Philadelphia Consolidated Holding (PHLY) 8-K Other events

Exhibit 99.1

PHILADELPHIA CONSOLIDATED HOLDING CORP.
FOURTH QUARTER RESULTS
DECEMBER 31, 2003

FEBRUARY 11, 2004 PRESS RELEASE

Bala Cynwyd, PA – Philadelphia Consolidated Holding Corp. (PHLY-NASDAQ) today reported net income for the quarter ended December 31, 2003 increased 65.9% to $22.4 million ($0.98 diluted and $1.02 basic earnings per share) vs. $13.5 million ($0.61 diluted and $0.62 basic earnings per share) for the same period in 2002. Net income for the quarter ended December 31, 2003 included $1.4 million ($0.06 diluted gain per share) of after tax net realized investment gains vs. $0.3 million ($0.01 diluted loss per share) of after tax net realized investment losses for the same quarter in 2002. Gross written premiums increased 38.1% to $215.4 million vs. $156.0 million in the fourth quarter of 2002, and the combined ratio for the quarter was 87.5% vs. 90.7% for the same quarter in 2002.

Financial results for the fourth quarter of 2003 included:

• A $5.8 million pretax charge ($0.16 after tax diluted loss per share) to increase gross and net reserves for loss and loss adjustment expenses for Firstar residual value policies from $21.7 to $27.5 million resulting from the previously announced settlement of the Firstar litigation.

• A $7.5 million pretax charge ($0.21 after tax diluted loss per share) to increase net reserves for loss and loss adjustment expenses primarily for claims made professional liability and commercial automobile lines of business in prior accident years.

• A $7.5 million pretax benefit ($0.21 after tax diluted earnings per share) on the 2003 accident year quota share reinsurance agreement due to favorable 2003 accident year loss ratio results.

Net income for the year ended December 31, 2003 increased 67.5% to $60.3 million ($2.66 diluted and $2.75 basic earnings per share) vs. net income of $36.0 million ($1.62 diluted and $1.67 basic earnings per share) for the same period in 2002. Net income for the year ended December 31, 2003 included $0.5 million ($0.02 diluted gain per share) of after tax net realized investment gains vs. $2.1 million ($0.09 diluted loss per share) of after tax net realized investment losses for the same period in 2002. Gross written premiums increased 36.5% for the year ended December 31, 2003 to $906.0 million vs. $663.7 million for the same period in 2002 and the combined ratio for the year

Press Release
February 11, 2004
Page 2

was 91.3% vs. 94.3% for the year ended December 31, 2002. The Company’s book value per share at December 31, 2003 was $24.71.

Financial results for the year 2003 included:

• A $33.0 million pretax charge ($0.95 after tax diluted loss per share) to increase the gross and net liability for loss and loss adjustment expense reserves for the discontinued automobile leasing residual value product, and a $5.8 million pretax charge ($0.17 after tax diluted loss per share) to increase gross and net liability for loss and loss adjustment expense reserves for Firstar residual value policies from $21.7 to $27.5 million resulting from the previously announced settlement of the Firstar litigation.

• A $9.0 million pretax benefit ($0.26 after tax diluted earnings per share) from favorable prior year development principally in the property line of the commercial package product.

• A $7.5 million pretax charge ($0.22 after tax diluted loss per share) to increase net reserves for loss and loss adjustment expenses primarily for claims made professional liability and commercial automobile lines of business in prior accident years.

• A $7.5 million pretax benefit ($0.22 after tax diluted earnings per share) on the 2003 accident year quota share reinsurance agreement due to favorable 2003 accident year loss ratio results.

Financial results for the year 2002 included:

• A $15.0 million pretax charge ($0.44 after tax diluted loss per share) to increase net reserves for loss and loss adjustment expenses for the discontinued automobile leasing residual value product.

James J. Maguire, Jr. CEO said, “In the fourth quarter, we continued to see a wealth of new opportunities in our Commercial, Personal and Specialty lines business segments through our five distribution sources: Preferred Agents, Brokers, Wholesalers, Direct and the Internet. Pricing for most casualty lines has remained firm, but the pricing for the property lines has shown signs of weakening due to heightened competition. Renewal retention level percentages for quoted accounts remained in the mid 90’s. Additionally, our improved technology increased the speed of service for policy and endorsement issuance. I am confident in our ability to take advantage of the many opportunities that lie ahead for 2004.”

Press Release
February 11, 2004
Page 3

Forward-Looking Information

This release contains forward-looking statements that are based on management’s estimates, assumptions and projections. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary remarks regarding important factors which, among others, could cause the Company’s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, results of the Company’s business, and the other matters referred to above include, but are not limited to: (i) changes in the business environment in which the Company operates, including inflation and interest rates; (ii) changes in taxes, governmental laws, and regulations; (iii) competitive product and pricing activity; (iv) difficulties of managing growth profitably; (v) claims development and the adequacy of our liability for unpaid loss and loss adjustment expenses; (vi) severity of natural disasters and other catastrophe losses; (vii) adequacy of reinsurance coverage which may be obtained by the Company; (viii) ability and willingness of our reinsurers to pay; and (ix) future terrorist attacks.

Philadelphia Insurance Companies, rated “A+” (Superior) by A.M. Best Company, is a specialty niche Company which markets and underwrites property and casualty insurance products through 36 proprietary underwriting offices across the U.S. of A. For more information about our Company or to review our 2002 annual report, visit our web site atwww.phly.com.

PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

				As of December 31,
				2003			2002
ASSETS
INVESTMENTS:
	FIXED MATURITIES AVAILABLE FOR SALE AT MARKET (AMORTIZED COST $1,066,523 AND $832,701)			$	1,081,694		$	854,513
	EQUITY SECURITIES AT MARKET (COST $79,813 AND $51,257)				90,358			54,346
			TOTAL INVESTMENTS		1,172,052			908,859
	CASH AND CASH EQUIVALENTS				73,942			42,002
	ACCRUED INVESTMENT INCOME				11,008			8,571
	PREMIUMS RECEIVABLE				179,509			130,007
	PREPAID REINSURANCE PREMIUMS AND REINSURANCE RECEIVABLES				290,718			151,352
	DEFERRED INCOME TAXES				19,176			7,541
	DEFERRED ACQUISITION COSTS				56,288			61,272
	PROPERTY AND EQUIPMENT, NET				16,821			12,794
	GOODWILL				25,724			25,724
	OTHER ASSETS				22,354			10,212
			TOTAL ASSETS	$	1,867,592		$	1,358,334
		LIABILITIES AND SHAREHOLDERS’ EQUITY
POLICY LIABILITIES AND ACCRUALS:
	UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES			$	625,647		$	445,548
	UNEARNED PREMIUMS				422,589			306,093
			TOTAL POLICY LIABILITIES AND ACCRUALS		1,048,236			751,641
	FUNDS HELD PAYABLE TO REINSURER				110,011			—
	LOANS PAYABLE				48,482			39,113
	PREMIUMS PAYABLE				35,044			33,553
	OTHER LIABILITIES				82,083			56,204
			TOTAL LIABILITIES		1,323,856			880,511
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
	PREFERRED STOCK, $.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED, NONE ISSUED AND OUTSTANDING
	COMMON STOCK, NO PAR VALUE, 100,000,000 SHARES AUTHORIZED, 22,007,552 AND 21,868,877 SHARES ISSUED AND OUTSTANDING				281,088			276,945
	NOTES RECEIVABLE FROM SHAREHOLDERS				(5,444	)		(6,407	)
	ACCUMULATED OTHER COMPREHENSIVE INCOME				16,715			16,185
	RETAINED EARNINGS				251,377			191,100
			TOTAL SHAREHOLDERS’ EQUITY		543,736			477,823
			TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,867,592		$	1,358,334

PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

			For the Three Months						For the Years
			Ended December 31,						Ended December 31,
			2003			2002			2003			2002
REVENUE:
	NET EARNED PREMIUMS		$	159,080		$	125,523		$	571,579		$	421,186
	NET INVESTMENT INCOME			10,458			9,789			38,806			37,516
	NET REALIZED INVESTMENT GAIN (LOSS)			2,103			(436	)		794			(3,371	)
	OTHER INCOME			1,830			476			5,519			911
		TOTAL REVENUE		173,471			135,352			616,698			456,242
LOSSES AND EXPENSES:
	LOSS AND LOSS ADJUSTMENT EXPENSES			141,524			109,151			469,547			361,154
	NET REINSURANCE RECOVERIES			(45,138	)		(33,948	)		(110,370	)		(93,721	)
	NET LOSS AND LOSS ADJUSTMENT EXPENSES			96,386			75,203			359,177			267,433
	ACQUISITION COSTS AND OTHER UNDERWRITING EXPENSES			42,792			38,697			162,912			129,918
	OTHER OPERATING EXPENSES			1,848			1,802			7,822			6,372
		TOTAL LOSSES AND EXPENSES		141,026			115,702			529,911			403,723
INCOME BEFORE INCOME TAXES				32,445			19,650			86,787			52,519
INCOME TAX EXPENSE (BENEFIT):
	CURRENT			13,038			7,605			38,430			22,018
	DEFERRED			(3,027	)		(1,438	)		(11,920	)		(5,504	)
		TOTAL INCOME TAX EXPENSE		10,011			6,167			26,510			16,514
		NET INCOME	$	22,434		$	13,483		$	60,277		$	36,005
PER AVERAGE SHARE DATA:
	BASIC EARNINGS PER SHARE		$	1.02		$	0.62		$	2.75		$	1.67
	DILUTED EARNINGS PER SHARE		$	0.98		$	0.61		$	2.66		$	1.62
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING				21,994,960			21,710,115			21,908,788			21,611,053
WEIGHTED-AVERAGE SHARE EQUIVALENTS OUTSTANDING				981,017			559,779			751,600			682,382
WEIGHTED-AVERAGE SHARES AND SHARE EQUIVALENTS OUTSTANDING				22,975,977			22,269,894			22,660,388			22,293,435