Philadelphia Consolidated Holding (PHLY) 8-K Results of Operations and Financial Condition

Exhibit 99.1

PHILADELPHIA CONSOLIDATED HOLDING CORP.
SECOND QUARTER RESULTS
JUNE 30, 2008

JULY 23, 2008 PRESS RELEASE

Bala Cynwyd, PA – Philadelphia Consolidated Holding Corp. (NASDAQ: PHLY) today reported net income for the quarter ended June 30, 2008 of $52.9 million ($0.73 diluted earnings per share and $0.76 basic earnings per share). This compares to $94.4 million of net income ($1.27 diluted earnings per share and $1.34 basic earnings per share) for the quarter ended June 30, 2007. After-tax net realized investment gains (losses) were $(7.5) million ($(0.10) diluted loss per share) for the quarter ended June 30, 2008 compared to $18.2 million ($0.25 diluted earnings per share) for the quarter ended June 30, 2007. Gross written premiums for the quarter ended June 30, 2008 increased 11.7% to $445.3 million from $398.5 million for the quarter ended June 30, 2007, and the combined ratio for the quarter ended June 30, 2008 was 86.2% compared to 74.2% for the quarter ended June 30, 2007. The Company’s book value per share as of June 30, 2008 increased to $22.30 from $21.47 as of December 31, 2007.

Financial results for the quarter ended June 30, 2008 included:

• An $18.5 million pre-tax benefit ($12.0 million after-tax, or $0.17 diluted earnings per share) from a decrease in net unpaid loss and loss adjustment expenses due to favorable trends in prior years’ claim emergence. This benefit compares to a $20.8 million pre-tax benefit ($13.5 million after-tax, or $0.18 diluted earnings per share) recognized in the quarter ended June 30, 2007 from a decrease in net unpaid loss and loss adjustment expenses due to favorable trends in prior years’ claims emergence.

• $20.6 million of pre-tax losses ($13.4 million after-tax, or $0.18 diluted loss per share) resulting from hail, tornado, and wind losses which occurred in Minnesota, Nebraska, Kansas, and Oklahoma during the period of May 22, 2008 through May 26, 2008, and which occurred in Illinois, Indiana, Kansas, Minnesota, Nebraska, and Oklahoma during the period of May 29, 2008 through June 1, 2008.

• An $11.6 million pre-tax non-cash realized investment loss ($7.5 million after-tax, or $0.10 diluted loss per share) resulting from other than temporary impairment evaluations related to the Company’s equity holdings.

Net income for the six months ended June 30, 2008 was $115.6 million ($1.59 diluted earnings per share and $1.65 basic earnings per share). This compares to $160.4 million of net income ($2.16 diluted earnings per share and $2.28 basic earnings per share) for the six months ended June 30, 2007. After-tax net realized investment gains (losses) were $(14.9) million ($0.20 diluted loss per share) for the six months ended June 30, 2008 compared to $19.4 million ($0.26 diluted earnings per share) for the six months ended June 30, 2007. Gross written premiums for the six months ended June 30, 2008 increased 12.1% to $888.4 million from $792.6 million for the six months

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July 23, 2008
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ended June 30, 2007, and the combined ratio for the six months ended June 30, 2008 was 83.7% compared to 75.9% for the six months ended June 30, 2007.

Financial results for the six months ended June 30, 2008 included:

• A $24.4 million pre-tax benefit ($15.9 million after-tax, or $0.22 diluted earnings per share) from a decrease in net unpaid loss and loss adjustment expenses due to favorable trends in prior years’ claim emergence. This benefit compares to a $33.7 million pre-tax benefit ($21.9 million after-tax, or $0.30 diluted earnings per share) recognized in the six months ended June 30, 2007 from a decrease in net unpaid loss and loss adjustment expenses due to favorable trends in prior years’ claims emergence.

• The hail, tornado, and wind losses as referred to above.

• A $23.3 million pre-tax non-cash realized investment loss ($15.1 million after-tax, or $0.21 diluted loss per share) resulting from other than temporary impairment evaluations related to the Company’s equity holdings.

James J. Maguire, Jr., CEO, said: “I am very pleased with our performance in this quarter and I sincerely thank our more than 1,400 employees for continuing to execute on our business plan through a challenging market. Gross written premiums grew by nearly 12%, with our core Commercial Lines Segment growing by 13.3%. Our combined ratio for the quarter was an impressive 86.2%. We continued to maintain our profitable renewal business with retention ratios of 95% on quoted business for our Commercial and Specialty Segments.”

As a result of the Company’s announcement today that it has entered into a merger agreement with Tokio Marine Holdings, Inc., the earnings call previously scheduled for Friday July 25^th has been cancelled.

Forward-Looking Information

This release may contain 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 the Company’s 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 the Company’s reinsurers to pay; (ix) future terrorist attacks; and (x) the outcome of

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July 23, 2008
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the Securities and Exchange Commission’s industry-wide investigation relating to the use of non-traditional insurance products, including finite risk reinsurance arrangements. The Company does not intend to publicly update any forward looking statement, except as may be required by law.

In operation since 1962, PHLY designs, markets, and underwrites commercial property/casualty and professional liability insurance products incorporating value added coverages and services for select industries. The Company, whose commercial lines insurance subsidiaries are rated A+ (Superior) by A.M. Best Company and A1 for insurance financial strength by Moody’s Investors Service, is nationally recognized as a member of Ward’s Top 50, Forbes’ Platinum 400 list of America’s Best Big Companies and Forbes’ 100 Best Mid-Cap Stocks in America. The organization has 47 offices strategically located across the United States to provide superior local service.

CONTACT: Investor Relations: Joseph Barnholt, Assistant Vice President, +1-610-617-7626, jbarnholt@phlyins.com.

PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

	As of
	June 30, 2008			December 31,
	(Unaudited)			2007
ASSETS
INVESTMENTS:
FIXED MATURITIES AVAILABLE FOR SALE AT MARKET (AMORTIZED COST $2,864,732 AND $2,639,471)	$	2,844,209		$	2,659,197
EQUITY SECURITIES AT MARKET (COST $339,169 AND $322,877)		348,374			356,026
TOTAL INVESTMENTS		3,192,583			3,015,223
CASH AND CASH EQUIVALENTS		89,657			106,342
ACCRUED INVESTMENT INCOME		28,300			24,964
PREMIUMS RECEIVABLE		399,896			378,217
PREPAID REINSURANCE PREMIUMS AND REINSURANCE RECEIVABLES		301,012			280,110
DEFERRED INCOME TAXES		81,717			42,855
DEFERRED ACQUISITION COSTS		187,389			184,446
PROPERTY AND EQUIPMENT, NET		21,992			26,330
OTHER ASSETS		100,964			41,451
TOTAL ASSETS	$	4,403,510		$	4,099,938
LIABILITIES AND SHAREHOLDERS’ EQUITY
POLICY LIABILITIES AND ACCRUALS:
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES	$	1,613,322		$	1,431,933
UNEARNED PREMIUMS		866,596			847,485
TOTAL POLICY LIABILITIES AND ACCRUALS		2,479,918			2,279,418
PREMIUMS PAYABLE		77,770			97,674
OTHER LIABILITIES		251,135			175,373
TOTAL LIABILITIES		2,808,823			2,552,465
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
PREFERRED STOCK, $.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED, NONE ISSUED AND OUTSTANDING		—			—
COMMON STOCK, NO PAR VALUE, 125,000,000 SHARES AUTHORIZED, 71,503,346 AND 72,087,287 SHARES ISSUED AND OUTSTANDING		399,704			423,379
NOTES RECEIVABLE FROM SHAREHOLDERS		(22,565	)		(19,595	)
ACCUMULATED OTHER COMPREHENSIVE INCOME		(7,356	)		34,369
RETAINED EARNINGS		1,224,904			1,109,320
TOTAL SHAREHOLDERS’ EQUITY		1,594,687			1,547,473
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,403,510		$	4,099,938

PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

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

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2008			2007			2008			2007
REVENUE:
NET EARNED PREMIUMS	$	393,037		$	337,315		$	772,425		$	656,033
NET INVESTMENT INCOME		32,299			28,522			64,304			55,495
NET REALIZED INVESTMENT GAIN (LOSS)		(11,513	)		28,064			(22,907	)		29,821
OTHER INCOME		3,654			850			5,007			1,680
TOTAL REVENUE		417,477			394,751			818,829			743,029
LOSSES AND EXPENSES:
LOSS AND LOSS ADJUSTMENT EXPENSES		266,106			172,234			489,492			332,753
NET REINSURANCE RECOVERIES		(42,836	)		(23,645	)		(72,803	)		(33,659	)
NET LOSS AND LOSS ADJUSTMENT EXPENSES		223,270			148,589			416,689			299,094
ACQUISITION COSTS AND OTHER UNDERWRITING EXPENSES		115,479			101,746			229,635			198,650
OTHER OPERATING EXPENSES		4,376			2,981			7,965			6,136
TOTAL LOSSES AND EXPENSES		343,125			253,316			654,289			503,880
INCOME BEFORE INCOME TAXES		74,352			141,435			164,540			239,149
INCOME TAX EXPENSE (BENEFIT):
CURRENT		30,072			56,511			65,350			93,330
DEFERRED		(8,628	)		(9,477	)		(16,394	)		(14,562	)
TOTAL INCOME TAX EXPENSE		21,444			47,034			48,956			78,768
NET INCOME	$	52,908		$	94,401		$	115,584		$	160,381
PER AVERAGE SHARE DATA:
NET INCOME — BASIC	$	0.76		$	1.34		$	1.65		$	2.28
NET INCOME — DILUTED	$	0.73		$	1.27		$	1.59		$	2.16
WEIGHTED—AVERAGE COMMON SHARES OUTSTANDING		69,809,174			70,361,554			70,128,823			70,255,758
WEIGHTED—AVERAGE SHARE EQUIVALENTS OUTSTANDING		2,608,996			3,835,617			2,597,895			3,966,198
WEIGHTED—AVERAGE SHARES AND SHARE EQUIVALENTS OUTSTANDING		72,418,170			74,197,171			72,726,718			74,221,956