Pmi (PMI) 8-K The Pmi Group, Inc. Reports Third Quarter 2005

Exhibit 99.1

	NEWS RELEASE
	Investor and Media Contacts:
	Bill Horning / Beth Haiken
	925.658.6193 / 925.658.6192

THE PMI GROUP, INC. REPORTS THIRD QUARTER 2005

NET INCOME OF $95.7 MILLION

HURRICANE KATRINARELATEDCHARGESREDUCE

QUARTERLY NETINCOMEBY $8.9MILLION

Walnut Creek, CA, November 3, 2005 - The PMI Group, Inc. (NYSE: PMI) (the “Company”) today reported net income for the third quarter of 2005 and the first nine months of 2005. The Company’s quarterly results were reduced by $8.9 million in after tax charges and reserves related to Hurricane Katrina.

Consolidated net income for the third quarter totaled $95.7 million compared to $102.6 million for the same period a year ago.Consolidated net income per diluted share was $0.97 in the third quarter of 2005, compared to $0.99 for the same period a year ago. The net income results combined with the common share repurchase activity for the third quarter of 2005 resulted in a book value per share of $35.69 at September 30, 2005, compared to a book value per share $32.05 at September 30, 2004, representing an increase of 11.4 percent.

Consolidated net income from continuing operations for the first nine months of 2005 totaled $301.5 million compared to $284.9 million for the same period a year ago.Consolidated net income from continuing operations per diluted share was $3.00 for the first nine months of 2005 compared to $2.75 per diluted share for the first nine months of 2004, representing an increase of 9.1 percent. Consolidated net income from continuing operations for the first nine months of 2004 does not include the financial results from American Pioneer Title Insurance Company, which was designated as a discontinued operation in the fourth quarter of 2003 and sold in the first quarter of 2004.

“The PMI Group posted a fundamentally solid third quarter which included several charges and increases in loss reserves related to Hurricane Katrina that reduced net income in both its core U.S. mortgage insurance business and equity in earnings from unconsolidated subsidiaries. These items were the result of the devastating natural disaster that severely affected areas of Louisiana, Mississippi and Alabama” said Roger Haughton, Chairman and Chief Executive Officer of The PMI Group, Inc. “Recovery from the hurricane poses a long-term challenge and PMI Group stands ready to help.

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Additionally, through the PMI Foundation, the company and its employees are doing all they can to help alleviate the hardships and suffering of those in the Gulf Coast region.”

Impact from Hurricane Katrina in the Third Quarter 2005

Description of Increase or Charge ($ in millions)	After-Tax Impact to The PMI Group, Inc.
Financial Guaranty Insurance Company’s (FGIC) – results were negatively affected by a pre-tax loss provision in the amount of $20.8 million related to its exposure to municipal finance obligations impacted by Hurricane Katrina	$	5.3
Select Portfolio Servicing, Inc.– was adversely impacted by a pre-tax reserve provision in the amount of $6.6 million related to force placed hazard and flood reinsurance for the Katrina impacted areas		1.8
U.S. Mortgage Insurance Operations1 – increased reserves for losses as a result of increased loans in default within the Katrina impacted areas		1.0
Hurricane Katrina Donation – The PMI Group, Inc. announced a disaster relief response package for victims of Hurricane Katrina, including an in-kind donation of single family homes		0.8
Total Increases or Charges	$	8.9

Third Quarter 2005 Highlights

• Combined² insurance in force grew to $275.1 billion at September 30, 2005 from $254.3 billion at September 30, 2004;

• Consolidated premiums earned grew $10.0 million to $205.1 million in the third quarter of 2005, compared to $195.1 million in the third quarter of 2004;

• U.S. Mortgage Insurance Operations realized a 10.6 percent increase in net premiums written in the third quarter of 2005 to $158.9 million compared to $143.7 million in the same period for 2004;

• U.S. Mortgage Insurance Operations primary claims paid decreased to $50.3 million in the third quarter of 2005 compared to $57.7 in the second quarter of 2005 and $52.1 million in the third quarter of 2004.

• International Operations³ realized an 18.1 percent increase in net income in the third quarter 2005 to $28.0 million compared to $23.7 at September 30, 2004;

¹ “U.S. Mortgage Insurance Operations” includes the results of PMI Mortgage Insurance Co. and affiliated U.S. reinsurance companies (“PMI”) and equity in earnings from CMG.

² “Combined” includes the results from U.S. Mortgage Insurance Operations, CMG Mortgage Insurance Company and its affiliates (“CMG”), PMI Australia and PMI Europe’s primary insurance and credit default swap transactions.

³ “International Operations” includes the results of PMI Australia, PMI Europe and the results of operations from the Hong Kong branch operations.

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• Equity in earnings from CMG for the quarter totaled $5.2 million compared to $3.7 million for the same period a year ago representing an increase of 41 percent.

• At September 30, 2005, the Company had repurchased $105.5 million of the $150 million common share repurchase program authorized on July 27, 2005. Repurchases of common shares for the nine months ended September 30 totaled $205.5 million. The Company paid approximately $4.7 million in quarterly dividends under its increased annual dividend rate of $0.21 per common share.

Consolidated Operating Results

Consolidated net premiums written for the quarter and year to date totaled $206.1 million and $599.6 million, respectively, compared to $187.0 million and $571.3 million for the same periods a year ago. The increases were due primarily to an increase in average premium rates in U.S. Mortgage Insurance Operations and favorable foreign currency exchange rates in International Operations.

Consolidated premiums earned for the quarter and year to date were $205.1 million and $611.0 million, respectively, compared to $195.1 million and $568.1 million for the same periods a year ago. The increases were due primarily to increases in premiums earned by U.S. Mortgage Insurance Operations and International Operations.

Consolidated losses and loss adjustment expenses for the quarter and year to date totaled $61.3 million and $193.0 million, respectively, compared to $60.8 million and $177.2 million for the third quarter 2004. The year to date increases were due primarily to higher claims paid in U.S. Mortgage Insurance Operations.

Consolidated other underwriting and operating expensesfor the quarter and year to date totaled $54.5 million and $154.6 million, respectively, compared to $47.0 million and $146.9 million for the same periods a year ago. The increase in the third quarter of 2005 was primarily due to an increase in expenses in International Operations driven by higher PMI Europe profit sharing commission accruals related to the U.K. lenders’ mortgage insurance portfolio acquired in 2004 and by increases in PMI Australia’s payroll and payroll related expenses as a result of increased employee headcount.

Consolidated reserve for losses and loss adjustment expenses totaled $366.3 million at September 30, 2005 compared to $364.4 million at June 30, 2005. The

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increase was a result of an increase in loss reserves for the U.S. Mortgage Insurance Operations partially offset by a decrease in loss reserves for International Operations.

U.S. Mortgage Insurance Operations

Net income for U.S. Mortgage Insurance Operations for the quarter and year to date totaled $69.5 million and $205.6 million, respectively, compared to $67.8 million and $184.7 million for the same periods a year ago. The increases were due primarily to higher premiums earned partially offset by higher losses and loss adjustment expenses.

Net premiums writtenfor the quarter and year to date totaled $158.9 million and $466.0 million, respectively, compared to $143.7 million and $444.2 million for the same periods in 2004. The increases were due primarily to an increase in average premium rates.

Premiums earned for the quarter and year to date totaled $166.1 million and $498.4 million, respectively, compared to $162.3 million and $465.7 million for the same periods a year ago. The increase in the third quarter of 2005 compared to the corresponding period in 2004 was due primarily to an increase in average premium rates. The increase in the first nine months of 2005 compared to the corresponding period in 2004 was due primarily to increases in average premium rates and to the recognition of premiums associated with loan cancellations under non-refundable single and annual premium policies.

Equity in earnings from CMG for the quarter and year to date totaled $5.2 million and $14.2 million, respectively, compared to $3.7 million and $10.7 million for the same periods a year ago. The increases compared to the corresponding periods in 2004 were primarily a result of increases in CMG’s primary insurance in force and risk in force.

Losses and loss adjustment expenses for the quarter and year to date totaled $61.7 million and $190.3 million, respectively, compared to $60.1 million and $174.8 million for the same periods a year ago. The increase in losses and loss adjustment expenses in the first nine months of 2005 as compared to the corresponding period in 2004 was primarily a result of the seasoning of PMI’s insurance portfolio and business mix.

Amortization of deferred policy acquisition costs for the quarter and year to date totaled $14.5 million and $45.5 million, respectively, compared to $18.0 million and $55.5 million for the same periods a year ago. The decreases were primarily the result of lower levels of new insurance written.

Other underwriting and operating expenses for the quarter and year to date totaled $25.3 million and $74.1 million, respectively, compared to $23.1 million and $74.1 million for the same periods a year ago. The increase in other underwriting and operating expenses for the third quarter of 2005 compared to the

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corresponding period in 2004 was due primarily to higher compensation expenses. In addition to the other underwriting and operating expenses above, during the third quarter of 2004, the Company received a $2.6 million (pre-tax) refund relating to the settlement of theBaynham class action litigation.

NEW INSURANCE WRITTEN

(Dollars in billions)	Q3 2005		YTD 2005		Q3 2004		YTD 2004
Domestic4 primary new insurance written	$	10.5	$	30.8	$	12.0	$	34.8
Excluding CMG	$	8.7	$	26.6	$	10.5	$	30.7
Bulk new insurance written	$	0.9	$	5.0	$	1.4	$	2.7
Domestic pool new insurance written	$	5.2	$	9.7	$	1.0	$	7.4

Domestic primary new insurance written for the quarter and year to date totaled $10.5 billion and $30.8 billion, respectively, compared to $12.0 billion and $34.8 billion for the same periods a year ago. The decreases were driven primarily by decreases in the size of the private mortgage insurance market.

PRIMARY INSURANCEAND RISK IN FORCE

(Dollars in billions)	As of 9/30/05		As of 6/30/05		As of 9/30/04
Domestic primary insurance in force	$	116.6	$	118.1	$	118.8
Excluding CMG	$	101.2	$	103.4	$	104.8
Domestic primary risk in force	$	28.8	$	29.0	$	28.4
Excluding CMG	$	25.1	$	25.6	$	25.3
Domestic annual primary persistency rate		62.3%		62.9%		60.6%
Excluding CMG		61.2%		62.0%		59.5%

Domestic primary insurance in forcetotaled $116.6 billion at September 30, 2005, compared to $118.8 billion a year ago.Domestic primary risk in forcetotaled $28.8 billion at September 30, 2005, compared to $28.4 billion at the end of the third quarter of 2004 and was driven primarily by a greater number of high LTV loans with deeper coverage and higher average loan balances. The domestic annual persistency rate increased to 62.3% as of September 30, 2005 from 60.6% as of September 30, 2004.

⁴ “Domestic” includes results from U.S. Mortgage Insurance Operations and CMG.

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PRIMARY DEFAULT RATES

	As of 9/30/05		As of 6/30/05		As of 9/30/04
Domestic primary mortgage insurance	4.48	%	4.03	%	4.14	%
Excluding bulk	3.81	%	3.48	%	3.62	%
Excluding CMG	5.05	%	4.51	%	4.61	%
Excluding CMG and bulk transactions	4.36	%	3.94	%	4.07	%

At September 30, 2005, U.S. Mortgage Insurance Operationsprimary default ratewas 5.05 percent compared to 4.61 percent at September 30, 2004. The increase in the primary default rate at September 30, 2005 compared to the corresponding date in 2004 was due primarily to a decline in the number of primary insurance policies in force and an increase in primary loans in default.

CLAIMS PAID

(Dollars in millions)	Q3 2005		YTD 2005		Q3 2004		YTD 2004
Primary – flow	$	38.8	$	126.6	$	37.2	$	104.3
Primary – bulk		11.4		36.8		14.8		41.2
Total primary		50.3		163.4		52.1		145.4
Total pool and other		5.3		14.9		6.4		14.6
Total claims paid	$	55.5	$	178.4	$	58.5	$	160.0

May not total due to rounding

Primary claims paid for the quarter and year to date totaled $50.3 million and $163.4 million, respectively, compared to $52.1 million and $145.4 million for the same periods a year ago. The level of primary claims paid in the third quarter of 2005 reflects a return to a more normalized quarterly level of claims involving bankruptcy proceedings. The increase in the first nine months year to date as compared to the same period in 2004 was due to a number of factors, including the seasoning of PMI’s primary insurance portfolio’s largest book years, an increased number of claims paid that were previously delayed by bankruptcy protection and higher claim rates associated with the portion of PMI’s portfolio that contains ARMs, high LTV, Alt-A and less-than-A quality loans.

International Operations

Net incomefrom International Operations for the quarter and year to date totaled $28.0 million and $78.4 million, respectively, compared to $23.7 million and $75.7 million for the same periods a year ago. The change in the average foreign currency exchange rates from the third quarter and the first nine months of 2005 compared to the corresponding periods in 2004 favorably impacted International Operations’ net income, primarily due to

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the appreciation of the Australian dollar, offset by the amortization and decline in value of the Australian dollar and average rate foreign currency put options.

PMI Australia

Net incomefor PMI Australia for the quarter and year to date totaled $23.6 million and $64.7 million, respectively, compared to $17.6 million and $57.0 million for the same periods a year ago. The increases were due primarily to increases in premiums earned and net investment income and the appreciation of the Australian dollar relative to the U.S. dollar. In functional currency, net income for PMI Australia for the quarter and year to date totaled $31.1 million and $84.3 million Australian Dollars (AUD), respectively, compared to $24.7 million and $78.0 million AUD for the same periods a year ago.

Premiums earnedfor PMI Australia for the quarter and year to date totaled $31.8 million and $91.1 million, respectively, compared to $26.3 million and $81.9 million for the same periods a year ago. The increases were due to insurance in force growth and to the strengthening of the Australian dollar relative to the U.S. dollar.

Net investment income for PMI Australia for the quarter and year to date totaled $12.0 million and $37.0 million, respectively, compared to $9.5 million and $27.6 million for the corresponding periods in 2004. The increases in net investment income in the third quarter and first nine months of 2005 compared to the corresponding periods in 2004 were due to the growth of PMI Australia’s investment portfolio.

Primary insurance in forcefor PMI Australia was $124.0 billion at September 30, 2005, compared to $102.5 billion at September 30, 2004. The increases as of September 30, 2005, compared to September 30, 2004, were attributable to a longer average policy life and to the strengthening of the Australian dollar relative to the U.S. dollar.

Primary risk in forcefor PMI Australia was $113.0 billion at September 30, 2005, compared to $93.0 billion at September 30, 2004. The increases as of September 30, 2005, compared to September 30, 2004, were also attributable to a longer average policy life and to the strengthening of the Australian dollar relative to the U.S. dollar.

Losses and loss adjustment expensesfor PMI Australia continued to experience favorable levels of claim payments and default rates. PMI Australia’s default rate at September 30, 2005 was 0.13% compared to 0.12% at September 30, 2004.

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PMI Europe

Net income for PMI Europe for the quarter and year to date totaled $2.7 million and $8.2 million, respectively, compared to $4.8 million and $13.8 million for the same periods a year ago. The decreases in the third quarter and first nine months of 2005 were due primarily to increases in underwriting and operating expenses driven by the Royal & Sun Alliance (“R&SA”) profit sharing accrual, increases in costs associated with expansion efforts and decreases in premiums earned. In functional currency, net income from PMI Europe for the quarter and year to date totaled €2.3 million and €6.4 million, respectively, compared to €3.9 million and €11.3, respectively, for the same periods a year ago.

Net premiums written for PMI Europe for the third quarter and nine months year to date 2005 totaled $2.4 million and $5.4 million, respectively, compared to $2.3 million and $7.4 million for the same periods a year ago.

Premiums earned for PMI Europe for the third quarter were $4.6 and $13.1 million for the nine months year to date, compared to $5.2 million and $15.6 million for the same periods a year ago. The decreases for the quarter and the year to date were due primarily to decreases in premiums earned associated with the R&SA portfolio acquired by PMI Europe in 2004.

PMI Europe’snet investment income as of September 30, 2005 was $2.7 million compared to $2.3 million as of September 30, 2004. Net investment income increased in the first nine months of 2005 compared to the corresponding period in 2004 as a result of growth of the investment portfolio.

Other underwriting and operating expenses for PMI Europe for the quarter and year to date totaled $4.0 million and $8.5 million, respectively, compared to $1.4 million and $4.1 million for the same periods a year ago. The increases in the third quarter and first nine months of 2005 were due to the profit sharing accrual for R&SA performance related obligations and increases in costs associated with expansion efforts.

PMI Hong Kong

PMI’sHong Kong gross reinsurance premiums written for the third quarter and year to date totaled $4.2 million and $15.8 million, respectively, compared to $2.3 and $6.8 million for the same periods a year ago. The increases were due primarily to increases in mortgage origination activity in Hong Kong combined with product expansion.

PMI’sHong Kong reinsurance premiums earned for the quarter and year to date totaled $2.6 million and $8.4 million, respectively, compared to $1.3 and $4.8 million

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for the same periods a year ago. The increase in the third quarter of 2005 was due to increases in mortgage origination activity and product expansion.

Financial Guaranty

Financial Guaranty, which includes equity in earnings from the Company’s investments inFGIC andRAM Re, reportednet income for the quarter and year to date of $12.6 million and $53.0 million, respectively, compared to $15.2 million and $46.2 million for the same periods a year ago.Equity in earnings from FGIC in the third quarter and year to date totaled $13.6 million (pre-tax) and $55.4 million (pre-tax), respectively, compared to $15.4 million (pre-tax) and $46.9 million (pre-tax) in the same periods a year ago. The decrease in equity in earnings from FGIC in the third quarter of 2005 compared to the corresponding period in 2004 was primarily due to an increase in reserves related to Hurricane Katrina. The increase for the first nine months year to date compared to the corresponding period in 2004 was due primarily to increases in premiums earned and higher investment income due to growth in its investment portfolio.

Losses and LAE for FGIC increased for the third quarter and nine months of 2005 compared to the same periods in 2004 due to estimated losses established in the reserve for losses and LAE related to obligations in areas impacted by Hurricane Katrina. The reserve for losses and LAE was $52.2 million at September 30, 2005 compared to $39.2 million at December 31, 2004 and $41.5 million at September 30, 2004.

Equity in earnings from RAM Re for the quarter and year to date were $0.1 million (pre-tax) and $2.9 million (pre-tax), respectively, compared to $1.7 million (pre-tax) and $4.8 million (pre-tax) for the same periods a year ago. The Company reports equity in earnings from RAM Re on a one-quarter lag. The decreases in equity in earnings from RAM Re for the third quarter and first nine months of 2005 compared to the corresponding periods in 2004 were due primarily to the refinement of market value modeling resulting in unrealized losses of certain credit derivatives and increases in operating expenses.

Other

The Other segment consists of revenues and expenses of the holding company, PMI Mortgage Services Co. and SPS Holding Corp. (“SPS”). On October 4, 2005, The PMI

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Group, Inc. completed the sale of all outstanding stock of SPS to Credit Suisse First Boston (USA).

Equity in losses from SPS for the third quarter and nine months ended September 30, 2005 was $2.6 million and $1.7 million respectively, compared to equity in earnings of $0.2 million and $0.6 million for the corresponding periods in 2004. Due to the Company’s decision to enter into a Summary of Terms with CSFB, the Company reclassified its equity investment in SPS to an equity investment held for sale. Beginning January 1, 2005, equity in earnings or losses from SPS is included in other income. The Company recorded $1.8 million after tax of the SPS-related losses in the third quarter and nine months ended September 30, 2005 due to a $6.6 million reserve recorded by SPS related to expected Katrina-related losses on force placed hazard and flood reinsurance.

ABOUT THE PMI GROUP, INC.

The PMI Group, Inc. (NYSE: PMI) headquartered in Walnut Creek, California is an international provider of credit enhancement products that promote homeownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, the Company offers residential mortgage insurance and credit enhancement products domestically and internationally as well as financial guaranty insurance and reinsurance.

The Company is an advocate of affordable housing and supports a number of organizations that foster greater access to affordable housing. The Company’s approach to affordable housing lending is to develop products and services that assist responsible borrowers who may not qualify for mortgage loans under traditional underwriting practices.

Cautionary Statement: Statements in this earnings release that are not historical facts, and that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties that could affect the Company are discussed in our Form 10-K for the year ended December 31, 2004 and include changes in economic conditions such as interest rates, home values, employment rates and refinance activity. We undertake no obligation to update forward-looking statements.

# # #

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THE PMI GROUP, INC. AND SUBSIDIARIES

FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED SEPTEMBER 30, 2005

Contents

Consolidated Statements of Operations and Balance Sheets	Page 2
Business Segments Results of Operations - Three Months Ended September 30, 2005 and 2004	Page 3
Business Segments Results of Operations - Nine Months Ended September 30, 2005 and 2004	Page 4
Business Segments Balance Sheets	Page 5
U.S. Mortgage Insurance Operations Analysis of Reserve for Losses and LAE and Financial and Statistical Information	Page 6
U.S. Mortgage Insurance Operations and CMG Mortgage Insurance Company Financial and Statistical Information	Page 7
PMI Australia and PMI Europe Financial Statistical Information	Page 8
Appendix A - U.S. Mortgage Insurance Operations Supplemental Statistical Information	Page 9
Appendix B - PMI Australia and PMI Europe Quarterly Financial Information	Page 10
Appendix C - Business Segments Results of Operations by Quarter	Page 11

Please refer to the following when noted:

⁽¹⁾ For the quarter and nine months ended September 30, 2005, the Company’s equity in earnings from unconsolidated subsidiaries include FGIC Corporation, CMG Mortgage Insurance Company (“CMG”), RAM Reinsurance Company, Ltd. (“RAM Re”), other limited partnership interests and the trust subsidiary that issued the Company’s preferred securities. As of December 31, 2004, the equity investment in SPS Holding Corp. (“SPS”) was reclassified from investments in unconsolidated subsidiaries to an equity investment held for sale. Effective January 1, 2005, SPS’s equity earnings are reported in other income.

⁽²⁾ The $2.6 million refund relates to the settlement in 2001 of theBaynham class action litigation.

⁽³⁾ The operating results, assets and liabilities of American Pioneer Title Insurance Company (“APTIC”) were reflected as discontinued operations in the fourth quarter of 2003 with prior period financial information reclassified accordingly. The Company completed its sale of APTIC in March 2004 and recorded a gain on sale of discontinued operations of $30.1 million, net of $17.1 million of income tax expense.

⁽⁴⁾ In January 2005, the Company signed a Summary of Terms with Credit Suisse First Boston (USA), Inc. (“CSFB”) pursuant to which CSFB has an option to acquire 100% of the Company’s outstanding stock of SPS. In the fourth quarter of 2004, the Company recorded a write-down of its equity investment in SPS for $20.4 million (pre-tax). The write-down was recorded as a realized loss of discontinued operations of equity investment due to the Company’s decision to sell SPS. According to Statement of Financial Accounting Standards No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets, we are not permitted to present the disposal of equity method investments as discontinued operations.

⁽⁵⁾ U.S. Mortgage Insurance Operations include the operating results of PMI Mortgage Insurance Co. and affiliated U.S. mortgage insurance and reinsurance companies (“PMI”). CMG and its affiliates are included under the equity method of accounting in equity in earnings from unconsolidated subsidiaries.

⁽⁶⁾ International Operations include PMI Australia, PMI Europe and the Company’s Hong Kong branch’s results of operations.

⁽⁷⁾ Financial Guaranty represents our equity investments in FGIC Corporation and RAM Re.

⁽⁸⁾ The “Other” segment includes other income and related operating expenses of PMI Mortgage Services Co.; investment income, interest expense and corporate overhead of The PMI Group, Inc.; the results of Commercial Loans Insurance Co. and WMAC Credit Insurance Corporation; equity in earnings from SPS and certain limited partnerships; and the results from discontinued operations of APTIC.

⁽⁹⁾ The expense ratio is the ratio, expressed as a percentage, of the sum of amortization of deferred policy acquisition costs and other underwriting expenses to net premiums written. The loss ratio is the ratio, expressed as a percentage, of the sum of losses and loss adjustment expenses to premiums earned.

⁽¹⁰⁾ Pool insurance includes modified pool, GSE pool, old pool and all other pool insurance products for U.S. Mortgage Insurance Operations.

⁽¹¹⁾ Statutory risk-to-capital ratio is for PMI Mortgage Insurance Co.

Note:  The interim financial and statistical information contained in this material is unaudited. Certain prior year information has been reclassified to conform to the current periods’ presentation.

THE PMI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005		2004
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)
	(Dollars and shares, except per share data, in thousands)
Net premiums written	$	206,082		$	186,979		$	599,589	$	571,259
Revenues
Premiums earned	$	205,050		$	195,123		$	611,025	$	568,088
Net investment income		44,427			41,955			133,964		125,618
Equity in earnings from unconsolidated subsidiaries(1)		18,520			21,121			72,014		63,804
Net realized investment gains (losses)		(327	)		1,554			1,897		2,896
Other income		3,939			6,418			15,725		25,068
Total revenues		271,609			266,171			834,625		785,474
Losses and expenses
Losses and loss adjustment expenses		61,302			60,838			193,019		177,190
Amortization of deferred policy acquisition costs		17,747			21,228			57,000		65,566
Other underwriting and operating expenses		54,515			46,991			154,575		146,930
Legal settlement refund (2)		—			(2,574	)		—		(2,574	)
Interest expense		8,458			8,637			26,483		25,974
Total losses and expenses		142,022			135,120			431,077		413,086
Income from continuing operations before income taxes	$	129,587		$	131,051		$	403,548	$	372,388
Income taxes from continuing operations		33,876			28,408			102,094		87,508
Income from continuing operations after income taxes	$	95,711		$	102,643		$	301,454	$	284,880
Income from discontinued operations before income taxes(3)		—			—			—		5,756
Income taxes from discontinued operations(3)		—			—			—		1,958
Income from discontinued operations after income taxes (3)		—			—			—		3,798
Gain on sale of discontinued operations, net of income taxes of $17,131 (3)		—			—			—		30,108
Net income	$	95,711		$	102,643		$	301,454	$	318,786
Diluted weighted average common shares outstanding(shares in thousands)		101,007			105,465			102,507		105,373
Diluted net income per share	$	0.97		$	0.99		$	3.00	$	3.08
Reconciliation of earnings per share
Net income	$	95,711		$	102,643		$	301,454	$	318,786
Plus: Interest expense on contingently convertible debt, net of income taxes		1,912			1,912			5,736		5,766
Net income adjusted for diluted earnings per share calculation	$	97,623		$	104,555		$	307,190	$	324,552
Share data:
Basic weighted average common shares outstanding		91,019			95,831			92,577		95,658
Stock options and other dilutive components		1,835			1,481			1,777		1,562
Common stock equivalent shares related to contingently convertible debt		8,153			8,153			8,153		8,153
Diluted weighted average common shares outstanding		101,007			105,465			102,507		105,373
Per share data:
Diluted net income from continuing operations per share	$	0.97		$	0.99		$	3.00	$	2.75
Income from discontinued operations after income taxes		—			—			—		0.04
Gain on sale of discontinued operations, net of income taxes		—			—			—		0.29
Diluted net income per share	$	0.97		$	0.99		$	3.00	$	3.08

CONSOLIDATED BALANCE SHEETS
	September 30, 2005		December 31, 2004		September 30, 2004
	(Unaudited)				(Unaudited)
	(Dollars in thousands, except per share data)
Assets
Cash and investments, at fair value	$	3,638,112	$	3,621,550	$	3,489,568
Investments in unconsolidated subsidiaries(1)		967,735		911,604		1,021,227
Equity investment held for sale(4)		108,469		109,519		—
Related party receivables		7,060		18,439		20,371
Reinsurance receivables, reinsurance recoverables and prepaid premiums		28,493		49,657		45,754
Deferred policy acquisition costs		87,049		92,438		90,023
Other assets		343,241		342,760		364,823
Total assets	$	5,180,159	$	5,145,967	$	5,031,766
Liabilities
Reserve for losses and loss adjustment expenses	$	366,335	$	364,847	$	357,965
Unearned premiums		462,424		484,815		463,786
Long-term debt		819,529		819,529		819,529
Other liabilities		335,520		339,021		336,945
Total liabilities		1,983,808		2,008,212		1,978,225
Shareholders’ equity		3,196,351		3,137,755		3,053,541
Total liabilities and shareholders’ equity	$	5,180,159	$	5,145,967	$	5,031,766
Basic shares issued and outstanding(shares in thousands)		89,550		94,025		95,263
Book value per share	$	35.69	$	33.37	$	32.05

Page 2

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS RESULTS OF OPERATIONS

	U.S. Mortgage Insurance Operations(5)			International Operations (6)			Financial Guaranty (7)		Other(8)			Consolidated Total
	Three Months Ended September 30, 2005 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	158,866		$	47,197		$	—	$	19		$	206,082
Revenues
Premiums earned	$	166,052		$	38,979		$	—	$	19		$	205,050
Net investment income		25,046			14,844			—		4,537			44,427
Equity in earnings (losses) from unconsolidated subsidiaries(1)		5,217			—			13,691		(388	)		18,520
Net realized investment gains (losses)		2,597			(27	)		—		(2,897	)		(327	)
Other income		3			1,287			—		2,649			3,939
Total revenues		198,915			55,083			13,691		3,920			271,609
Losses and expenses
Losses and loss adjustment expenses		61,667			(365	)		—		—			61,302
Amortization of deferred policy acquisition costs		14,478			3,269			—		—			17,747
Other underwriting and operating expenses		25,260			11,648			—		17,607			54,515
Interest expense		3			—			—		8,455			8,458
Total losses and expenses		101,408			14,552			—		26,062			142,022
Income (loss) before income taxes		97,507			40,531			13,691		(22,142	)		129,587
Income tax (benefit)		27,977			12,514			1,135		(7,750	)		33,876
Net income (loss)	$	69,530		$	28,017		$	12,556	$	(14,392	)	$	95,711
Expense ratio(9)		25.0	%		31.6	%
Loss ratio(9)		37.1	%		(0.9	)%
Combined ratio		62.1	%		30.7	%
	Three Months Ended September 30, 2004 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	143,732		$	43,238		$	—	$	9		$	186,979
Revenues
Premiums earned	$	162,276		$	32,829		$	—	$	18		$	195,123
Net investment income		24,332			11,848			—		5,775			41,955
Equity in earnings from unconsolidated subsidiaries(1)		3,707			—			17,061		353			21,121
Net realized investment gains (losses)		1,672			256			—		(374	)		1,554
Other income (loss)		(24	)		296			—		6,146			6,418
Total revenues		191,963			45,229			17,061		11,918			266,171
Losses and expenses
Losses and loss adjustment expenses		60,092			746			—		—			60,838
Amortization of deferred policy acquisition costs		18,003			3,225			—		—			21,228
Other underwriting and operating expenses		23,100			7,346			—		16,545			46,991
Legal settlement refund(2)		(2,574	)		—			—		—			(2,574	)
Interest expense		13			12			—		8,612			8,637
Total losses and expenses		98,634			11,329			—		25,157			135,120
Income (loss) before income taxes		93,329			33,900			17,061		(13,239	)		131,051
Income tax (benefit)		25,528			10,218			1,820		(9,158	)		28,408
Net Income (loss)	$	67,801		$	23,682		$	15,241	$	(4,081	)	$	102,643
Expense ratio(9)		26.8	%		24.4	%
Loss ratio (9)		37.0	%		2.3	%
Combined ratio		63.8	%		26.7	%

Page 3

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS RESULTS OF OPERATIONS

	U.S. Mortgage Insurance Operations(5)			International Operations (6)			Financial Guaranty (7)		Other(8)			Consolidated Total
	Nine Months Ended September 30, 2005 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	465,968		$	133,567		$	—	$	54		$	599,589
Revenues
Premiums earned	$	498,412		$	112,555		$	—	$	58		$	611,025
Net investment income		78,171			42,657			—		13,136			133,964
Equity in earnings (losses) from unconsolidated subsidiaries(1)		14,228			—			58,299		(513	)		72,014
Net realized investment gains (losses)		4,184			296			—		(2,583	)		1,897
Other income		2			2,047			—		13,676			15,725
Total revenues		594,997			157,555			58,299		23,774			834,625
Losses and expenses
Losses and loss adjustment expenses		190,281			2,738			—		—			193,019
Amortization of deferred policy acquisition costs		45,534			11,466			—		—			57,000
Other underwriting and operating expenses		74,092			29,191			—		51,292			154,575
Interest expense		4			—			—		26,479			26,483
Total losses and expenses		309,911			43,395			—		77,771			431,077
Income (loss) before income taxes		285,086			114,160			58,299		(53,997	)		403,548
Income tax (benefit)		79,525			35,746			5,346		(18,523	)		102,094
Net income (loss)	$	205,561		$	78,414		$	52,953	$	(35,474	)	$	301,454
Expense ratio(9)		25.7	%		30.4	%
Loss ratio(9)		38.2	%		2.4	%
Combined ratio		63.9	%		32.8	%
	Nine Months Ended September 30, 2004 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	444,203		$	127,021		$	—	$	35		$	571,259
Revenues
Premiums earned	$	465,692		$	102,343		$	—	$	53		$	568,088
Net investment income		76,734			34,301			—		14,583			125,618
Equity in earnings from unconsolidated subsidiaries(1)		10,710			—			51,688		1,406			63,804
Net realized investment gains (losses)		2,594			858			—		(556	)		2,896
Other income		31			4,298			—		20,739			25,068
Total revenues		555,761			141,800			51,688		36,225			785,474
Losses and expenses
Losses and loss adjustment expenses		174,802			2,388			—		—			177,190
Amortization of deferred policy acquisition costs		55,544			10,022			—		—			65,566
Other underwriting and operating expenses		74,128			21,153			—		51,649			146,930
Legal settlement refund(2)		(2,574	)		—			—		—			(2,574	)
Interest expense		51			73			—		25,850			25,974
Total losses and expenses		301,951			33,636			—		77,499			413,086
Income (loss) from continuing operations before income taxes		253,810			108,164			51,688		(41,274	)		372,388
Income tax (benefit) from continuing operations		69,138			32,488			5,453		(19,571	)		87,508
Income (loss) from continuing operations after income taxes		184,672			75,676			46,235		(21,703	)		284,880
Income from discontinued operations before taxes(3)		—			—			—		5,756			5,756
Income taxes from discontinued operations(3)		—			—			—		1,958			1,958
Income from discontinued operations after income taxes(3)		—			—			—		3,798			3,798
Gain on sale of discontinued operations, net of income taxes(3)		—			—			—		30,108			30,108
Net income	$	184,672		$	75,676		$	46,235	$	12,203		$	318,786
Expense ratio(9)		28.6	%		24.5	%
Loss ratio(9)		37.5	%		2.3	%
Combined ratio		66.1	%		26.9	%

Page 4

THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS BALANCE SHEETS

	U.S. Mortgage Insurance Operations(5)		International Operations (6)		Financial Guaranty (7)		Other(8)			Consolidated Total
	September 30, 2005
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,170,214	$	1,094,028	$	—	$	373,870		$	3,638,112
Investments in unconsolidated subsidiaries (1)		125,376		—		823,287		19,072			967,735
Equity investment held for sale(4)		—		—		—		108,469			108,469
Related party receivables		1,877		—		—		5,183			7,060
Reinsurance receivables, recoverables and prepaid premiums		24,307		4,186		—		—			28,493
Deferred policy acquisition costs		47,480		39,569		—		—			87,049
Other assets		206,092		27,806		—		109,343			343,241
Total assets	$	2,575,346	$	1,165,589	$	823,287	$	615,937		$	5,180,159
Liabilities
Reserve for losses and loss adjustment expenses	$	342,174	$	24,158	$	—	$	3		$	366,335
Unearned premiums		127,481		334,908		—		35			462,424
Long-term debt		—		—		—		819,529			819,529
Other liabilities		234,778		76,994		17,189		6,559			335,520
Total liabilities		704,433		436,060		17,189		826,126			1,983,808
Shareholders’ equity		1,870,913		729,529		806,098		(210,189	)		3,196,351
Total liabilities and shareholders’ equity	$	2,575,346	$	1,165,589	$	823,287	$	615,937		$	5,180,159
	December 31, 2004
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,132,300	$	1,030,751	$	—	$	458,499		$	3,621,550
Investments in unconsolidated subsidiaries (1)		112,456		—		774,880		24,268			911,604
Equity investment held for sale(4)		—		—		—		109,519			109,519
Related party receivables		1,633		—		—		16,806			18,439
Reinsurance receivables, recoverables and prepaid premiums		31,110		18,547		—		—			49,657
Deferred policy acquisition costs		53,998		38,440		—		—			92,438
Other assets		208,806		26,460		—		107,494			342,760
Total assets	$	2,540,303	$	1,114,198	$	774,880	$	716,586		$	5,145,967
Liabilities
Reserve for losses and loss adjustment expenses	$	338,620	$	26,224	$	—	$	3		$	364,847
Unearned premiums		152,685		332,091		—		39			484,815
Long-term debt		—		—		—		819,529			819,529
Other liabilities		237,431		71,740		12,424		17,426			339,021
Total liabilities		728,736		430,055		12,424		836,997			2,008,212
Shareholders’ equity		1,811,567		684,143		762,456		(120,411	)		3,137,755
Total liabilities and shareholders’ equity	$	2,540,303	$	1,114,198	$	774,880	$	716,586		$	5,145,967
	September 30, 2004
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,086,519	$	912,938	$	—	$	490,111		$	3,489,568
Investments in unconsolidated subsidiaries(1)		108,190		—		756,226		156,811			1,021,227
Related party receivables		1,170		—		—		19,201			20,371
Reinsurance receivables, recoverables and prepaid premiums		29,928		15,826		—		—			45,754
Deferred policy acquisition costs		55,856		34,167		—		—			90,023
Other assets		204,098		32,733		—		127,992			364,823
Total assets	$	2,485,761	$	995,664	$	756,226	$	794,115		$	5,031,766
Liabilities
Reserve for losses and loss adjustment expenses	$	334,749	$	23,213	$	—	$	3		$	357,965
Unearned premiums		162,312		301,445		—		29			463,786
Long-term debt		—		—		—		819,529			819,529
Other liabilities		154,211		62,280		10,928		109,526			336,945
Total liabilities		651,272		386,938		10,928		929,087			1,978,225
Shareholders’ equity		1,834,489		608,726		745,298		(134,972	)		3,053,541
Total liabilities and shareholders’ equity	$	2,485,761	$	995,664	$	756,226	$	794,115		$	5,031,766

Page 5

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS⁽⁵⁾ ANALYSIS OF RESERVE FOR LOSSES AND LAE

	September 30, 2005			June 30, 2005			September 30, 2004
	Loans in Default	Reserve for Losses and LAE		Loans in Default	Reserve for Losses and LAE		Loans in Default	Reserve for Losses and LAE
	(Dollars in thousands)
Primary insurance	38,146	$	302,925	35,030	$	299,379	37,111	$	301,844
Pool insurance	19,037		39,249	16,623		39,249	16,890		32,905
Total	57,183	$	342,174	51,653	$	338,628	54,001	$	334,749

Reconciliation of Reserve for Losses and LAE
	September 30, 2005			June 30, 2005			Reserve Change
	(Dollars in thousands)
Gross reserve for losses and LAE:
Primary insurance	$	302,925		$	299,379		$	3,546
Pool insurance		39,249			39,249			—
Total gross reserve for losses and LAE		342,174			338,628			3,546
Ceded reserve for losses:
Primary insurance		(2,595	)		(2,299	)		(296	)
Pool insurance		(89	)		(89	)		—
Total ceded reserve for losses		(2,684	)		(2,388	)		(296	)
Net reserve for losses and LAE	$	339,490		$	336,240		$	3,250

U.S. MORTGAGE INSURANCE OPERATIONS⁽⁵⁾ FINANCIAL AND STATISTICAL INFORMATION

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Flow insurance written(in millions)	$	7,824		$	9,135		$	21,568		$	27,999
Bulk insurance written(in millions)		908			1,354			4,989			2,696
Primary new insurance written(in millions)	$	8,732		$	10,489		$	26,557		$	30,695
Primary new risk written(in millions)	$	2,224		$	2,782		$	6,844		$	7,938
Pool new insurance written(in millions)(10)	$	5,159		$	958		$	9,693		$	7,411
Pool new risk written(in millions)(10)	$	124		$	29		$	225		$	168
Product mix as a % of new insurance written:
Above 97% LTV’s		13	%		12	%		13	%		10	%
90.01% to 95% LTV’s		24	%		30	%		24	%		31	%
85.01% to 90% LTV’s		48	%		36	%		43	%		38	%
90.01% to 95% LTV’s with >= 30% coverage		19	%		26	%		20	%		26	%
85.01% to 90% LTV’s with >= 25% coverage		41	%		31	%		37	%		32	%
ARMs		27	%		29	%		32	%		22	%
Monthlies		97	%		98	%		97	%		98	%
Refinances		34	%		28	%		35	%		32	%
Bulk transactions		10	%		13	%		19	%		9	%
Premiums written(in thousands):
Gross premiums written	$	203,797		$	187,859		$	602,776		$	569,446
Ceded premiums, net of assumed premiums		(41,585	)		(40,651	)		(126,327	)		(114,661	)
Refunded premiums		(3,346	)		(3,476	)		(10,481	)		(10,582	)
Net premiums written		158,866			143,732			465,968			444,203
Change in unearned premiums		7,186			18,544			32,444			21,489
Net premiums earned	$	166,052		$	162,276		$	498,412		$	465,692

Page 6

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS⁽⁵⁾ FINANCIAL AND STATISTICAL INFORMATION

	September 30, 2005			June 30, 2005			September 30, 2004
Primary insurance in force(in millions)	$	101,221		$	103,434		$	104,782
Primary risk in force(in millions)	$	25,148		$	25,592		$	25,259
Pool risk in force (in millions)(10)	$	2,530		$	2,445		$	2,389
Risk-to-capital ratio(11)		8.1 to 1			8.4 to 1			8.6 to 1
Insured primary loans		754,934			776,721			805,859
Persistency		61.2	%		62.0	%		59.5	%
Primary loans in default		38,146			35,030			37,111
Primary default rate		5.05	%		4.51	%		4.61	%
Bulk transactions only default rate		10.09	%		8.54	%		8.97	%
Pool default rate		6.34	%		5.65	%		4.97	%
Primary claims paid(year-to-date in thousands)	$	163,438		$	113,180		$	145,434
Number of primary claims paid(year-to-date)		7,124			4,934			6,354
Average primary claim size(year-to-date in thousands)	$	22.9		$	22.9		$	22.9
Percentage of flow NIW subject to captive reinsurance arrangements(year-to-date)		68.0	%		65.7	%		61.5	%
Percentage of primary NIW subject to captive reinsurance arrangements(year-to-date)		55.7	%		50.7	%		56.1	%
Percentage of primary IIF subject to captive reinsurance arrangements(year-to-date)		53.2	%		52.1	%		51.2	%
Percentage of primary RIF subject to captive reinsurance arrangements(year-to-date)		53.9	%		52.9	%		52.5	%
CMG MORTGAGE INSURANCE COMPANY FINANCIAL AND STATISTICAL INFORMATION
	September 30, 2005			June 30, 2005			September 30, 2004
Primary new insurance written(year-to-date in millions)	$	4,234		$	2,495		$	4,074
Primary insurance in force(in millions)	$	15,358		$	14,694		$	14,018
Primary risk in force(in millions)	$	3,607		$	3,428		$	3,176
Insured primary loans		111,217			108,066			105,390
Persistency		70.2	%		70.3	%		70.3	%
Primary loans in default		632			622			625
Primary default rate(year-to-date)		0.57	%		0.58	%		0.59	%
Primary claims paid(year-to-date in thousands)	$	3,152		$	1,981		$	3,751
Number of primary claims paid(year-to-date)		149			100			174
Average primary claim size (year-to-date in thousands)	$	21.2		$	19.8		$	21.6

Page 7

THE PMI GROUP, INC. AND SUBSIDIARIES

PMI AUSTRALIA FINANCIAL AND STATISTICAL INFORMATION

	September 30, 2005			June 30, 2005			September 30, 2004
Net premiums written(year-to-date in thousands)	$	112,320		$	71,775		$	112,801
Premiums earned(year-to-date in thousands)	$	91,096		$	59,319		$	81,937
Flow insurance written(year-to-date in millions)	$	13,648		$	8,685		$	14,960
RMBS insurance written(year-to-date in millions)		9,484			6,478			11,916
New insurance written(year-to-date in millions)	$	23,132		$	15,163		$	26,876
Insurance in force(in millions)	$	124,014		$	119,811		$	102,527
Risk in force(in millions)	$	113,028		$	109,025		$	92,979
Policies in force		994,330			973,820			916,070
Loans in default		1,329			1,322			1,101
Default rate		0.13	%		0.14	%		0.12	%
Claims paid(year-to-date in thousands)	$	1,807		$	1,090		$	723
Number of claims paid(year-to-date)		56			42			45
Average claim size(year-to-date in thousands)	$	32.3		$	26.0		$	16.1
PMI EUROPE FINANCIAL AND STATISTICAL INFORMATION
	September 30, 2005			June 30, 2005			September 30, 2004
Net premiums written(year-to-date in thousands)	$	5,444		$	3,027		$	7,426
Premiums earned(year-to-date in thousands)	$	13,083		$	8,507		$	15,575
New credit default swaps written(year-to-date in millions)	$	514		$	—		$	2,603
New reinsurance written(year-to-date in millions)	$	2,992		$	—		$	—
Insurance in force(in millions)	$	34,501		$	31,213		$	32,950
Risk in force(in millions)	$	2,894		$	2,450		$	3,244
Claims paid including credit default swaps(year-to-date in thousands)	$	1,685		$	1,379		$	899

Page 8

THE PMI GROUP, INC. AND SUBSIDIARIES

APPENDIX A - U.S. MORTGAGE INSURANCE OPERATIONS⁽⁵⁾ SUPPLEMENTAL STATISTICAL INFORMATION

		9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
Primary insurance in force(in millions)
Flow		$	88,433		$	89,965		$	91,399		$	93,263		$	93,601
Bulk			12,788			13,469			12,598			12,058			11,181
Total		$	101,221		$	103,434		$	103,997		$	105,321		$	104,782
Primary risk in force(in millions)
Flow		$	21,981		$	22,296		$	22,541		$	22,885		$	22,741
Bulk			3,167			3,296			2,966			2,773			2,518
Total		$	25,148		$	25,592		$	25,507		$	25,658		$	25,259
Primary policies in force			754,934			776,721			788,847			803,236			805,859
Primary risk in force - credit score distribution
Flow	619-575		5.7	%		5.9	%		6.1	%		6.2	%		6.4	%
	574 or below		1.6	%		1.7	%		1.7	%		1.8	%		1.9	%
Bulk	619-575		16.0	%		17.4	%		20.2	%		21.1	%		21.6	%
	574 or below		10.1	%		10.9	%		12.9	%		13.0	%		12.7	%
Total	619-575		7.0	%		7.4	%		7.7	%		7.8	%		7.9	%
	574 or below		2.7	%		2.9	%		3.0	%		3.0	%		3.0	%
Primary average loan size(in thousands)
Flow		$	133.3		$	132.2		$	131.5		$	131.3		$	130.5
Bulk		$	139.5		$	139.8		$	134.1		$	129.8		$	127.1
Total		$	134.1		$	133.2		$	131.8		$	131.1		$	130.1
Loss severity - primary(quarterly)
Flow			84.0	%		83.8	%		85.6	%		84.9	%		77.4	%
Bulk			89.6	%		87.7	%		90.9	%		84.6	%		78.8	%
Total			85.2	%		84.6	%		86.8	%		84.8	%		77.8	%
Alt-A primary insurance in force(in millions)
With FICO scores of 660 and above		$	12,548		$	11,800		$	10,892		$	10,250		$	9,421
With FICO scores below 660 and above 619			2,329			2,326			2,136			2,029			1,836
Total Alt-A primary insurance in force		$	14,877		$	14,126		$	13,028		$	12,279		$	11,257
NEW INSURANCE WRITTEN AND INSURANCE IN FORCE ANALYSIS
		9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
FICO > 700 and LTV > 80(in millions)
Primary new insurance written(year-to-date)		$	10,993		$	6,981		$	3,049		$	16,643		$	12,788
Primary insurance in force		$	42,419		$	42,829		$	42,974		$	43,801		$	43,862
Total portfolio(in millions)
Primary new insurance written(year-to-date)		$	26,557		$	17,826		$	8,168		$	41,213		$	30,695
Primary insurance in force		$	101,221		$	103,434		$	103,997		$	105,321		$	104,782
FICO > 700 and LTV > 80 as a percentage of total portfolio
Primary new insurance written(year-to-date)			41.4	%		39.2	%		37.3	%		40.4	%		41.7	%
Primary insurance in force			41.9	%		41.4	%		41.3	%		41.6	%		41.9	%

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THE PMI GROUP, INC. AND SUBSIDIARIES

APPENDIX B - PMI AUSTRALIA AND PMI EUROPE QUARTERLY FINANCIAL INFORMATION

PMI AUSTRALIA

	9/30/05			6/30/05			3/31/05			12/31/04			9/30/04			6/30/04			3/31/04		12/31/03
	(Australian $ in thousands, unless otherwise noted)
Income Statement Components - Quarter Ended
Premiums earned	$	41,815		$	38,929		$	37,840		$	35,819		$	37,109		$	37,308		$	37,790	$	36,766
Net investment income	$	15,854		$	14,966		$	14,705		$	14,087		$	13,098		$	12,677		$	12,139	$	9,235
Change in fair value of foreign currency put options	$	(232	)	$	(422	)	$	(1,338	)	$	(228	)	$	(1,890	)	$	1,311		$	—	$	—
Total expenses	$	13,632		$	15,104		$	13,788		$	13,624		$	13,413		$	12,799		$	12,030	$	12,160
Net income	$	31,079		$	26,725		$	26,487		$	25,447		$	24,725		$	26,832		$	26,518	$	21,441
Net income(US$ in thousands)	$	23,623		$	20,541		$	20,584		$	19,272		$	17,554		$	19,219		$	20,265	$	15,511
Balance Sheet Components
Assets
Cash and investments, at fair value	$	1,147,390		$	1,090,399		$	1,037,704		$	1,027,236		$	973,479		$	924,330		$	892,864	$	853,920
Total assets	$	1,225,683		$	1,188,574		$	1,132,961		$	1,116,874		$	1,068,080		$	1,013,102		$	976,723	$	935,904
Liabilities and Shareholders’ Equity
Loss reserves	$	11,156		$	12,541		$	12,549		$	12,547		$	13,692		$	13,556		$	13,537	$	13,536
Unearned premiums	$	406,661		$	395,113		$	382,781		$	378,981		$	364,120		$	346,748		$	330,477	$	321,441
Shareholders’ equity	$	757,372		$	730,113		$	689,927		$	673,124		$	642,585		$	607,781		$	586,842	$	556,329
PMI EUROPE
	9/30/05			6/30/05			3/31/05			12/31/04			9/30/04			6/30/04			3/31/04		12/31/03
	(Euro € in thousands, unless otherwise noted)
Income Statement Components - Quarter Ended
Premiums earned	€	3,749		€	3,298		€	3,321		€	4,140		€	4,233		€	4,172		€	4,295	€	7,765
Net investment income	€	2,188		€	1,951		€	2,002		€	1,435		€	2,294		€	1,642		€	2,198	€	1,199
Change in fair value of foreign currency put options	€	(3	)	€	342		€	(33	)	€	(6	)	€	(96	)	€	(18	)	€	—	€	—
Total expenses	€	3,244		€	3,168		€	2,031		€	3,679		€	1,476		€	1,462		€	1,768	€	1,723
Net income	€	2,276		€	1,828		€	2,326		€	2,703		€	3,942		€	3,535		€	3,781	€	5,955
Net income(US$ in thousands)	$	2,774		$	2,330		$	3,049		$	3,489		$	4,822		$	4,260		$	4,726	$	7,089
Balance Sheet Components
Assets
Cash and investments, at fair value	€	182,682		€	179,698		€	172,707		€	169,165		€	164,558		€	161,129		€	162,621	€	154,369
Total assets	€	192,431		€	188,840		€	182,857		€	179,134		€	175,731		€	172,402		€	170,600	€	160,891
Liabilities and Shareholders’ Equity
Loss reserves	€	13,019		€	13,395		€	12,807		€	12,126		€	10,656		€	10,497		€	10,031	€	9,624
Unearned premiums	€	20,808		€	22,589		€	24,719		€	26,859		€	29,363		€	31,748		€	33,903	€	36,029
Shareholders’ equity	€	133,352		€	131,452		€	125,395		€	121,494		€	117,142		€	111,691		€	109,386	€	100,524

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THE PMI GROUP, INC. AND SUBSIDIARIES

APPENDIX C - BUSINESS SEGMENTS RESULTS OF OPERATIONS BY QUARTER

	2005									2004
	3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
	(Dollars in thousands)
U.S. Mortgage Insurance Operations (5)
Net premiums written	$	158,866		$	152,564		$	154,538		$	153,916		$	143,732		$	147,407		$	153,064
Revenues
Premiums earned	$	166,052		$	168,248		$	164,112		$	168,313		$	162,276		$	154,392		$	149,023
Net investment income		25,046			27,546			25,579			25,496			24,332			27,944			24,458
Equity in earnings from unconsolidated subsidiaries(1)		5,217			4,937			4,074			4,569			3,707			3,676			3,328
Net realized investment gains (losses)		2,597			1,167			420			(12	)		1,672			(166	)		1,087
Other income (loss)		3			(5	)		4			15			(24	)		(25	)		81
Total revenues		198,915			201,893			194,189			198,381			191,963			185,821			177,977
Losses and expenses
Losses and loss adjustment expenses		61,667			65,496			63,118			58,355			60,092			55,755			58,956
Amortization of deferred policy acquisition costs		14,478			15,030			16,026			16,585			18,003			18,109			19,433
Other underwriting and operating expenses		25,260			25,278			23,554			27,258			23,100			24,888			26,137
Legal settlement refund(2)		—			—			—			—			(2,574	)		—			—
Interest expense		3			—			1			12			13			17			21
Total losses and expenses		101,408			105,804			102,699			102,210			98,634			98,769			104,547
Income before income taxes		97,507			96,089			91,490			96,171			93,329			87,052			73,430
Income taxes		27,977			26,400			25,149			26,328			25,528			23,790			19,822
Net income	$	69,530		$	69,689		$	66,341		$	69,843		$	67,801		$	63,262		$	53,608
International Operations(6)
Net premiums written	$	47,197		$	47,185		$	39,185		$	46,156		$	43,238		$	43,460		$	40,323
Revenues
Premiums earned	$	38,979		$	38,141		$	35,435		$	33,979		$	32,829		$	33,255		$	36,259
Net investment income		14,844			14,058			13,756			12,789			11,848			10,646			11,807
Net realized investment gains (losses)		(27	)		(18	)		340			(263	)		256			377			225
Other income (loss)		1,287			873			(113	)		3,044			296			2,399			1,602
Total revenues		55,083			53,054			49,418			49,549			45,229			46,677			49,893
Losses and expenses
Losses and loss adjustment expenses		(365	)		1,739			1,363			1,737			746			777			864
Amortization of deferred policy acquisition costs		3,269			3,779			4,417			3,065			3,225			3,135			3,662
Other underwriting and operating expenses		11,648			10,539			7,005			10,235			7,346			6,940			6,867
Interest expense		—			—			—			—			12			60			1
Total losses and expenses		14,552			16,057			12,785			15,037			11,329			10,912			11,394
Income before income taxes		40,531			36,997			36,633			34,512			33,900			35,765			38,499
Income taxes		12,514			11,747			11,485			10,274			10,218			10,799			11,470
Net income	$	28,017		$	25,250		$	25,148		$	24,238		$	23,682		$	24,966		$	27,029
Financial Guaranty(7)
Equity in earnings from unconsolidated subsidiaries(1)	$	13,691		$	23,761		$	20,846		$	16,156		$	17,061		$	19,699		$	14,928
Income taxes		1,135			2,254			1,956			1,689			1,820			2,220			1,413
Net income	$	12,556		$	21,507		$	18,890		$	14,467		$	15,241		$	17,479		$	13,515
Other(8)
Net premiums written	$	19		$	13		$	23		$	31		$	9		$	9		$	17
Revenues
Premiums earned	$	19		$	19		$	20		$	20		$	18		$	16		$	20
Net investment income		4,537			4,143			4,455			4,706			5,775			5,032			3,776
Equity in earnings (losses) from unconsolidated subsidiaries(1)		(388	)		(416	)		292			(975	)		353			210			842
Net realized investment gains (losses)		(2,897	)		354			(39	)		—			(374	)		(143	)		(37	)
Realized loss from discontinued operations of equity investment(4)		—			—			—			(20,420	)		—			—			—
Other income		2,649			5,383			5,644			5,345			6,146			7,424			7,168
Total revenues		3,920			9,483			10,372			(11,324	)		11,918			12,539			11,769
Losses and expenses
Other underwriting and operating expenses		17,607			18,600			15,086			20,272			16,545			17,790			17,316
Interest expense		8,455			8,472			9,552			8,640			8,612			8,745			8,493
Total losses and expenses		26,062			27,072			24,638			28,912			25,157			26,535			25,809
Loss from continuing operations before income tax benefit		(22,142	)		(17,589	)		(14,266	)		(40,236	)		(13,239	)		(13,996	)		(14,040	)
Income tax benefit from continuing operations		(7,750	)		(5,728	)		(5,045	)		(13,339	)		(9,158	)		(4,964	)		(5,451	)
Loss from continuing operations after income tax benefit		(14,392	)		(11,861	)		(9,221	)		(26,897	)		(4,081	)		(9,032	)		(8,589	)
Income from discontinued operations before income taxes(3)		—			—			—			—			—			—			5,756
Income taxes from discontinued operations(3)		—			—			—			—			—			—			1,958
Income from discontinued operations after income taxes(3)		—			—			—			—			—			—			3,798
Gain on sale of discontinued operations, net of income taxes(3)		—			—			—			(1,105	)		—			—			30,108
Net income (loss)	$	(14,392	)	$	(11,861	)	$	(9,221	)	$	(28,002	)	$	(4,081	)	$	(9,032	)	$	25,317

Page 11