Pmi (PMI) 8-K The Pmi Group, Inc. Reports First Quarter 2006 Net

Exhibit 99.1

News Release   Investors and Media Contacts: Bill Horning / Beth Haiken 925.658.6193 / 925.658.6192

THE PMI GROUP, INC. REPORTS FIRST QUARTER 2006 NET

INCOME OF $105.3 MILLION, OR $1.09 PER DILUTED SHARE

Walnut Creek, CA, May 4, 2006—The PMI Group, Inc. (NYSE: PMI) (the “Company”) today reported net income of $105.3 million for the first quarter of 2006 compared to net income of $101.2 million for the first quarter of 2005. Net income per diluted share was $1.09 for the first quarter of 2006 compared to $1.00 for the first quarter of 2005, representing a 9.0% increase.

Results for the first quarter of 2006 include a pre-tax charge of $2.0 million ($1.3 million after tax), or $0.01 per diluted share, for the reduction and restructuring of field offices in U.S. Mortgage Insurance Operations.¹ The Company also incurred pre-tax expenses of $5.0 million ($3.7 million after tax) or $0.04 per diluted share, for stock option expenses and related stock based compensation for the adoption of accounting for share-based payment.

Segment highlights in the first quarter of 2006 include: U.S. Mortgage Insurance Operations—growth in net premiums written and a decline in primary loans in default and claims paid; International Operations²—net income growth of 13.9%; and Financial Guaranty³—net income growth of 11.6%.

Consolidated Operating Results

Consolidated net premiums written for the first quarter 2006 totaled $201.9 million compared to $193.7 million for the same period a year ago. The increase was due primarily to an increase in average premium rates and average insured loan balances in U.S. Mortgage Insurance Operations and increased new insurance written in PMI Australia.

Consolidated premiums earned for the first quarter of 2006 were $206.2 million compared to $199.6 million for the same period a year ago. The increase was due to higher average premium rates, increased premiums from modified pool products in the U.S. Mortgage Insurance Operations and higher premiums earned as a result of higher new insurance written and higher insurance in force in PMI Australia.

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

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

3 “Financial Guaranty” includes the results of the Financial Guaranty Insurance Company, Inc. (FGIC) with which The PMI Group, Inc. has an equity ownership interest of 42.0% and results from the RAM Reinsurance Group of Companies (RAM Re).

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Consolidated other underwriting and operating expensesfor the first quarter 2006 totaled $53.5 million compared to $45.6 million for the first quarter of 2005 primarily due to an increase in compensation expenses in U.S. Mortgage Insurance and Holding Company Operations and increased expenses in International Operations including profit sharing commissions for the Royal & Sun Alliance portfolio in PMI Europe.

Consolidated losses and loss adjustment expenses for the first quarter declined to $60.9 million compared to $64.5 million in the first quarter of 2005. The decrease was primarily a result of a decrease in the number of primary claims paid, partially offset by a higher average primary claim size in the first quarter of 2006 compared to the first quarter of 2005.

Adoption of SFAS 123R, “Accounting for Share-Based Payment”, resulted in a $3.7 million after tax charge for stock options and related stock based compensation expenses in our Other Segment for the first quarter of 2006.

Consolidated reserve for losses and loss adjustment expenses totaled $369.9 million as of March 31, 2006 compared to $368.8 million as of December 31, 2005 and $364.8 million as of March 31, 2005. The increase for the first quarter of 2006 was primarily due to portfolio seasoning and higher expected primary claim rates on reported delinquencies in the U.S. Mortgage Insurance portfolio.

The PMI Group, Inc. First Quarter Results by Segment

	First Quarter Total Revenues						First Quarter Net Income
	2006		2005		% Change		2006			2005			% Change
	(Dollars in millions, except per share data)
U.S. Mortgage Insurance Operations	$	197.9	$	194.2	1.9	%	$	70.1		$	66.3		5.7	%
International Operations		56.6		49.4	14.6	%		28.6			25.1		13.9	%
Financial Guaranty		23.2		20.8	11.5	%		21.1			18.9		11.6	%
Other4		10.1		10.4	n.m.			(14.5	)		(9.1	)	n.m.
Total	$	287.8	$	274.8	4.7	%	$	105.3		$	101.2		4.1	%
Diluted Net Income Per Share							$	1.09		$	1.00		9.0	%
Book Value Per Share							$	37.24		$	33.93		9.8	%

May not total due to rounding.

n.m. – Not meaningful

Segment Highlights

U.S. Mortgage Insurance Operations

• U.S. Mortgage Insurance Operations realized a 5.8% increase in net premiums written for the first quarter of 2006 which grew to $163.5 million as compared to $154.5 million for the first quarter of 2005. The increase was due primarily to an increase in PMI’s average premium rates and average insured loan balances in the first quarter of 2006.

• U.S. Mortgage Insurance Operations total incurred losses for the first quarter 2006 decreased 6.3% to $59.1 million from $63.1 million in the first quarter of 2005 driven primarily by lower paid claims.

4 The “Other” segment primarily consists of the holding company, contract underwriting operations and Select Portfolio Servicing, Inc. (SPS) prior to its disposition on October 4, 2005.

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• U.S. Mortgage Insurance Operations closed four field offices in the first quarter of 2006 and incurred a pre-tax restructuring charge of $2.0 million related to facility transition expenses and employee salary and severance costs.

• Equity in earnings from CMG for the first quarter 2006 increased 9.8% to $4.5 million compared to $4.1 million pre-tax for the first quarter 2005.

International Operations

• PMI Australia reported net income of $24.1 million for the first quarter of 2006, a 17% increase over net income for the first quarter 2005 of $20.6 million. The increase in net income was due primarily to an increase in premiums earned and unrealized gains on foreign currency put options, partially offset by the weakening of the Australian dollar and an increase in losses and LAE. In functional currency, PMI Australia’s net income increased by 23% from AUD $32.5 million in the first quarter of 2006 to AUD $26.5 million in the first quarter of 2005.

• PMI Europe reported net income for the quarter of $2.9 million compared to $3.0 million for the same period a year ago. The decrease in the first quarter was due principally to foreign currency exchange fluctuations. In functional currency, net income from PMI Europe for the first quarter of 2006 was €2.5 million compared to €2.3 million for the same period a year ago.

• PMI’s Hong Kong net income for the first quarter 2006 totaled $1.6 million compared to $1.5 million for the same period a year ago.

Financial Guaranty

• Equity in earnings from FGIC grew for the first quarter of 2006 to $20.3 million (after tax) compared to $18.1 million (after tax) for the same period a year ago. The increase was due to increases in premiums earned and higher investment income.

• Equity in earnings from RAM Re for the first quarter were $1.2 million (pre-tax) compared to $1.2 million (pre-tax) for the same period a year ago. On April 27^th, RAM Re successfully completed its initial public offering. As a result, the Company currently retains a 23.7% strategic ownership interest in RAM Re.

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, 2005 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 (the "Company")

FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED MARCH 31, 2006

Contents

Consolidated Statements of Operations and Balance Sheets	Page 2
Business Segments Results of Operations - Three Months Ended March 31, 2006 and 2005	Page 3
Business Segments Balance Sheets	Page 4
U.S. Mortgage Insurance Operations Analysis of Reserve for Losses and LAE and Financial and Statistical Information	Page 5
U.S. Mortgage Insurance Operations Financial and Statistical Information	Page 6
CMG Mortgage Insurance Company, PMI Australia and PMI Europe Financial and Statistical Information	Page 7
Appendix A - PMI Australia and PMI Europe Quarterly Financial Information	Page 8
Appendix B - Business Segments Results of Operations by Quarter	Page 9

Please refer to the following when noted:

(1) For quarter ended March 31, 2006, 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. On October 4, 2005, PMI sold to Credit Suisse First Boston (USA), Inc. (“CSFB”) its equity ownership interest in SPS.

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

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

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

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

(6) U.S. Mortgage Insurance Operations include a $1.3 million charge (after tax), or $0.01 per diluted share, for the reduction and restructuring of field offices.

(7) The “Other” segment includes a $3.7 million charge (after tax) for stock option expense and related stock based compensation expense in the first quarter of 2006.

(8) The expense ratio is the ratio, expressed as a percentage, of the sum of amortization of deferred policy acquisition costs and other underwriting and operating 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.

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

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

(11) Effective January 1, 2006, we refined our method of operating cost allocation between our U.S. Mortgage Insurance Operations segment and our Other segment. As a result of this refinement, we allocated approximately $1.5 million of expenses in the first quarter of 2006 to our Other segment which previously would have been allocated to our U.S. Mortgage Insurance Operations segment.

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 March 31,
	2006			2005
	(Unaudited)			(Unaudited)
	(Dollars and shares, except per share data, in thousands)
Net premiums written	$	201,904		$	193,746
Revenues
Premiums earned	$	206,241	��	$	199,567
Net investment income		46,867			43,790
Equity in earnings from unconsolidated subsidiaries(1)		27,625			25,212
Net realized investment gains		340			721
Other income		6,785			5,535
Total revenues		287,858			274,825
Losses and expenses
Losses and loss adjustment expenses		60,939			64,481
Amortization of deferred policy acquisition costs		16,987			20,443
Other underwriting expenses and operating expenses(11)		53,543			45,645
Field office restructuring(6)		1,955			—
Compensation expense related to stock options and employee stock purchase plan(7)		5,022			—
Interest expense		8,179			9,553
Total losses and expenses		146,625			140,122
Income before income taxes		141,233			134,703
Income taxes		35,885			33,545
Net income	$	105,348		$	101,158
Diluted net income per share	$	1.09		$	1.00
Reconciliation of earnings per share
Net income	$	105,348		$	101,158
Plus: Interest expense on contingently convertible debt, net of income taxes		1,912			1,912
Net income adjusted for diluted earnings per share calculation	$	107,260		$	103,070
Share data:
Basic weighted average common shares outstanding		89,036			93,907
Stock options and other dilutive components		1,413			1,402
Common stock equivalent shares related to contingently convertible debt		8,153			8,153
Diluted weighted average common shares outstanding		98,602			103,462
Share repurchase data:
Common shares repurchased		81			832
Average price paid per common share repurchased (including commissions)	$	43.01		$	40.04

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CONSOLIDATED BALANCE SHEETS

	March 31, 2006		December 31, 2005		March 31, 2005
	(Unaudited)				(Unaudited)
	(Dollars and shares in thousands, except per share data)
Assets
Cash and investments, at fair value	$	3,876,953	$	3,789,432	$	3,644,481
Investments in unconsolidated subsidiaries(1)		1,002,707		984,925		919,869
Equity investment held for sale(1)		—		—		110,373
Related party receivables		2,779		2,864		13,764
Reinsurance receivables, reinsurance recoverables and prepaid premiums		20,225		30,338		43,915
Deferred policy acquisition costs		84,173		86,170		89,578
Other assets		360,673		360,407		339,690
Total assets	$	5,347,510	$	5,254,136	$	5,161,670
Liabilities
Reserve for losses and loss adjustment expenses	$	369,914	$	368,841	$	364,782
Unearned premiums		480,460		490,899		474,761
Long-term debt		819,529		819,529		819,529
Other liabilities		350,349		344,077		330,427
Total liabilities		2,020,252		2,023,346		1,989,499
Shareholders’ equity		3,327,258		3,230,790		3,172,171
Total liabilities and shareholders’ equity	$	5,347,510	$	5,254,136	$	5,161,670
Basic shares issued and outstanding		89,354		88,713		93,492
Book value per share	$	37.24	$	36.42	$	33.93

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THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS RESULTS OF OPERATIONS

	U.S. Mortgage Insurance Operations(2)			International Operations (3)			Financial Guaranty (4)		Other(5)			Consolidated Total
	Three Months Ended March 31, 2006 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	163,474		$	38,420		$	—	$	10		$	201,904
Revenues
Premiums earned	$	167,538		$	38,686		$	—	$	17		$	206,241
Net investment income		25,676			14,785			—		6,406			46,867
Equity in earnings (losses) from unconsolidated subsidiaries(1)		4,492			—			23,235		(102	)		27,625
Net realized investment gains (losses)		237			142			—		(39	)		340
Other income (loss)		(23	)		3,031			—		3,777			6,785
Total revenues		197,920			56,644			23,235		10,059			287,858
Losses and expenses
Losses and loss adjustment expenses		59,147			1,792			—		—			60,939
Amortization of deferred policy acquisition costs		13,442			3,545			—		—			16,987
Other underwriting expenses and operating expenses(11)		25,911			9,789			—		17,843			53,543
Field office restructuring(6)		1,955			—			—		—			1,955
Compensation expense related to stock options and employee stock purchase plan(7)		—			—			—		5,022			5,022
Interest expense		—			—			—		8,179			8,179
Total losses and expenses		100,455			15,126			—		31,044			146,625
Income (loss) before income taxes		97,465			41,518			23,235		(20,985	)		141,233
Income tax (benefit)		27,360			12,909			2,137		(6,521	)		35,885
Net income (loss)	$	70,105		$	28,609		$	21,098	$	(14,464	)	$	105,348
Expense ratio(8)		25.3	%		34.7	%
Loss ratio(8)		35.3	%		4.6	%
Combined ratio		60.6	%		39.3	%
	Three Months Ended March 31, 2005 (Unaudited)
	(Dollars in thousands)
Net premiums written	$	154,538		$	39,185		$	—	$	23		$	193,746
Revenues
Premiums earned	$	164,112		$	35,435		$	—	$	20		$	199,567
Net investment income		25,579			13,756			—		4,455			43,790
Equity in earnings from unconsolidated subsidiaries(1)		4,074			—			20,846		292			25,212
Net realized investment gains (losses)		420			340			—		(39	)		721
Other income (loss)		4			(113	)		—		5,644			5,535
Total revenues		194,189			49,418			20,846		10,372			274,825
Losses and expenses
Losses and loss adjustment expenses		63,118			1,363			—		—			64,481
Amortization of deferred policy acquisition costs		16,026			4,417			—		—			20,443
Other underwriting and operating expenses		23,553			7,006			—		15,086			45,645
Interest expense		1			—			—		9,552			9,553
Total losses and expenses		102,698			12,786			—		24,638			140,122
Income (loss) before income taxes		91,491			36,632			20,846		(14,266	)		134,703
Income tax (benefit)		25,149			11,485			1,956		(5,045	)		33,545
Net income (loss)	$	66,342		$	25,147		$	18,890	$	(9,221	)	$	101,158
Expense ratio(8)		25.6	%		29.1	%
Loss ratio(8)		38.5	%		3.8	%
Combined ratio		64.1	%		32.9	%

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THE PMI GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENTS BALANCE SHEETS

	U.S. Mortgage Insurance Operations(2)		International Operations (3)		Financial Guaranty (4)		Other(5)			Consolidated Total
	March 31, 2006 (unaudited)
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,203,435	$	1,094,316	$	—	$	579,202		$	3,876,953
Investments in unconsolidated subsidiaries(1)		133,218		—		850,686		18,803			1,002,707
Related party receivables		2,183		—		—		596			2,779
Reinsurance receivables, recoverables and prepaid premiums		14,986		5,239		—		—			20,225
Deferred policy acquisition costs		46,987		37,186		—		—			84,173
Other assets		206,435		30,560		—		123,678			360,673
Total assets	$	2,607,244	$	1,167,301	$	850,686	$	722,279		$	5,347,510
Liabilities
Reserve for losses and loss adjustment expenses	$	346,437	$	23,476	$	—	$	1		$	369,914
Unearned premiums		156,993		323,431		—		36			480,460
Long-term debt		—		—		—		819,529			819,529
Other liabilities		282,510		79,565		21,148		(32,874	)		350,349
Total liabilities		785,940		426,472		21,148		786,692			2,020,252
Shareholders’ equity		1,821,304		740,829		829,538		(64,413	)		3,327,258
Total liabilities and shareholders’ equity	$	2,607,244	$	1,167,301	$	850,686	$	722,279		$	5,347,510
	December 31, 2005
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,108,853	$	1,093,505	$	—	$	587,074		$	3,789,432
Investments in unconsolidated subsidiaries(1)		129,600		—		836,752		18,573			984,925
Related party receivables		2,700		—		—		164			2,864
Reinsurance receivables, recoverables and prepaid premiums		24,576		5,762		—		—			30,338
Deferred policy acquisition costs		48,310		37,860		—		—			86,170
Other assets		207,436		25,260		—		127,711			360,407
Total assets	$	2,521,475	$	1,162,387	$	836,752	$	733,522		$	5,254,136
Liabilities
Reserve for losses and loss adjustment expenses	$	345,536	$	23,302	$	—	$	3		$	368,841
Unearned premiums		162,368		328,489		—		42			490,899
Long-term debt		—		—		—		819,529			819,529
Other liabilities		248,343		79,610		19,204		(3,080	)		344,077
Total liabilities		756,247		431,401		19,204		816,494			2,023,346
Shareholders’ equity		1,765,228		730,986		817,548		(82,972	)		3,230,790
Total liabilities and shareholders’ equity	$	2,521,475	$	1,162,387	$	836,752	$	733,522		$	5,254,136
	March 31, 2005 (unaudited)
	(Dollars in thousands)
Assets
Cash and investments, at fair value	$	2,212,968	$	1,025,957	$	—	$	405,555		$	3,644,480
Investments in unconsolidated subsidiaries(1)		115,309		—		781,952		22,608			919,869
Equity investment held for sale(1)		—		—		—		110,373			110,373
Related party receivables		966		—		—		12,798			13,764
Reinsurance receivables, recoverables and prepaid premiums		23,044		20,871		—		—			43,915
Deferred policy acquisition costs		50,999		38,579		—		—			89,578
Other assets		199,813		27,334		—		112,544			339,691
Total assets	$	2,603,099	$	1,112,741	$	781,952	$	663,878		$	5,161,670
Liabilities
Reserve for losses and loss adjustment expenses	$	338,477	$	26,302	$	—	$	3		$	364,782
Unearned premiums		146,816		327,904		—		41			474,761
Long-term debt		—		—		—		819,529			819,529
Other liabilities		247,917		63,408		14,187		4,915			330,427
Total liabilities		733,210		417,614		14,187		824,488			1,989,499
Shareholders’ equity		1,869,889		695,127		767,765		(160,610	)		3,172,171
Total liabilities and shareholders’ equity	$	2,603,099	$	1,112,741	$	781,952	$	663,878		$	5,161,670

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THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS⁽²⁾ ANALYSIS OF RESERVE FOR LOSSES AND LAE

	March 31, 2006			December 31, 2005			March 31, 2005
	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	37,784	$	308,843	42,702	$	307,066	35,716	$	303,792
Pool insurance	19,069		37,594	20,379		38,470	16,992		34,685
Total	56,853	$	346,437	63,081	$	345,536	52,708	$	338,477

Reconciliation of Reserve for Losses and LAE

	March 31, 2006			December 31, 2005			Reserve Change
	(Dollars in thousands)
Gross reserve for losses and LAE:
Primary insurance	$	308,843		$	307,066		$	1,777
Pool insurance		37,594			38,470			(876	)
Total gross reserve for losses and LAE		346,437			345,536			901
Ceded reserve for losses:
Primary insurance		(2,213	)		(2,422	)		209
Pool insurance		(71	)		(55	)		(16	)
Total ceded reserve for losses		(2,284	)		(2,477	)		193
Net reserve for losses and LAE	$	344,153		$	343,059		$	1,094

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U.S. MORTGAGE INSURANCE OPERATIONS⁽²⁾ FINANCIAL AND STATISTICAL INFORMATION

	Three Months Ended March 31,
	2006			2005
Flow insurance written(in millions)	$	5,040		$	6,303
Structured insurance written(in millions)		3,047			1,865
Primary new insurance written(in millions)	$	8,087		$	8,168
Primary new risk written(in millions)	$	2,148		$	2,069
Pool new insurance written(in millions)(9)	$	4,726		$	1,306
Pool new risk written(in millions)(9)	$	104		$	41
Product mix as a % of new insurance written:
Above 97% LTV’s		13	%		13	%
90.01% to 95% LTV’s		21	%		24	%
85.01% to 90% LTV’s		46	%		38	%
90.01% to 95% LTV’s with >= 30% coverage		18	%		20	%
85.01% to 90% LTV’s with >= 25% coverage		41	%		33	%
ARMs		39	%		33	%
Monthlies		97	%		98	%
Refinances		39	%		37	%
Premiums written(in thousands):
Gross premiums written	$	208,135		$	201,129
Ceded premiums, net of assumed premiums		(41,654	)		(43,287	)
Refunded premiums		(3,007	)		(3,304	)
Net premiums written		163,474			154,538
Change in unearned premiums		4,064			9,574
Net premiums earned	$	167,538		$	164,112

Page 5

THE PMI GROUP, INC. AND SUBSIDIARIES

U.S. MORTGAGE INSURANCE OPERATIONS⁽²⁾ FINANCIAL AND STATISTICAL INFORMATION

		3/31/2006			12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004
Primary insurance in force(in millions)
Flow		$	85,685		$	86,991		$	88,433		$	89,965		$	91,399		$	93,263
Structured transactions			15,826			14,099			12,788			13,469			12,598			12,058
Total		$	101,511		$	101,090		$	101,221		$	103,434		$	103,997		$	105,321
Primary risk in force(in millions)
Flow		$	21,102		$	21,388		$	21,745		$	22,067		$	22,346		$	22,733
Structured transactions			4,147			3,583			3,167			3,296			2,966			2,772
Total		$	25,249		$	24,971		$	24,912		$	25,363		$	25,312		$	25,505
Pool risk in force (in millions)(9)		$	2,666		$	2,589		$	2,530		$	2,445		$	2,417		$	2,408
Primary risk in force - credit score distribution
Flow	620 or above		93.2	%		93.0	%		92.7	%		92.4	%		92.1	%		92.0	%
	619-575		5.4	%		5.5	%		5.7	%		5.9	%		6.1	%		6.2	%
	574 or below		1.4	%		1.5	%		1.6	%		1.7	%		1.8	%		1.8	%
Structured transactions	620 or above		79.2	%		76.9	%		73.9	%		71.7	%		66.9	%		65.9	%
	619-575		13.2	%		14.5	%		16.0	%		17.4	%		20.2	%		21.1	%
	574 or below		7.6	%		8.6	%		10.1	%		10.9	%		12.9	%		13.0	%
Total	620 or above		90.9	%		90.7	%		90.3	%		89.7	%		89.2	%		89.1	%
	619-575		6.6	%		6.8	%		7.0	%		7.4	%		7.7	%		7.9	%
	574 or below		2.5	%		2.5	%		2.7	%		2.9	%		3.1	%		3.0	%
Primary average loan size(in thousands)
Flow		$	135.6		$	134.5		$	133.3		$	132.2		$	131.5		$	131.3
Structured transactions		$	150.7		$	145.4		$	139.5		$	139.8		$	134.1		$	129.8
Total		$	137.8		$	136.0		$	134.1		$	133.2		$	131.8		$	131.1
Loss severity - primary(quarterly)
Flow			84.9	%		85.9	%		84.0	%		83.8	%		85.6	%		84.9	%
Structured transactions			91.2	%		94.3	%		89.6	%		87.7	%		90.9	%		84.6	%
Total			86.5	%		87.7	%		85.2	%		84.6	%		86.8	%		84.8	%
Persistency
Primary persistency rate			63.1	%		61.9	%		61.2	%		62.0	%		60.8	%		60.9	%
Primary loans, defaults and default rates
Primary policies in force			736,908			743,533			754,934			776,721			788,847			803,236
Primary loans in default			37,784			42,702			38,146			35,030			35,716			39,054
Primary default rate			5.13	%		5.74	%		5.05	%		4.51	%		4.53	%		4.86	%
Structured transactions only default rate			8.59	%		9.85	%		10.09	%		8.54	%		8.17	%		9.19	%
Pool default rate			6.17	%		6.84	%		6.34	%		5.65	%		5.65	%		5.50	%
Claims paid(year-to-date in millions)
Primary claims paid - flow		$	37.3		$	165.8		$	126.6		$	87.8		$	41.7		$	141.3
Primary claims paid - structured transactions			13.5			49.1			36.8			25.4			13.8			51.9
Total primary claims paid			50.8			214.9			163.4			113.2			55.5			193.2
Total pool and other			4.3			20.1			15.0			9.6			4.7			17.7
Total claims paid		$	55.1		$	235.0		$	178.4		$	122.8		$	60.2		$	210.9
Number of primary claims paid(year-to-date)			2,058			9,262			7,124			4,934			2,413			8,335
Average primary claim size(year-to-date in thousands)		$	24.7		$	23.2		$	22.9		$	22.9		$	23.0		$	23.2
Captive reinsurance arrangements(year-to-date)
Percentage of flow NIW subject to captive reinsurance arrangements			70.8	%		69.0	%		68.0	%		65.0	%		60.4	%		62.8	%
Percentage of primary NIW subject to captive reinsurance arrangements			44.8	%		54.7	%		55.7	%		50.7	%		47.1	%		55.7	%
Percentage of primary IIF subject to captive reinsurance arrangements			53.2	%		53.4	%		53.2	%		52.1	%		52.4	%		52.0	%
Percentage of primary RIF subject to captive reinsurance arrangements			53.9	%		54.4	%		54.4	%		53.4	%		53.9	%		53.6	%
Alt-A primary insurance in force(in millions)
With FICO scores of 660 and above		$	14,754		$	13,689		$	12,548		$	11,800		$	10,892		$	10,250
With FICO scores below 660 and above 619			2,785			2,566			2,329			2,326			2,136			2,029
Total Alt-A primary insurance in force		$	17,539		$	16,255		$	14,877		$	14,126		$	13,028		$	12,279
Risk-to-capital ratio(10)			8.1 to 1			8.2 to 1			8.0 to 1			8.3 to 1			8.1 to 1			8.2 to 1

Page 6

THE PMI GROUP, INC. AND SUBSIDIARIES

CMG MORTGAGE INSURANCE COMPANY FINANCIAL AND STATISTICAL INFORMATION

	March 31, 2006			December 31, 2005			March 31, 2005
Primary new insurance written(year-to-date in millions)	$	891		$	5,388		$	1,071
Primary insurance in force(in millions)	$	15,476		$	15,495		$	14,213
Primary risk in force(in millions)	$	3,686		$	3,666		$	3,286
Insured primary loans		110,879			111,472			105,928
Persistency		72.3	%		72.0	%		69.1	%
Primary loans in default		992			907			713
Primary default rate(year-to-date)		0.89	%		0.81	%		0.67	%
Primary claims paid(year-to-date in thousands)	$	1,200		$	4,827		$	892
Number of primary claims paid(year-to-date)		55			222			41
Average primary claim size (year-to-date in thousands)	$	21.8		$	21.7		$	21.8
PMI AUSTRALIA FINANCIAL AND STATISTICAL INFORMATION
	March 31, 2006			December 31, 2005			March 31, 2005
Net premiums written(year-to-date in thousands)	$	34,640		$	151,882		$	32,388
Premiums earned(year-to-date in thousands)	$	32,267		$	123,781		$	29,399
Flow insurance written(year-to-date in millions)	$	4,152		$	18,321		$	3,922
RMBS insurance written(year-to-date in millions)		5,291			10,671			3,816
New insurance written(year-to-date in millions)	$	9,443		$	28,992		$	7,738
Insurance in force(in millions)	$	123,050		$	119,915		$	117,439
Risk in force(in millions)	$	112,199		$	108,751		$	106,724
Policies in force		1,026,260			981,732			955,922
Loans in default		1,520			1,264			959
Default rate		0.15	%		0.13	%		0.10	%
Claims paid(year-to-date in thousands)	$	1,224		$	3,261		$	305
Number of claims paid(year-to-date)		31			93			18
Average claim size(year-to-date in thousands)	$	39.5		$	35.1		$	16.9
PMI EUROPE FINANCIAL AND STATISTICAL INFORMATION
	March 31, 2006			December 31, 2005			March 31, 2005
Net premiums written(year-to-date in thousands)	$	2,754		$	8,921		$	1,547
Premiums earned(year-to-date in thousands)	$	3,888		$	17,507		$	4,353
New insurance written(year-to-date in millions)	$	32		$	33		$	—
New credit default swaps written(year-to-date in millions)	$	629		$	514		$	—
New reinsurance written(year-to-date in millions)	$	627		$	6,215		$	—
Insurance in force(in millions)	$	39,254		$	38,443		$	31,365
Risk in force(in millions)	$	2,760		$	2,776		$	2,405
Claims paid including credit default swaps(year-to-date in thousands)	$	644		$	2,761		$	825

Page 7

THE PMI GROUP, INC. AND SUBSIDIARIES

APPENDIX A - QUARTERLY FINANCIAL INFORMATION

PMI AUSTRALIA QUARTERLY FINANCIAL INFORMATION

	2006 1st Quarter		2005
			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
			(Australian $ in thousands, unless otherwise noted)
Income Statement Components - Quarter Ended
Premiums earned	$	43,644	$	43,959		$	41,815		$	38,929		$	37,840
Net investment income	$	16,876	$	16,257		$	15,854		$	14,966		$	14,705
Change in fair value of foreign currency put options	$	1,855	$	(24	)	$	(232	)	$	(422	)	$	(1,338	)
Total expenses	$	15,789	$	17,226		$	13,632		$	15,104		$	13,788
Net income	$	32,546	$	31,906		$	31,079		$	26,725		$	26,487
Net income(U.S. $ in thousands)	$	24,054	$	23,728		$	23,623		$	20,541		$	20,584
Balance Sheet Components
Assets
Cash and investments, at fair value	$	1,219,179	$	1,197,016		$	1,147,390		$	1,090,399		$	1,037,704
Total assets	$	1,302,982	$	1,275,573		$	1,225,683		$	1,188,574		$	1,132,961
Liabilities and Shareholder’s Equity
Reserve for losses and LAE	$	11,489	$	11,573		$	11,156		$	12,541		$	12,549
Unearned premiums	$	419,207	$	415,885		$	406,661		$	395,113		$	382,781
Shareholder’s equity	$	822,918	$	793,045		$	757,372		$	730,113		$	689,927

Page 8

PMI EUROPE QUARTERLY FINANCIAL INFORMATION

	2006 1st Quarter			2005
				4th Quarter		3rd Quarter			2nd Quarter		1st Quarter
				(Euro € in thousands, unless otherwise noted)
Income Statement Components - Quarter Ended
Premiums earned	€	3,232		€	3,721	€	3,749		€	3,298	€	3,321
Net investment income	€	1,915		€	1,730	€	2,188		€	1,951	€	2,002
Change in fair value of foreign currency put options	€	(43	)	€	55	€	(3	)	€	342	€	(33	)
Total expenses	€	2,692		€	3,824	€	3,244		€	3,168	€	2,031
Net income	€	2,451		€	1,362	€	2,276		€	1,828	€	2,326
Net income(U.S. $ in thousands)	$	2,949		$	1,615	$	2,774		$	2,330	$	3,049
Pre-tax net income(in thousands)
Balance Sheet Components
Assets
Cash and investments, at fair value	€	182,304		€	182,559	€	182,682		€	179,698	€	172,707
Total assets	€	192,990		€	192,107	€	192,431		€	188,840	€	182,857
Liabilities and Shareholder’s Equity
Reserve for losses and LAE	€	12,581		€	12,508	€	13,019		€	13,395	€	12,807
Unearned premiums	€	19,077		€	20,020	€	20,808		€	22,589	€	24,719
Shareholder’s equity	€	132,900		€	133,818	€	133,352		€	131,452	€	125,395

Page 8

THE PMI GROUP, INC. AND SUBSIDIARIES

APPENDIX B- BUSINESS SEGMENTS RESULTS OF OPERATIONS BY QUARTER

	2006 1st Quarter			2005
				4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
				(Dollars in thousands)
U.S. Mortgage Insurance Operations(2)
Net premiums written	$	163,474		$	201,160		$	158,866		$	152,564		$	154,538
Revenues
Premiums earned	$	167,538		$	166,778		$	166,052		$	168,248		$	164,112
Net investment income		25,676			26,168			25,046			27,546			25,579
Equity in earnings from unconsolidated subsidiaries(1)		4,492			4,583			5,217			4,937			4,074
Net realized investment gains		237			378			2,597			1,167			420
Other income (loss)		(23	)		(3	)		3			(5	)		4
Total revenues		197,920			197,904			198,915			201,893			194,189
Losses and expenses
Losses and loss adjustment expenses		59,147			63,159			61,667			65,496			63,118
Amortization of deferred policy acquisition costs		13,442			14,113			14,478			15,030			16,026
Other underwriting expenses and operating expenses(11)		25,911			29,057			25,260			25,278			23,553
Field office restructuring(6)		1,955			—			—			—			—
Interest expense		—			1			3			—			1
Total losses and expenses		100,455			106,330			101,408			105,804			102,698
Income before income taxes		97,465			91,574			97,507			96,089			91,491
Income taxes		27,360			21,696			27,977			26,400			25,149
Net income	$	70,105		$	69,878		$	69,530		$	69,689		$	66,342
International Operations(3)
Net premiums written	$	38,420		$	44,913		$	47,197		$	47,185		$	39,185
Revenues
Premiums earned	$	38,686		$	39,781		$	38,979		$	38,141		$	35,435
Net investment income		14,785			14,499			14,844			14,058			13,756
Net realized investment gains (losses)		142			(221	)		(27	)		(18	)		340
Other income (loss)		3,031			778			1,287			873			(113	)
Total revenues		56,644			54,837			55,083			53,054			49,418
Losses and expenses
Losses and loss adjustment expenses		1,792			1,601			(365	)		1,739			1,363
Amortization of deferred policy acquisition costs		3,545			3,274			3,269			3,779			4,417
Other underwriting and operating expenses		9,789			12,663			11,648			10,539			7,006
Interest expense		—			9			—			—			—
Total losses and expenses		15,126			17,547			14,552			16,057			12,786
Income before income taxes		41,518			37,290			40,531			36,997			36,632
Income taxes		12,909			10,251			12,514			11,747			11,485
Net income	$	28,609		$	27,039		$	28,017		$	25,250		$	25,147
Financial Guaranty(4)
Equity in earnings from unconsolidated subsidiaries(1)	$	23,235		$	21,453		$	13,691		$	23,761		$	20,846
Income taxes		2,137			2,208			1,135			2,254			1,956
Net income	$	21,098		$	19,245		$	12,556		$	21,507		$	18,890
Other(5)
Net premiums written	$	10		$	27		$	19		$	13		$	23
Revenues
Premiums earned	$	17		$	18		$	19		$	19		$	20
Net investment income		6,406			4,832			4,537			4,143			4,455
Equity in earnings (losses) from unconsolidated subsidiaries(1)		(102	)		(165	)		(388	)		(416	)		292
Net realized investment gains (losses)		(39	)		(4	)		(2,897	)		354			(39	)
Other income		3,777			4,283			2,649			5,383			5,644
Total revenues		10,059			8,964			3,920			9,483			10,372
Losses and expenses
Other underwriting expenses and operating expenses(11)		17,843			17,354			17,607			18,600			15,086
Compensation expense related to stock options and employee stock purchase plan(7)		5,022			—			—			—			—
Interest expense		8,179			4,644			8,455			8,472			9,552
Total losses and expenses		31,044			21,998			26,062			27,072			24,638
Loss before income tax benefits		(20,985	)		(13,034	)		(22,142	)		(17,589	)		(14,266	)
Income tax benefits		(6,521	)		(4,587	)		(7,750	)		(5,728	)		(5,045	)
Net loss	$	(14,464	)	$	(8,447	)	$	(14,392	)	$	(11,861	)	$	(9,221	)

Page 9