment income | 11,395 | 9,312 | 10,993 | 9,351 | 5,407 | |||||||||||
Premiums receivable | 209,354 | 205,825 | 218,126 | 207,771 | 257,445 | |||||||||||
Reinsurance receivables | 1,086,830 | 1,071,332 | 1,069,153 | 1,039,979 | 1,042,478 | |||||||||||
Deferred income taxes, net | 107,908 | 110,452 | 102,986 | 100,019 | 97,565 | |||||||||||
Deferred acquisition costs | 39,308 | 37,336 | 40,384 | 36,239 | 41,726 | |||||||||||
Funds held by reinsureds | 148,512 | 151,873 | 133,222 | 130,214 | 132,926 | |||||||||||
Other assets | 179,061 | 171,713 | 184,904 | 170,330 | 189,432 | |||||||||||
Total assets | $ | 2,864,639 | $ | 2,772,988 | $ | 2,753,456 | $ | 2,666,407 | $ | 2,728,005 | ||||||
Liabilities: | ||||||||||||||||
Unpaid losses and loss adjustment expenses | $ | 1,776,822 | $ | 1,727,369 | $ | 1,690,483 | $ | 1,634,865 | $ | 1,620,952 | ||||||
Unearned premiums | 199,129 | 189,140 | 217,506 | 202,973 | 249,689 | |||||||||||
Debt | 189,181 | 148,303 | 131,561 | 131,211 | 130,822 | |||||||||||
Accounts payable, accrued expenses | ||||||||||||||||
and other liabilities | 205,114 | 220,350 | 219,146 | 210,740 | 234,901 | |||||||||||
Funds held under reinsurance treaties | 79,815 | 79,966 | 77,813 | 63,075 | 63,348 | |||||||||||
Dividends to policyholders | 4,998 | 4,725 | 4,744 | 4,450 | 4,483 | |||||||||||
Payable under securities loan agreements | 10,005 | 4,804 | - | - | - | |||||||||||
Total liabilities | 2,465,064 | 2,374,657 | 2,341,253 | 2,247,314 | 2,304,195 | |||||||||||
Shareholders' Equity: | ||||||||||||||||
Class A Common Stock | 171,090 | 171,090 | 171,090 | 171,090 | 171,090 | |||||||||||
Additional paid-in capital | 110,042 | 110,552 | 111,116 | 109,922 | 110,527 | |||||||||||
Retained earnings | 185,393 | 180,626 | 181,719 | 184,216 | 183,611 | |||||||||||
Accumulated other comprehensive loss | (33,358 | ) | (37,630 | ) | (26,010 | ) | (20,624 | ) | (15,675 | ) | ||||||
Treasury stock, at cost | (33,592 | ) | (26,307 | ) | (25,712 | ) | (25,511 | ) | (25,743 | ) | ||||||
Total shareholders' equity | 399,575 | 398,331 | 412,203 | 419,093 | 423,810 | |||||||||||
Total liabilities and shareholders' equity | $ | 2,864,639 | $ | 2,772,988 | $ | 2,753,456 | $ | 2,666,407 | $ | 2,728,005 |
4
Invested Assets and Net Investment Income | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Total Investments & Cash | ||||||||||||||||
As reported | $ | 1,082,271 | $ | 1,015,145 | $ | 993,688 | $ | 972,504 | $ | 961,026 | ||||||
Less: | ||||||||||||||||
Securities lending activity | 10,005 | 4,804 | - | - | - | |||||||||||
Unrealized loss | (21,448 | ) | (28,820 | ) | (9,490 | ) | (9,291 | ) | (1,668 | ) | ||||||
Unrealized loss and accrued income - trading | - | - | - | - | (5,858 | ) | ||||||||||
Total adjusted investments & cash | $ | 1,093,714 | $ | 1,039,161 | $ | 1,003,178 | $ | 981,795 | $ | 968,552 | ||||||
Net Investment Income | ||||||||||||||||
As reported | $ | 11,400 | $ | 11,058 | $ | 10,747 | $ | 10,333 | $ | 10,525 | ||||||
Funds held: | ||||||||||||||||
Assumed | 335 | 537 | 185 | 160 | 246 | |||||||||||
Ceded | (1,519 | ) | (1,643 | ) | (1,482 | ) | (1,374 | ) | (1,560 | ) | ||||||
Total funds held | (1,184 | ) | (1,106 | ) | (1,297 | ) | (1,214 | ) | (1,314 | ) | ||||||
Total adjusted investment income | $ | 12,584 | $ | 12,164 | $ | 12,044 | $ | 11,547 | $ | 11,839 | ||||||
Yield | ||||||||||||||||
As reported | 4.11 | % | 4.22 | % | 4.28 | % | 4.20 | % | 4.35 | % | ||||||
Investment portfolio | 4.50 | % | 4.56 | % | 4.72 | % | 4.65 | % | 4.86 | % | ||||||
Duration (in years) | 3.7 | 3.5 | 3.4 | 3.3 | 3.3 | |||||||||||
PMA Capital Corporation | ||||||||||||||||
Debt | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
Amount | ||||||||||||||||
Outstanding | Maturity | |||||||||||||||
6.50% convertible debt | $ | 19,326 | 20221 | |||||||||||||
Derivative component of 6.50% convertible debt | 2,686 | |||||||||||||||
4.25% convertible debt | 455 | 20222 | ||||||||||||||
8.50% senior notes | 54,900 | 2018 | ||||||||||||||
Junior subordinated debt 3 | 43,816 | 2033 | ||||||||||||||
Surplus notes 4 | 10,000 | 2035 | ||||||||||||||
Unamortized debt discount | (361 | ) | ||||||||||||||
Total long-term debt | $ | 130,822 | ||||||||||||||
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. | ||||||||||
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. 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 9.48% as of March 31, 2007. | ||||||||||
4 | Interest rate on surplus notes is 9.86% as of March 31, 2007. |
5
Statements of Operations - Consolidating | |||||||||||||
Three Months Ended March 31, 2007 | |||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 164,720 | $ | (156 | ) | $ | 1,507 | $ | 166,071 | ||||
Net Premiums Written | $ | 125,893 | $ | (156 | ) | $ | 1,495 | $ | 127,232 | ||||
Revenues: | |||||||||||||
Net premiums earned | $ | 93,995 | $ | (156 | ) | $ | 1,193 | $ | 95,032 | ||||
Net investment income | 9,704 | (179 | ) | 1,000 | 10,525 | ||||||||
Other revenues | 7,680 | 107 | - | 7,787 | |||||||||
Operating revenues | 111,379 | (228 | ) | 2,193 | 113,344 | ||||||||
Losses and Expenses: | |||||||||||||
Losses and loss adjustment expenses | 65,919 | - | 1,107 | 67,026 | |||||||||
Acquisition expenses | 18,779 | - | 359 | 19,138 | |||||||||
Operating expenses | 13,087 | 2,514 | 1,465 | 17,066 | |||||||||
Dividends to policyholders | 1,622 | - | - | 1,622 | |||||||||
Total losses and expenses | 99,407 | 2,514 | 2,931 | 104,852 | |||||||||
Operating income (loss) before income taxes | |||||||||||||
and interest expense | 11,972 | (2,742 | ) | (738 | ) | 8,492 | |||||||
Interest expense | 249 | 2,567 | - | 2,816 | |||||||||
Pre-tax operating income (loss) | $ | 11,723 | $ | (5,309 | ) | $ | (738 | ) | 5,676 | ||||
Net realized investment losses | (430 | ) | |||||||||||
Pre-tax income | $ | 5,246 |
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. |
6
PMA Capital Corporation | |||||||||||||
Statements of Operations - Consolidating | |||||||||||||
Three Months Ended March 31, 2006 | |||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||
PMA | |||||||||||||
Insurance | Corporate | Run-off | |||||||||||
Group | & Other1 | Operations | Consolidated | ||||||||||
Gross Premiums Written | $ | 133,737 | $ | (168 | ) | $ | 398 | $ | 133,967 | ||||
Net Premiums Written | $ | 113,390 | $ | (168 | ) | $ | 606 | $ | 113,828 | ||||
Revenues: | |||||||||||||
Net premiums earned | $ | 91,221 | $ | (168 | ) | $ | 606 | $ | 91,659 | ||||
Net investment income | 8,559 | (360 | ) | 3,201 | 11,400 | ||||||||
Other revenues | 7,074 | 30 | - | 7,104 | |||||||||
Operating revenues | 106,854 | (498 | ) | 3,807 | 110,163 | ||||||||
Losses and Expenses: | |||||||||||||
Losses and loss adjustment expenses | 64,519 | - | 874 | 65,393 | |||||||||
Acquisition expenses | 18,219 | - | (894 | ) | 17,325 | ||||||||
Operating expenses | 14,325 | 1,996 | 3,666 | 19,987 | |||||||||
Dividends to policyholders | 1,422 | - | - | 1,422 | |||||||||
Total losses and expenses | 98,485 | 1,996 | 3,646 | 104,127 | |||||||||
Operating income (loss) before income taxes | |||||||||||||
and interest expense | 8,369 | (2,494 | ) | 161 | 6,036 | ||||||||
Interest expense | 228 | 3,645 | - | 3,873 | |||||||||
Pre-tax operating income (loss) | $ | 8,141 | $ | (6,139 | ) | $ | 161 | 2,163 | |||||
Net realized investment gains | 1,818 | ||||||||||||
Pre-tax income | $ | 3,981 |
1 | Corporate & Other includes the effect of eliminating transactions between the Insurance Operations. |
7
Statements of Operations - PMA Insurance Group | |||||||||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 1st | ||||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | Quarter | ||||||||||||||
Gross Premiums Written | $ | 133,737 | $ | 99,328 | $ | 133,903 | $ | 89,484 | $ | 164,720 | 23.2 | % | |||||||
Net Premiums Written | $ | 113,390 | $ | 85,639 | $ | 107,795 | $ | 66,873 | $ | 125,893 | 11.0 | % | |||||||
Revenues: | |||||||||||||||||||
Net premiums earned | $ | 91,221 | $ | 94,803 | $ | 94,696 | $ | 87,379 | $ | 93,995 | 3.0 | % | |||||||
Net investment income | 8,559 | 8,753 | 8,998 | 9,190 | 9,704 | 13.4 | % | ||||||||||||
Other revenues | 7,074 | 7,165 | 6,573 | 7,065 | 7,680 | 8.6 | % | ||||||||||||
Total revenues | 106,854 | 110,721 | 110,267 | 103,634 | 111,379 | 4.2 | % | ||||||||||||
Losses and Expenses: | |||||||||||||||||||
Losses and loss adjustment expenses | 64,519 | 67,682 | 68,255 | 61,841 | 65,919 | 2.2 | % | ||||||||||||
Acquisition expenses | 18,219 | 18,923 | 19,098 | 17,486 | 18,779 | 3.1 | % | ||||||||||||
Operating expenses | 14,325 | 16,193 | 13,720 | 17,821 | 13,087 | -8.6 | % | ||||||||||||
Dividends to policyholders | 1,422 | 1,011 | 589 | 510 | 1,622 | 14.1 | % | ||||||||||||
Total losses and expenses | 98,485 | 103,809 | 101,662 | 97,658 | 99,407 | 0.9 | % | ||||||||||||
Operating income before income taxes | |||||||||||||||||||
and interest expense | 8,369 | 6,912 | 8,605 | 5,976 | 11,972 | 43.1 | % | ||||||||||||
Interest expense | 228 | 241 | 254 | 255 | 249 | 9.2 | % | ||||||||||||
Pre-tax operating income | $ | 8,141 | $ | 6,671 | $ | 8,351 | $ | 5,721 | $ | 11,723 | 44.0 | % |
8
Insurance Ratios - PMA Insurance Group | |||||||||||||||||||
1st Quarter 2006 | 2nd Quarter 2006 | 3rd Quarter 2006 | 4th Quarter 2006 | 1st Quarter 2007 | Point Chg. 1st Quarter Better (Worse) | ||||||||||||||
Ratios - GAAP Basis: | |||||||||||||||||||
Loss and LAE ratio | 70.7 | % | 71.4 | % | 72.1 | % | 70.8 | % | 70.1 | % | 0.6 | ||||||||
Expense ratio: | |||||||||||||||||||
Acquisition expenses | 20.0 | % | 20.0 | % | 20.2 | % | 20.0 | % | 20.0 | % | - | ||||||||
Operating expenses 1 | 8.6 | %2 | 10.0 | %2 | 8.1 | %2 | 12.9 | %2 | 6.4 | % | 2.2 | ||||||||
Total expense ratio | 28.6 | % | 30.0 | % | 28.3 | % | 32.9 | % | 26.4 | % | 2.2 | ||||||||
Policyholders' dividend ratio | 1.6 | % | 1.1 | % | 0.6 | % | 0.6 | % | 1.7 | % | (0.1 | ) | |||||||
Combined ratio | 100.9 | %2 | 102.5 | %2 | 101.0 | %2 | 104.3 | %2 | 98.2 | % | 2.7 | ||||||||
Net investment income ratio | -9.4 | % | -9.2 | % | -9.5 | % | -10.5 | % | -10.3 | % | 0.9 | ||||||||
Operating ratio | 91.5 | % | 93.3 | % | 91.5 | % | 93.8 | % | 87.9 | % | 3.6 |
1 | The operating expense ratio equals insurance-related operating expenses divided by net premiums earned. Insurance-related operating expenses were $7.9 million, $9.5 million, $7.7 million, $11.3 million and $6.0 million for the first, second, third and fourth quarters of 2006 and the first quarter of 2007, respectively. | ||||||||||||
2 | Certain reclassifications between insurance-related and non-insurance related expenses of prior period amounts have been made to conform to the current year presentation. These reclassifications had no impact on the previously reported full year 2006 ratios. |
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Statements of Operations - Run-off Operations | |||||||||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 1st | ||||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | Quarter | ||||||||||||||
Gross Premiums Written | $ | 398 | $ | 960 | $ | 526 | $ | 102 | $ | 1,507 | NM | ||||||||
Net Premiums Written | $ | 606 | $ | 527 | $ | 701 | $ | 309 | $ | 1,495 | NM | ||||||||
Revenues: | |||||||||||||||||||
Net premiums earned | $ | 606 | $ | 332 | $ | 746 | $ | 1,094 | $ | 1,193 | 96.9 | % | |||||||
Net investment income | 3,201 | 2,408 | 1,695 | 1,392 | 1,000 | -68.8 | % | ||||||||||||
Total revenues | 3,807 | 2,740 | 2,441 | 2,486 | 2,193 | -42.4 | % | ||||||||||||
Losses and Expenses: | |||||||||||||||||||
Losses and loss adjustment expenses | 874 | (1,303 | ) | (1,501 | ) | (1,146 | ) | 1,107 | 26.7 | % | |||||||||
Acquisition expenses | (894 | ) | 629 | 713 | 339 | 359 | NM | ||||||||||||
Operating expenses | 3,666 | 2,986 | 3,055 | 2,808 | 1,465 | -60.0 | % | ||||||||||||
Total losses and expenses | 3,646 | 2,312 | 2,267 | 2,001 | 2,931 | -19.6 | % | ||||||||||||
Pre-tax operating income (loss) | $ | 161 | $ | 428 | $ | 174 | $ | 485 | $ | (738 | ) | NM |
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Statements of Operations - Corporate & Other | |||||||||||||||||||
(Dollar Amounts in Thousands) | |||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | % Change | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | 1st | ||||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | Quarter | ||||||||||||||
Gross Premiums Written | $ | (168 | ) | $ | (213 | ) | $ | (158 | ) | $ | (157 | ) | $ | (156 | ) | 7.1 | % | ||
Net Premiums Written | $ | (168 | ) | $ | (213 | ) | $ | (158 | ) | $ | (157 | ) | $ | (156 | ) | 7.1 | % | ||
Revenues: | |||||||||||||||||||
Net premiums earned | $ | (168 | ) | $ | (213 | ) | $ | (158 | ) | $ | (157 | ) | $ | (156 | ) | 7.1 | % | ||
Net investment income | (360 | ) | (103 | ) | 54 | (249 | ) | (179 | ) | 50.3 | % | ||||||||
Other revenues | 30 | 121 | 51 | 42 | 107 | NM | |||||||||||||
Total revenues | (498 | ) | (195 | ) | (53 | ) | (364 | ) | (228 | ) | 54.2 | % | |||||||
Losses and Expenses: | |||||||||||||||||||
Operating expenses | 1,996 | 2,401 | 2,178 | 2,337 | 2,514 | 26.0 | % | ||||||||||||
Total losses and expenses | 1,996 | 2,401 | 2,178 | 2,337 | 2,514 | 26.0 | % | ||||||||||||
Operating loss before income taxes | |||||||||||||||||||
and interest expense | (2,494 | ) | (2,596 | ) | (2,231 | ) | (2,701 | ) | (2,742 | ) | -9.9 | % | |||||||
Interest expense | 3,645 | 3,532 | 2,785 | 2,581 | 2,567 | -29.6 | % | ||||||||||||
Pre-tax operating loss | $ | (6,139 | ) | $ | (6,128 | ) | $ | (5,016 | ) | $ | (5,282 | ) | $ | (5,309 | ) | 13.5 | % |
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Operating Cash Flows - Consolidated | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Receipts: | ||||||||||||||||
Premiums and other revenues collected | $ | 104,991 | $ | 96,652 | $ | 108,027 | $ | 93,253 | $ | 102,505 | ||||||
Investment income received | 15,368 | 14,890 | 11,795 | 13,730 | 13,251 | |||||||||||
Total receipts | 120,359 | 111,542 | 119,822 | 106,983 | 115,756 | |||||||||||
Disbursements: | ||||||||||||||||
Losses and LAE paid: | ||||||||||||||||
Losses and LAE paid - current year | 3,496 | 17,337 | 17,034 | 22,696 | 4,605 | |||||||||||
Losses and LAE paid - prior years | 92,597 | 92,004 | 65,455 | 90,825 | 85,995 | |||||||||||
Total losses and LAE paid | 96,093 | 109,341 | 82,489 | 113,521 | 90,600 | |||||||||||
Insurance operating expenses paid | 46,203 | 39,618 | 26,899 | 30,327 | 38,826 | |||||||||||
Policyholders' dividends paid | 246 | 397 | 451 | 812 | 499 | |||||||||||
Interest on corporate debt | 4,791 | 2,965 | 3,470 | 2,461 | 3,082 | |||||||||||
Total disbursements | 147,333 | 152,321 | 113,309 | 147,121 | 133,007 | |||||||||||
Net other | (12,368 | ) | 7,406 | (9,204 | ) | 19,380 | 1,024 | |||||||||
Net operating cash flows | $ | (39,342 | ) | $ | (33,373 | ) | $ | (2,691 | ) | $ | (20,758 | ) | $ | (16,227 | ) |
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Operating Cash Flows - PMA Insurance Group | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Receipts: | ||||||||||||||||
Premiums and other revenues collected | $ | 99,740 | $ | 94,320 | $ | 107,102 | $ | 92,720 | $ | 99,923 | ||||||
Investment income received | 10,479 | 10,598 | 8,831 | 10,564 | 10,504 | |||||||||||
Total receipts | 110,219 | 104,918 | 115,933 | 103,284 | 110,427 | |||||||||||
Disbursements: | ||||||||||||||||
Losses and LAE paid: | ||||||||||||||||
Losses and LAE paid - current year | 3,496 | 17,337 | 17,034 | 22,696 | 4,605 | |||||||||||
Losses and LAE paid - prior years | 65,113 | 57,537 | 45,463 | 44,787 | 62,815 | |||||||||||
Total losses and LAE paid | 68,609 | 74,874 | 62,497 | 67,483 | 67,420 | |||||||||||
Insurance operating expenses paid | 42,110 | 35,129 | 24,446 | 26,521 | 35,766 | |||||||||||
Policyholders' dividends paid | 246 | 397 | 451 | 812 | 499 | |||||||||||
Interest on corporate debt | 224 | 227 | 246 | 255 | 252 | |||||||||||
Total disbursements | 111,189 | 110,627 | 87,640 | 95,071 | 103,937 | |||||||||||
Net other | (6,376 | ) | 1,955 | (1,939 | ) | 4,615 | (4,189 | ) | ||||||||
Net operating cash flows | $ | (7,346 | ) | $ | (3,754 | ) | $ | 26,354 | $ | 12,828 | $ | 2,301 |
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Operating Cash Flows - Run-off Operations | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||
Receipts: | ||||||||||||||||
Premiums collected | $ | 5,251 | $ | 2,332 | $ | 925 | $ | 533 | $ | 2,582 | ||||||
Investment income received | 4,889 | 4,292 | 2,964 | 3,166 | 2,747 | |||||||||||
Total receipts | 10,140 | 6,624 | 3,889 | 3,699 | 5,329 | |||||||||||
Disbursements: | ||||||||||||||||
Losses and LAE paid: | ||||||||||||||||
Losses and LAE paid - prior years | 27,484 | 34,467 | 19,992 | 46,038 | 23,180 | |||||||||||
Total losses and LAE paid | 27,484 | 34,467 | 19,992 | 46,038 | 23,180 | |||||||||||
Insurance operating expenses paid | 4,093 | 4,489 | 2,453 | 3,806 | 3,060 | |||||||||||
Total disbursements | 31,577 | 38,956 | 22,445 | 49,844 | 26,240 | |||||||||||
Net other | 1,083 | 1,775 | (5,500 | ) | 8,071 | (1,382 | ) | |||||||||
Net operating cash flows | $ | (20,354 | ) | $ | (30,557 | ) | $ | (24,056 | ) | $ | (38,074 | ) | $ | (22,293 | ) |
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Statutory Surplus | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 20071 | ||||||||||||
PMA Pool 2 | $ | 316,726 | $ | 321,114 | $ | 325,242 | $ | 321,245 | $ | 327,379 4 | ||||||
PMA Capital Insurance Company 3 | 203,261 | 125,989 | 5 | 123,428 | 121,566 | 117,098 4 |
PMA Capital Corporation | ||||||||||||||||
Statutory Financial Information - PMA Pool 2 | ||||||||||||||||
(Dollar Amounts in Thousands) | ||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2006 | 2006 | 2006 | 2006 | 20071 | ||||||||||||
Net Premiums Written: | ||||||||||||||||
Workers' Compensation | $ | 100,096 | $ | 76,602 | $ | 95,437 | $ | 58,731 | $ | 113,732 | ||||||
Other Commercial Lines | 11,048 | 6,687 | 6,067 | 4,637 | 10,258 | |||||||||||
Total - PMA Pool | $ | 111,144 | $ | 83,289 | $ | 101,504 | $ | 63,368 | $ | 123,990 | ||||||
Statutory Ratios: | ||||||||||||||||
Loss and LAE ratio | 71.5 | % | 72.5 | % | 72.1 | % | 71.3 | % | 71.2 | % | ||||||
Underwriting expense ratio | 24.6 | % | 31.6 | % | 26.3 | % | 37.5 | % | 21.1 | % | ||||||
Policyholders' dividend ratio | 0.9 | % | 0.1 | % | 0.5 | % | 0.6 | % | 0.6 | % | ||||||
Combined ratio | 97.0 | % | 104.2 | % | 98.9 | % | 109.4 | % | 92.9 | % | ||||||
Operating ratio | 88.4 | % | 96.0 | % | 90.5 | % | 99.8 | % | 83.3 | % |
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 (deficit) of $148.1 million and ($3.0) 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. |
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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 | 610.397.5083 | |||||
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 5/2/2007): | ||||||
A.M. Best | Moody's | |||||
PMA Pool 1 | A- (4th of 16) | Baa3 (10th 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. |
16