-------------------------------------------------------------------------------
PMA Capital Corporation
Statistical Supplement
Second Quarter - 2003
- --------------------------------------------------------------------------------
Table of Contents
-----------------
Page
Consolidated Highlights:
Financial Highlights 1
Pro Forma Financial Highlights 1A
Financial Highlights - YTD 2
Pro Forma Financial Highlights - YTD 2A
Consolidated Statements of Operations - Per Share Data 3
Pro Forma Consolidated Statements of Operations - Per Share Data 3A
Consolidated Statements of Operations 4
Pro Forma Consolidated Statements of Operations 4A
Consolidated Statements of Operations - YTD 5
Pro Forma Consolidated Statements of Operations - YTD 5A
Consolidated Balance Sheets 6
Invested Assets & Net Investment Income 7
Segment Information:
Statements of Operations - Consolidating - YTD 8 - 9
Insurance Ratios - Consolidating - YTD 10 - 11
Statements of Operations - Consolidating - Second Quarter 12 - 13
Insurance Ratios - Consolidating - Second Quarter 14 - 15
Statements of Operations - PMA Re 16
Insurance Ratios - PMA Re 17
Statements of Operations - PMA Insurance Group 18
Insurance Ratios - PMA Insurance Group 19
Statements of Operations - Run-off Operations 20
Statements of Operations - Corporate & Other 21
Operating Cash Flow Information:
Operating Cash Flows - Consolidated 22
Pro Forma Operating Cash Flows - Consolidated 22A
Operating Cash Flows - PMA Re 23
Operating Cash Flows - PMA Insurance Group 24
Operating Cash Flows - Run-off Operations 25
Statutory Financial Information:
Statutory Financial Information 27
Statutory Net Premiums Written by Product 28
Other Information:
Industry Ratings and Market Information 29
Legend:
NM - Not Meaningful
NA - Not Applicable
Notes: This supplement contains "A" pages which include pro forma financial
information. Pro forma financial information represents our reported
results for the periods shown adjusted to separately report the
results of the Run-off operations. This presentation is provided for
information purposes only, and is not in conformity with Generally
Accepted Accounting Principles ("GAAP"). We provide this information
so investors can focus on our comparative results as we evaluate the
financial performance of our ongoing businesses on which our future
growth depends.
Operating income (loss), which we define as net income (loss) under
GAAP excluding net realized investment gains and losses, is the
financial performance measure used by our management and Board of
Directors to evaluate and assess the results of our insurance
businesses. Accordingly, we report operating income by segment in the
disclosures required under SFAS No. 131, "Disclosures About Segments
of an Enterprise and Related Information." Our management and Board
of Directors use operating income (loss) as the measure of financial
performance for our insurance operations because (i) net realized
investment gains and losses are unpredictable and not necessarily
indicative of current operating fundamentals or future performance of
the business segments and (ii) in many instances, decisions to buy
and sell securities are made at the holding company level, and such
decisions result in net realized gains and losses that do not relate
to the operations of the individual segments. Operating income (loss)
does not replace net income (loss) as the GAAP measure of our
consolidated results of operations. See page 1 for a reconciliation
of operating results by segment to GAAP net income (loss).
PMA Capital Corporation
Financial Highlights
(Dollar Amounts in Thousands, Except Per Share Data)
2nd 3rd 4th 1st 2nd % Change
Quarter Quarter Quarter Quarter Quarter 2nd
2002 2002 2002 2003 2003 Quarter
-----------------------------------------------------------------------------------
Net Premiums Written by Segment:
PMA Re $ 208,982 $ 153,862 $ 185,870 $ 158,579 $ 172,464 -17.5%
PMA Insurance Group 83,647 118,627 73,549 194,239 119,440 42.8%
Run-off Operations 1 10,089 (3,418) (14,189) (1,704) (1,124) NM
Corporate & Other (215) (220) (228) (256) (124) 42.3%
--------- --------- --------- --------- --------- ------
Net premiums written $ 302,503 $ 268,851 $ 245,002 $ 350,858 $ 290,656 -3.9%
========= ========= ========= ========= ========= ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Re $ 13,769 $ 15,196 $ (28,480) $ 8,577 $ 13,107 -4.8%
PMA Insurance Group 6,387 6,714 5,838 8,340 6,838 7.1%
Run-off Operations 1 (44,407) (2) (4) 1 (3) 100.0%
Corporate & Other (3,747) (3,211) (3,148) (4,674) (5,564) -48.5%
--------- --------- --------- --------- --------- ------
Pre-tax operating income (loss) (27,998) 18,697 (25,794) 12,244 14,378 NM
Net realized investment gains (losses) (17,552) (3,868) 3,943 4,355 4,451 NM
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) (45,550) 14,829 (21,851) 16,599 18,829 NM
Income tax expense (benefit) (15,801) 5,454 (11,448) 5,897 6,662 NM
--------- --------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Net income (loss) $ (29,749) $ 9,375 $ (10,403) $ 10,702 $ 12,167 NM
========= ========= ========= ========= ========= ------
After-tax operating income (loss) $ (18,340) $ 11,889 $ (12,966) $ 7,871 $ 9,274 NM
========= ========= ========= ========= ========= ======
Diluted Earnings (Loss) Per Share:
Net income (loss) $ (0.95) $ 0.30 $ (0.33) $ 0.34 $ 0.39 NM
Less the impact of:
Realized gains (losses) after tax (0.36) (0.08) 0.08 0.09 0.09 NM
--------- --------- --------- --------- --------- ------
After-tax operating income (loss) $ (0.59) $ 0.38 $ (0.41) $ 0.25 $ 0.30 NM
========= ========= ========= ========= ========= ======
Capitalization:
Debt $ 62,500 $ 55,000 $ 151,250 $ 131,250 $ 176,250 182.0%
Shareholders' equity excluding FAS
115 unrealized gain 554,520 561,089 548,128 555,198 565,081 1.9%
--------- --------- --------- --------- --------- ------
Total capitalization excluding FAS
115 unrealized gain 617,020 616,089 699,378 686,448 741,331 20.1%
FAS 115 unrealized gain 5,381 32,784 33,262 33,170 52,666 NM
--------- --------- --------- --------- --------- ------
Total capitalization including FAS
115 unrealized gain $ 622,401 $ 648,873 $ 732,640 $ 719,618 $ 793,997 27.6%
========= ========= ========= ========= ========= ======
Book Value Per Share:
Excluding FAS 115 unrealized gain $ 17.71 $ 17.91 $ 17.50 $ 17.72 $ 18.04 1.9%
Including FAS 115 unrealized gain $ 17.88 $ 18.96 $ 18.56 $ 18.78 $ 19.72 10.3%
Debt to Total Capital:
Excluding FAS 115 unrealized gain 10.1% 8.9% 21.6% 19.1% 23.8% 135.6%
Including FAS 115 unrealized gain 10.0% 8.5% 20.6% 18.2% 22.2% 122.0%
Interest Coverage:
Income before interest and income taxes
to interest expense NM 29.57 NM 10.44 9.46 NM
Operating income before interest
and income taxes to interest expense NM 37.03 NM 7.96 7.46 NM
1 Formerly known as Caliber One.
PMA Capital Corporation
Pro Forma Financial Highlights
(Dollar Amounts in Thousands, Except Per Share Data)
2nd 3rd 4th 1st 2nd % Change
Quarter Quarter Quarter Quarter Quarter 2nd
2002 2002 2002 2003 2003 Quarter
-------------------------------------------------------------------------
Net Premiums Written by Segment:
PMA Re $ 208,982 $ 153,862 $ 185,870 $ 158,579 $ 172,464 -17.5%
PMA Insurance Group 83,647 118,627 73,549 194,239 119,440 42.8%
Run-off Operations 1 10,089 (3,418) (14,189) (1,704) (1,124) NM
Corporate & Other (215) (220) (228) (256) (124) 42.3%
--------- --------- --------- --------- --------- ------
Net premiums written $ 302,503 $ 268,851 $ 245,002 $ 350,858 $ 290,656 -3.9%
========= ========= ========= ========= ========= ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Re $ 13,769 $ 15,196 $ (28,480) $ 8,577 $ 13,107 -4.8%
PMA Insurance Group 6,387 6,714 5,838 8,340 6,838 7.1%
Corporate & Other (3,747) (3,211) (3,148) (4,674) (5,564) -48.5%
--------- --------- --------- --------- --------- ------
Pre-tax operating income (loss) - ongoing operations 16,409 18,699 (25,790) 12,243 14,381 -12.4%
Net realized investment gains (losses)
- ongoing operations (17,538) (3,834) 2,149 3,836 4,341 NM
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) - ongoing operations (1,129) 14,865 (23,641) 16,079 18,722 NM
Income tax expense (benefit) (259) 5,467 (12,074) 5,715 6,624 NM
--------- --------- --------- --------- --------- ------
Income (loss) from ongoing operations (870) 9,398 (11,567) 10,364 12,098 NM
Income (loss) from Run-off Operations 1, net of tax (28,879) (23) 1,164 338 69 NM
------
--------- --------- --------- --------- --------- ------
Net income (loss) $ (29,749) $ 9,375 $ (10,403) $ 10,702 $ 12,167 NM
========= ========= ========= ========= ========= ======
After-tax operating income (loss)
- ongoing operations $ 10,530 $ 11,890 $ (12,964) $ 7,871 $ 9,276 -11.9%
After-tax operating loss - Run-off Operations 1 (28,870) (1) (2) -- (2) 100.0%
--------- --------- --------- --------- --------- ------
After-tax operating income (loss) - total $ (18,340) $ 11,889 $ (12,966) $ 7,871 $ 9,274 NM
========= ========= ========= ========= ========= ======
Diluted Earnings (Loss) Per Share:
Net income (loss) $ (0.95) $ 0.30 $ (0.33) $ 0.34 $ 0.39 NM
Less:
Income (loss) from Run-off Operations 1, net of tax (0.92) -- 0.04 0.01 -- 100.0%
--------- --------- --------- --------- --------- ------
Income (loss) from ongoing operations (0.03) 0.30 (0.37) 0.33 0.39 NM
Realized gains (losses) - ongoing operations (0.37) (0.08) 0.04 0.08 0.09 NM
--------- --------- --------- --------- --------- ------
After-tax operating income (loss)
- ongoing operations $ 0.34 $ 0.38 $ (0.41) $ 0.25 $ 0.30 -11.8%
========= ========= ========= ========= ========= ======
Interest Coverage:
Income before interest and income taxes
to interest expense NM 29.64 NM 10.15 9.41 NM
Operating income before interest and income taxes
to interest expense 29.69 37.03 NM 7.96 7.46 -74.9%
----------------
Note: The information on this page is presented for informational purposes only and is not in conformity with GAAP. See the
note on the Table of Contents page for additional information regarding the pro forma presentation.
1 Formerly known as Caliber One.
PMA Capital Corporation
Financial Highlights
(Dollar Amounts in Thousands, Except Per Share Data)
Six Six % Change
Months Months Six
2003 2002 Months
----------------------------------------
Net Premiums Written by Segment:
PMA Re $ 331,043 $ 299,307 10.6%
PMA Insurance Group 313,679 260,100 20.6%
Run-off Operations 1 (2,828) 32,170 NM
Corporate & Other (380) (433) 12.2%
--------- --------- ------
Net premiums written $ 641,514 $ 591,144 8.5%
========= ========= ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Re $ 21,684 $ 26,706 -18.8%
PMA Insurance Group 15,178 12,794 18.6%
Run-off Operations 1 (2) (87,495) 100.0%
Corporate & Other (10,238) (7,980) -28.3%
--------- --------- ------
Pre-tax operating income (loss) 26,622 (55,975) NM
Net realized investment gains (losses) 8,806 (16,160) NM
--------- --------- ------
Pre-tax income (loss) 35,428 (72,135) NM
Income tax expense (benefit) 12,559 (25,139) NM
--------- --------- ------
Net income (loss) $ 22,869 $ (46,996) NM
========= ========= ======
After-tax operating income (loss) $ 17,145 $ (36,492) NM
========= ========= ======
Diluted Earnings (Loss) Per Share:
Net income (loss) $ 0.73 $ (1.50) NM
Less the impact of:
Realized gains (losses) after tax 0.18 (0.33) NM
--------- --------- ------
After-tax operating income (loss) $ 0.55 $ (1.17) NM
========= ========= ======
1 Formerly known as Caliber One.
PMA Capital Corporation
Pro Forma Financial Highlights
(Dollar Amounts in Thousands, Except Per Share Data)
Six Six % Change
Months Months Six
2003 2002 Months
-------------------------------------------
Net Premiums Written by Segment:
PMA Re $ 331,043 $ 299,307 10.6%
PMA Insurance Group 313,679 260,100 20.6%
Run-off Operations 1 (2,828) 32,170 NM
Corporate & Other (380) (433) 12.2%
--------- --------- ------
Net premiums written $ 641,514 $ 591,144 8.5%
========= ========= ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Re $ 21,684 $ 26,706 -18.8%
PMA Insurance Group 15,178 12,794 18.6%
Corporate & Other (10,238) (7,980) -28.3%
--------- --------- ------
Pre-tax operating income - ongoing operations 26,624 31,520 -15.5%
Net realized investment gains (losses) - ongoing operations 8,177 (16,262) NM
--------- --------- ------
Pre-tax income - ongoing operations 34,801 15,258 128.1%
Income tax expense 12,339 5,456 126.2%
--------- --------- ------
Income from ongoing operations 22,462 9,802 129.2%
Income (loss) from Run-off Operations 1, net of tax 407 (56,798) NM
--------- --------- ------
Net income (loss) $ 22,869 $ (46,996) NM
========= ========= ======
After-tax operating income - ongoing operations $ 17,147 $ 20,373 -15.8%
After-tax operating loss - Run-off Operations 1 (2) (56,865) 100.0%
--------- --------- ------
After-tax operating income (loss) - total $ 17,145 $ (36,492) NM
========= ========= ======
Diluted Earnings (Loss) Per Share:
Net income (loss) $ 0.73 $ (1.50) NM
Less:
Income (loss) from Run-off Operations 1, net of tax 0.01 (1.81) NM
--------- --------- ------
Income from ongoing operations 0.72 0.31 132.3%
Realized gains (losses) - ongoing operations 0.17 (0.34) NM
--------- --------- ------
After-tax operating income - ongoing operations $ 0.55 $ 0.65 -15.4%
========= ========= ======
Note: The information on this page is presented for informational purposes only and is not in conformity with GAAP. See the
note on the Table of Contents page for additional information regarding the pro forma presentation.
1 Formerly known as Caliber One.
PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
----------------------------------------------------------------------------------------------------
Diluted Earnings
(Loss) Per Share:
Net income (loss) $ (0.95) $ 0.30 $ (0.33) $ 0.34 $ 0.39 $ 0.73 $ (1.50)
============ ============= ============= ============== ============= ============ ===========
Pre-tax operating
income (loss) $ (0.89) $ 0.59 $ (0.82) $ 0.39 $ 0.46 $ 0.85 $ (1.79)
============ ============= ============= ============== ============= ============ ===========
After-tax operating
income (loss) $ (0.59) $ 0.38 $ (0.41) $ 0.25 $ 0.30 $ 0.55 $ (1.17)
============ ============= ============= ============== ============= ============ ===========
Diluted weighted average
common shares outstanding 31,279,419 31,621,993 31,328,922 31,328,922 31,331,197 31,340,482 31,240,098
============ ============= ============= ============== ============= ============ ===========
----------------------------------------------------------------------------------------------------
Dividends declared:
Class A Common stock $ 0.105 $ 0.105 $ 0.105 $ 0.105 $ 0.105 $ 0.21 $ 0.21
Actual common shares issued
and outstanding 31,318,922 31,328,922 31,328,922 31,328,922 31,328,922 31,328,922 31,318,922
============ ============= ============= ============== ============= ============ ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Common Stock prices:
High $ 25.99 $ 20.50 $ 15.30 $ 15.00 $ 12.30 $ 15.00 $ 25.99
Low $ 17.65 $ 13.05 $ 12.37 $ 6.67 $ 6.44 $ 6.44 $ 17.65
Close $ 21.15 $ 15.00 $ 14.33 $ 6.77 $ 12.12 $ 12.12 $ 21.15
PMA Capital Corporation
Pro Forma Consolidated Statements of Operations - Per Share Data
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
--------------------------------------------------------------------------------------------
Diluted Earnings (Loss) Per Share:
Net income (loss) $ (0.95) $ 0.30 $ (0.33) $ 0.34 $ 0.39 $ 0.73 $ (1.50)
Less:
Income (loss) from Run-off
Operations 1, net of tax (0.92) - 0.04 0.01 - 0.01 (1.81)
----------- ----------- ----------- ----------- ----------- ------------ ------------
Income (loss) from ongoing
operations (0.03) 0.30 (0.37) 0.33 0.39 0.72 0.31
Realized gains (losses)
- ongoing operations (0.37) (0.08) 0.04 0.08 0.09 0.17 (0.34)
----------- ----------- ----------- ----------- ----------- ------------ ------------
After-tax operating income (loss)
- ongoing operations $ 0.34 $ 0.38 $ (0.41) $ 0.25 $ 0.30 $ 0.55 $ 0.65
=========== =========== =========== =========== =========== ============ ============
Pre-tax operating income (loss)
- ongoing operations $ 0.53 $ 0.59 $ (0.82) $ 0.39 $ 0.46 $ 0.85 $ 1.01
=========== =========== =========== =========== =========== ============ ============
Diluted weighted average common
shares outstanding 31,279,419 31,621,993 31,328,922 31,328,922 31,331,197 31,340,482 31,240,098
=========== =========== =========== =========== =========== ============ ============
Note: The information on this page is presented for informational purposes only and is not in conformity with GAAP. See the note
on the Table of Contents page for additional information regarding the pro forma presentation.
1 Formerly known as Caliber One.
PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
2nd 3rd 4th 1st 2nd % Change
Quarter Quarter Quarter Quarter Quarter 2nd
2002 2002 2002 2003 2003 Quarter
------------------------------------------------------------------------
Gross Premiums Written $ 393,129 $ 322,306 $ 283,303 $ 419,694 $ 361,899 -7.9%
========= ========= ========= ========= ========= ======
Net Premiums Written $ 302,503 $ 268,851 $ 245,002 $ 350,858 $ 290,656 -3.9%
========= ========= ========= ========= ========= ======
Revenues:
Net premiums earned $ 274,800 $ 252,731 $ 263,806 $ 274,070 $ 285,622 3.9%
Net investment income 23,200 18,087 21,008 17,645 17,780 -23.4%
Net realized investment gains
(losses) (17,552) (3,868) 3,943 4,355 4,451 NM
Other revenues 3,691 4,057 3,859 7,000 4,766 29.1%
--------- --------- --------- --------- --------- ------
Total revenues 284,139 271,007 292,616 303,070 312,619 10.0%
--------- --------- --------- --------- --------- ------
Expenses:
Losses and loss adjustment expenses 206,009 180,733 250,698 202,585 193,074 -6.3%
Acquisition expenses 64,318 55,390 55,782 56,220 72,215 12.3%
Operating expenses 56,387 18,067 6,237 23,872 24,222 -57.0%
Dividends to policyholders 2,403 1,469 111 2,036 2,054 -14.5%
Interest expense 572 519 1,639 1,758 2,225 289.0%
--------- --------- --------- --------- --------- ------
Total losses and expenses 329,689 256,178 314,467 286,471 293,790 -10.9%
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) (45,550) 14,829 (21,851) 16,599 18,829 NM
--------- --------- --------- --------- --------- ------
Income tax expense (benefit):
Current -- -- (3,606) -- 221 NM
Deferred (15,801) 5,454 (7,842) 5,897 6,441 NM
--------- --------- --------- --------- --------- ------
Total income tax expense (benefit) (15,801) 5,454 (11,448) 5,897 6,662 NM
--------- --------- --------- --------- --------- ------
Net income (loss) $ (29,749) $ 9,375 $ (10,403) $ 10,702 $ 12,167 NM
========= ========= ========= ========= ========= ======
Pre-tax operating income (loss) $ (27,998) $ 18,697 $ (25,794) $ 12,244 $ 14,378 NM
========= ========= ========= ========= ========= ======
After-tax operating income (loss) $ (18,340) $ 11,889 $ (12,966) $ 7,871 $ 9,274 NM
========= ========= ========= ========= ========= ======
PMA Capital Corporation
Pro Forma Consolidated Statements of Operations
(In Thousands)
2nd 3rd 4th 1st 2nd % Change
Quarter Quarter Quarter Quarter Quarter 2nd
2002 2002 2002 2003 2003 Quarter
------------------------------------------------------------------
Gross Premiums Written $ 350,017 $ 316,789 $ 283,472 $ 419,584 $ 361,704 3.3%
========= ========= ========= ========= ========= ======
Net Premiums Written $ 292,414 $ 272,269 $ 259,191 $ 352,562 $ 291,780 -0.2%
========= ========= ========= ========= ========= ======
Revenues:
Net premiums earned $ 269,465 $ 238,481 $ 265,478 $ 267,224 $ 285,230 5.9%
Net investment income 22,961 17,973 20,444 17,284 17,252 -24.9%
Net realized investment gains (losses) (17,538) (3,834) 2,149 3,836 4,341 NM
Other revenues 3,691 4,057 3,859 4,500 4,766 29.1%
--------- --------- --------- --------- --------- ------
Total revenues 278,579 256,677 291,930 292,844 311,589 11.8%
--------- --------- --------- --------- --------- ------
Expenses:
Losses and loss adjustment expenses 195,879 170,695 244,983 196,710 192,481 -1.7%
Acquisition expenses 61,124 51,718 53,762 55,355 72,153 18.0%
Operating expenses 19,730 17,411 15,076 20,906 23,954 21.4%
Dividends to policyholders 2,403 1,469 111 2,036 2,054 -14.5%
Interest expense 572 519 1,639 1,758 2,225 289.0%
--------- --------- --------- --------- --------- ------
Total losses and expenses 279,708 241,812 315,571 276,765 292,867 4.7%
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) - ongoing
operations (1,129) 14,865 (23,641) 16,079 18,722 NM
--------- --------- --------- --------- --------- ------
Income tax expense (benefit):
Current -- -- (3,606) -- 221 NM
Deferred (259) 5,467 (8,468) 5,715 6,403 NM
--------- --------- --------- --------- --------- ------
Total income tax expense (benefit) (259) 5,467 (12,074) 5,715 6,624 NM
--------- --------- --------- --------- --------- ------
Income (loss) from ongoing operations (870) 9,398 (11,567) 10,364 12,098 NM
Income (loss) from Run-off Operations
1, net of tax (28,879) (23) 1,164 338 69 NM
--------- --------- --------- --------- --------- ------
Net income (loss) $ (29,749) $ 9,375 $ (10,403) $ 10,702 $ 12,167 NM
========= ========= ========= ========= ========= ======
Pre-tax operating income (loss)
- ongoing operations $ 16,409 $ 18,699 $ (25,790) $ 12,243 $ 14,381 -12.4%
========= ========= ========= ========= ========= ======
After-tax operating income (loss)
- ongoing operations $ 10,530 $ 11,890 $ (12,964) $ 7,871 $ 9,276 -11.9%
========= ========= ========= ========= ========= ======
Note: The information on this page is presented for informational purposes only and is not in conformity with GAAP. See the
note on the Table of Contents page for additional information regarding the pro forma presentation.
1 Formerly known as Caliber One.
PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
Six Six % Change
Months Months Six
2003 2002 Months
--------------------------------
Gross Premiums Written $ 781,593 $ 780,937 0.1%
========= ========= ======
Net Premiums Written $ 641,514 $ 591,144 8.5%
========= ========= ======
Revenues:
Net premiums earned $ 559,692 $ 474,474 18.0%
Net investment income 35,425 45,786 -22.6%
Net realized investment gains (losses) 8,806 (16,160) NM
Other revenues 11,766 7,414 58.7%
--------- --------- ------
Total revenues 615,689 511,514 20.4%
--------- --------- ------
Expenses:
Losses and loss adjustment expenses 395,659 392,227 0.9%
Acquisition expenses 128,435 105,812 21.4%
Operating expenses 48,094 78,504 -38.7%
Dividends to policyholders 4,090 6,007 -31.9%
Interest expense 3,983 1,099 262.4%
--------- --------- ------
Total losses and expenses 580,261 583,649 -0.6%
--------- --------- ------
Pre-tax income (loss) 35,428 (72,135) NM
--------- --------- ------
Income tax expense (benefit):
Current 221 -- NM
Deferred 12,338 (25,139) NM
--------- --------- ------
Total income tax expense (benefit) 12,559 (25,139) NM
--------- --------- ------
Net income (loss) $ 22,869 $ (46,996) NM
========= ========= ======
Pre-tax operating income (loss) $ 26,622 $ (55,975) NM
========= ========= ======
After-tax operating income (loss) $ 17,145 $ (36,492) NM
========= ========= ======
PMA Capital Corporation
Pro Forma Consolidated Statements of Operations
(In Thousands)
Six Six % Change
Months Months Six
2003 2002 Months
-------------------------------------------------
Gross Premiums Written $ 781,288 $ 680,977 14.7%
========= ========= =====
Net Premiums Written $ 644,342 $ 558,974 15.3%
========= ========= =====
Revenues:
Net premiums earned $ 552,454 $ 456,939 20.9%
Net investment income 34,536 45,324 -23.8%
Net realized investment gains (losses) 8,177 (16,262) NM
Other revenues 9,266 7,414 25.0%
--------- --------- -----
Total revenues 604,433 493,415 22.5%
--------- --------- -----
Expenses:
Losses and loss adjustment expenses 389,191 331,284 17.5%
Acquisition expenses 127,508 100,540 26.8%
Operating expenses 44,860 39,227 14.4%
Dividends to policyholders 4,090 6,007 -31.9%
Interest expense 3,983 1,099 262.4%
--------- --------- -----
Total losses and expenses 569,632 478,157 19.1%
--------- --------- -----
Pre-tax income - ongoing operations 34,801 15,258 128.1%
--------- --------- -----
Income tax expense:
Current 221 -- NM
Deferred 12,118 5,456 122.1%
--------- --------- -----
Total income tax expense 12,339 5,456 126.2%
--------- --------- -----
Income from ongoing operations 22,462 9,802 129.2%
Income (loss) from Run-off Operations 1, net of tax 407 (56,798) NM
--------- --------- -----
Net income (loss) $ 22,869 $ (46,996) NM
========= ========= =====
Pre-tax operating income - ongoing operations $ 26,624 $ 31,520 -15.5%
========= ========= =====
After-tax operating income - ongoing operations $ 17,147 $ 20,373 -15.8%
========= ========= =====
Note: The information on this page is presented for informational purposes
only and is not in conformity with GAAP. See the note on the Table of
Contents page for additional information regarding the pro forma
presentation.
1 Formerly known as Caliber One.
PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
--------------- -------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
------------------------------------------------------------------------------
Assets:
Investments in fixed maturities available for sale $ 1,409,827 $ 1,509,862 $ 1,529,924 $ 1,641,593 $ 1,741,879
Short-term investments 259,075 200,403 298,686 199,782 282,366
Short-term investments, loaned securities collateral 247,791 214,087 - 108,513 185,566
Cash 9,493 14,404 43,853 4,635 12,556
--------------- ------------- --------------- ------------------------------
Total investments and cash 1,926,186 1,938,756 1,872,463 1,954,523 2,222,367
Accrued investment income 20,105 21,405 18,600 22,426 19,357
Premiums receivable 383,323 376,293 363,675 457,528 394,065
Reinsurance receivables 1,350,211 1,260,399 1,295,083 1,314,103 1,307,506
Deferred income taxes 107,051 86,672 94,074 88,410 70,928
Deferred acquisition costs 83,683 87,236 89,222 103,275 108,740
Funds held by reinsureds 148,104 159,750 157,479 168,597 165,533
Other assets 195,902 185,943 215,198 222,595 249,110
--------------- ------------- --------------- --------------- -------------
Total assets $ 4,214,565 $ 4,116,454 $ 4,105,794 $ 4,331,457 $ 4,537,606
=============== ============= =============== =============== =============
Liabilities:
Unpaid losses and loss adjustment expenses $ 2,394,229 $ 2,304,309 $ 2,449,890 $ 2,448,147 $ 2,430,276
Unearned premiums 439,003 442,485 405,379 484,789 499,960
Debt 62,500 55,000 151,250 131,250 176,250
Accounts payable, accrued expenses
and other liabilities 251,271 232,688 253,175 281,920 301,049
Funds held under reinsurance treaties 236,102 255,950 249,670 273,469 311,081
Dividends to policyholders 18,205 16,755 14,998 14,981 15,669
Payable under securities loan agreements 253,354 215,394 42 108,533 185,574
--------------- ------------- --------------- --------------- -------------
Total liabilities 3,654,664 3,522,581 3,524,404 3,743,089 3,919,859
--------------- ------------- --------------- --------------- -------------
Shareholders' Equity:
Class A Common stock 171,090 171,090 171,090 171,090 171,090
Additional paid-in capital 109,331 109,331 109,331 109,331 109,331
Retained earnings 326,510 332,566 319,014 326,425 335,304
Accumulated other comprehensive income 5,766 33,483 34,552 34,119 54,621
Notes receivable from officers (61) (62) (62) (62) (64)
Treasury stock, at cost (52,735) (52,535) (52,535) (52,535) (52,535)
--------------- ------------- --------------- --------------- -------------
Total shareholders' equity 559,901 593,873 581,390 588,368 617,747
--------------- ------------- --------------- --------------- -------------
Total liabilities and shareholders' equity $ 4,214,565 $ 4,116,454 $ 4,105,794 $ 4,331,457 $ 4,537,606
=============== ============= =============== =============== =============
--------------- -------------
6
PMA Capital Corporation
Invested Assets & Net Investment Income
(Dollars in Thousands)
------------------
2nd 3rd 4th 1st
Quarter Quarter Quarter Quarter
2002 2002 2002 2003
--------------------------------------------------------------------------------
Total Investments & Cash
As Reported $ 1,926,186 $ 1,938,756 $ 1,872,463 $ 1,954,523
Less:
Securities Lending Activity 253,354 215,394 42 108,533
Unrealized Gain 8,278 50,437 51,172 51,031
------------------ ----------------- ----------------- -----------------
Total Adjusted Investments & Cash $ 1,664,554 $ 1,672,925 $ 1,821,249 $ 1,794,959
================== ================= ================= =================
Net Investment Income
As Reported $ 23,200 $ 18,087 $ 21,008 $ 17,645
Funds Held:
Assumed 4,386 16 5,997 1,036
Ceded (4,140) (3,492) (5,740) (3,859)
------------------ ----------------- ----------------- -----------------
Total Funds Held 246 (3,476) 257 (2,823)
------------------ ----------------- ----------------- -----------------
Total Adjusted Investment Income $ 22,954 $ 21,563 $ 20,751 $ 20,468
================== ================= ================= =================
Yield
As Reported 4.85% 3.75% 4.49% 3.69%
Investment Portfolio 5.42% 5.18% 4.56% 4.53%
Duration (in years) 3.9 3.8 3.5 3.8
------------------ -----------------
----------------- -----------------
2nd Six Six
Quarter Months Months
2003 2003 2002
----------------- ----------------- -----------------
Total Investments & Cash $ 2,222,367 $ 2,222,367 $ 1,926,186
As Reported
Less: 185,574 185,574 253,354
Securities Lending Activity 81,025 81,025 8,278
Unrealized Gain ----------------- ----------------- -----------------
$ 1,955,768 $ 1,955,768 $ 1,664,554
Total Adjusted Investments & Cas ================= ================= =================
Net Investment Income $ 17,780 $ 35,425 $ 45,786
As Reported
Funds Held: 1,940 2,976 8,860
Assumed (3,567) (7,426) (8,530)
Ceded ----------------- ----------------- -----------------
(1,627) (4,450) 330
Total Funds Held ----------------- ----------------- -----------------
$ 19,407 $ 39,875 $ 45,456
Total Adjusted Investment Income ================= ================= =================
Yield 3.41% 3.51% 4.89%
As Reported 4.14% 4.29% 5.29%
Investment Portfolio
3.8 3.8 3.9
Duration (in years)
----------------- -----------------
7
PMA Capital Corporation
Statements of Operations - Consolidating
Six Months Ended June 30, 2003
(In Thousands)
--------------------
PMA Ongoing
Insurance Insurance Corporate
PMA Re Group Operations & Other1
----------------------------------------------------------------------------------------
Gross Premiums Written $ 433,979 $ 347,689 $ 781,668 $ (380)
==================== ===================== ==================== ====================
Net Premiums Written $ 331,043 $ 313,679 $ 644,722 $ (380)
==================== ===================== ==================== ====================
Revenues:
Net premiums earned $ 302,243 $ 250,591 $ 552,834 $ (380)
Net investment income 17,042 16,474 33,516 1,020
Other revenues - 9,008 9,008 258
-------------------- --------------------- -------------------- --------------------
Operating revenues 319,285 276,073 595,358 898
-------------------- --------------------- -------------------- --------------------
Losses and Expenses:
Losses and loss adjustment expenses 205,955 183,236 389,191 -
Acquisition expenses 85,102 42,406 127,508 -
Operating expenses 6,544 31,163 37,707 7,153
Dividends to policyholders - 4,090 4,090 -
-------------------- --------------------- -------------------- --------------------
Total losses and expenses 297,601 260,895 558,496 7,153
-------------------- --------------------- -------------------- --------------------
Operating income (loss) before income taxes
and interest expense 21,684 15,178 36,862 (6,255)
Interest expense - - - 3,983
-------------------- --------------------- -------------------- --------------------
Pre-tax operating income (loss) $ 21,684 $ 15,178 $ 36,862 $ (10,238)
==================== ===================== ==================== ====================
--------------------
Net realized investment gains
Pre-tax income
--------------------- ----------------------
Ongoing Run-off
Operations Operations2 Consolidated
--------------------------------------------------------------------
Gross Premiums Written $ 781,288 $ 305 $ 781,593
===================== ==================== ======================
Net Premiums Written $ 644,342 $ (2,828) $ 641,514
===================== ==================== ======================
Revenues:
Net premiums earned $ 552,454 $ 7,238 $ 559,692
Net investment income 34,536 889 35,425
Other revenues 9,266 2,500 11,766
--------------------- -------------------- ----------------------
Operating revenues 596,256 10,627 606,883
--------------------- -------------------- ----------------------
Losses and Expenses:
Losses and loss adjustment expenses 389,191 6,468 395,659
Acquisition expenses 127,508 927 128,435
Operating expenses 44,860 3,234 48,094
Dividends to policyholders 4,090 - 4,090
--------------------- -------------------- ----------------------
Total losses and expenses 565,649 10,629 576,278
--------------------- -------------------- ----------------------
Operating income (loss) before income taxes
and interest expense 30,607 (2) 30,605
Interest expense 3,983 - 3,983
--------------------- -------------------- ----------------------
Pre-tax operating income (loss) $ 26,624 $ (2) 26,622
===================== ====================
---------------------
Net realized investment gains 8,806
----------------------
Pre-tax income $ 35,428
======================
----------------------
<FN>
1 Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
2 Formerly known as Caliber One.
</FN>
8
PMA Capital Corporation
Statements of Operations - Consolidating
Six Months Ended June 30, 2002
(In Thousands)
--------------------
PMA Ongoing
Insurance Insurance Corporate
PMA Re Group Operations & Other1
----------------------------------------------------------------------------------------
Gross Premiums Written $ 388,474 $ 292,936 $ 681,410 $ (433)
=================== ===================== ==================== ====================
Net Premiums Written $ 299,307 $ 260,100 $ 559,407 $ (433)
=================== ===================== ==================== ====================
Revenues:
Net premiums earned $ 251,032 $ 206,340 $ 457,372 $ (433)
Net investment income 27,909 18,031 45,940 (616)
Other revenues - 6,898 6,898 516
------------------- --------------------- -------------------- --------------------
Operating revenues 278,941 231,269 510,210 (533)
------------------- --------------------- -------------------- --------------------
Losses and Expenses:
Losses and loss adjustment expenses 178,856 152,428 331,284 -
Acquisition expenses 64,458 36,082 100,540 -
Operating expenses 8,921 23,958 32,879 6,348
Dividends to policyholders - 6,007 6,007 -
------------------- --------------------- -------------------- --------------------
Total losses and expenses 252,235 218,475 470,710 6,348
------------------- --------------------- -------------------- --------------------
Operating income (loss) before income taxes
and interest expense 26,706 12,794 39,500 (6,881)
Interest expense - - - 1,099
------------------- --------------------- -------------------- --------------------
Pre-tax operating income (loss) $ 26,706 $ 12,794 $ 39,500 $ (7,980)
=================== ===================== ==================== ====================
--------------------
Net realized investment losses
Pre-tax loss
--------------------- ----------------------
Ongoing Run-off
Operations Operations2 Consolidated
--------------------------------------------------------------------
Gross Premiums Written $ 680,977 $ 99,960 $ 780,937
===================== ==================== ======================
Net Premiums Written $ 558,974 $ 32,170 $ 591,144
===================== ==================== ======================
Revenues:
Net premiums earned $ 456,939 $ 17,535 $ 474,474
Net investment income 45,324 462 45,786
Other revenues 7,414 - 7,414
--------------------- -------------------- ----------------------
Operating revenues 509,677 17,997 527,674
--------------------- -------------------- ----------------------
Losses and Expenses:
Losses and loss adjustment expenses 331,284 60,943 392,227
Acquisition expenses 100,540 5,272 105,812
Operating expenses 39,227 39,277 78,504
Dividends to policyholders 6,007 - 6,007
--------------------- -------------------- ----------------------
Total losses and expenses 477,058 105,492 582,550
--------------------- -------------------- ----------------------
Operating income (loss) before income taxes
and interest expense 32,619 (87,495) (54,876)
Interest expense 1,099 - 1,099
--------------------- -------------------- ----------------------
Pre-tax operating income (loss) $ 31,520 $ (87,495) (55,975)
===================== ====================
---------------------
Net realized investment losses (16,160)
----------------------
Pre-tax loss $ (72,135)
======================
----------------------
<FN>
1 Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
2 Formerly known as Caliber One.
</FN>
9
PMA Capital Corporation
Insurance Ratios
Six Months Ended June 30, 2003
----------------------
PMA Ongoing
Insurance Insurance
PMA Re Group1 Operations
---------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 68.1% 73.1% 70.4%
--------------------- --------------------- ----------------------
Expense ratio:
Acquisition expenses 28.2% 16.9% 23.1%
Operating expenses 2.2% 10.0% 5.7%
--------------------- --------------------- ----------------------
Total expense ratio 30.4% 26.9% 28.8%
--------------------- --------------------- ----------------------
Policyholders' dividend ratio NA 1.6% 0.7%
--------------------- --------------------- ----------------------
Combined ratio 98.5% 101.6% 99.9%
===================== ===================== ======================
Net investment income ratio -5.6% -6.6% -6.1%
--------------------- --------------------- ----------------------
Operating ratio 92.9% 95.0% 93.8%
===================== ===================== ======================
----------------------
<FN>
1 The operating expense ratio and the combined ratio are computed based on $25.0
million of insurance-related operating expenses.
</FN>
10
PMA Capital Corporation
Insurance Ratios
Six Months Ended June 30, 2002
----------------------
PMA Ongoing
Insurance Insurance
PMA Re Group1 Operations
---------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 71.2% 73.9% 72.5%
--------------------- --------------------- ----------------------
Expense ratio:
Acquisition expenses 25.7% 17.5% 22.0%
Operating expenses 3.5% 9.1% 6.1%
--------------------- --------------------- ----------------------
Total expense ratio 29.2% 26.6% 28.1%
--------------------- --------------------- ----------------------
Policyholders' dividend ratio NA 2.9% 1.3%
--------------------- --------------------- ----------------------
Combined ratio 100.4% 103.4% 101.9%
===================== ===================== ======================
Net investment income ratio -11.1% -8.7% -10.0%
--------------------- --------------------- ----------------------
Operating ratio 89.3% 94.7% 91.9%
===================== ===================== ======================
----------------------
<FN>
1 The operating expense ratio and the combined ratio are computed based on $18.8
million of insurance-related operating expenses.
</FN>
11
PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended June 30, 2003
(In Thousands)
--------------------
PMA Ongoing
Insurance Insurance Corporate
PMA Re Group Operations & Other1
---------------------------------------------------------------------------------------
Gross Premiums Written $ 227,860 $ 133,968 $ 361,828 $ (124)
==================== ==================== ==================== ====================
Net Premiums Written $ 172,464 $ 119,440 $ 291,904 $ (124)
==================== ==================== ==================== ====================
Revenues:
Net premiums earned $ 151,004 $ 134,350 $ 285,354 $ (124)
Net investment income 8,611 8,203 16,814 438
Other revenues - 4,577 4,577 189
-------------------- -------------------- -------------------- --------------------
Operating revenues 159,615 147,130 306,745 503
-------------------- -------------------- -------------------- --------------------
Losses and Expenses:
Losses and loss adjustment expenses 93,280 99,201 192,481 -
Acquisition expenses 49,329 22,824 72,153 -
Operating expenses 3,899 16,213 20,112 3,842
Dividends to policyholders - 2,054 2,054 -
-------------------- -------------------- -------------------- --------------------
Total losses and expenses 146,508 140,292 286,800 3,842
-------------------- -------------------- -------------------- --------------------
Operating income (loss) before income taxes
and interest expense 13,107 6,838 19,945 (3,339)
Interest expense - - - 2,225
-------------------- -------------------- -------------------- --------------------
Pre-tax operating income (loss) $ 13,107 $ 6,838 $ 19,945 $ (5,564)
==================== ==================== ==================== ====================
--------------------
Net realized investment gains
Pre-tax income
--------------------- ----------------------
Ongoing Run-off
Operations Operations2 Consolidated
-------------------------------------------------------------------
Gross Premiums Written $ 361,704 $ 195 $ 361,899
===================== =================== ======================
Net Premiums Written
$ 291,780 $ (1,124) $ 290,656
===================== =================== ======================
Revenues:
Net premiums earned
Net investment income $ 285,230 $ 392 $ 285,622
Other revenues 17,252 528 17,780
4,766 - 4,766
Operating revenues --------------------- ------------------- ----------------------
307,248 920 308,168
--------------------- ------------------- ----------------------
Losses and Expenses:
Losses and loss adjustment expenses
Acquisition expenses 192,481 593 193,074
Operating expenses 72,153 62 72,215
Dividends to policyholders 23,954 268 24,222
2,054 - 2,054
Total losses and expenses --------------------- ------------------- ----------------------
290,642 923 291,565
--------------------- ------------------- ----------------------
Operating income (loss) before income taxes
and interest expense
16,606 (3) 16,603
Interest expense
2,225 - 2,225
--------------------- ------------------- ----------------------
Pre-tax operating income (loss)
$ 14,381 $ (3) 14,378
===================== ===================
Net realized investment gains
---------------------
4,451
Pre-tax income ----------------------
$ 18,829
======================
----------------------
<FN>
1 Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
2 Formerly known as Caliber One.
</FN>
12
PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended June 30, 2002
(In Thousands)
------------ ------------ ------------
PMA Ongoing
Insurance Insurance Corporate Ongoing Run-off
PMA Re Group Operations & Other1 Operations Operations Consolidated
--------------------------------------------------------------------------------------------
Gross Premiums Written $ 252,781 $ 97,451 $ 350,232 $ (215) $ 350,017 $ 43,112 $ 393,129
============= =========== ============ ============ ============= =========== ============
Net Premiums Written $ 208,982 $ 83,647 $ 292,629 $ (215) $ 292,414 $ 10,089 $ 302,503
============= =========== ============ ============ ============= =========== ============
Revenues:
Net premiums earned $ 168,991 $ 100,689 $ 269,680 $ (215) $ 269,465 $ 5,335 $ 274,800
Net investment income 14,142 9,193 23,335 (374) 22,961 239 23,200
Other revenues - 3,309 3,309 382 3,691 - 3,691
------------- ----------- ------------ ------------ ------------- ----------- ------------
Operating revenues 183,133 113,191 296,324 (207) 296,117 5,574 301,691
------------- ----------- ------------ ------------ ------------- ----------- ------------
Losses and Expenses:
Losses and loss adjustment expenses 121,432 74,447 195,879 - 195,879 10,130 206,009
Acquisition expenses 43,557 17,567 61,124 - 61,124 3,194 64,318
Operating expenses 4,375 12,387 16,762 2,968 19,730 36,657 56,387
Dividends to policyholders - 2,403 2,403 - 2,403 - 2,403
------------- ----------- ------------ ------------ ------------- ----------- ------------
Total losses and expenses 169,364 106,804 276,168 2,968 279,136 49,981 329,117
------------- ----------- ------------ ------------ ------------- ----------- ------------
Operating income (loss)
before income taxes
and interest expense 13,769 6,387 20,156 (3,175) 16,981 (44,407) (27,426)
Interest expense - - - 572 572 - 572
------------- ----------- ------------ ------------ ------------- ----------- ------------
Pre-tax operating income (loss) $ 13,769 $ 6,387 $ 20,156 $ (3,747) $ 16,409 $ (44,407) (27,998)
============= =========== ============ ============ ============= ===========
------------ -------------
Net realized investment losses (17,552)
------------
Pre-tax loss $ (45,550)
=============
<FN>
1 Corporate & Other includes the effect of eliminating transactions between the various Insurance Operations.
2 Formerly known as Caliber One.
</FN>
13
PMA Capital Corporation
Insurance Ratios
Three Months Ended June 30, 2003
----------------------
PMA Ongoing
Insurance Insurance
PMA Re Group1 Operations
---------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 61.8% 73.8% 67.5%
--------------------- --------------------- ----------------------
Expense ratio:
Acquisition expenses 32.7% 17.0% 25.3%
Operating expenses 2.5% 9.6% 5.9%
--------------------- --------------------- ----------------------
Total expense ratio 35.2% 26.6% 31.2%
--------------------- --------------------- ----------------------
Policyholders' dividend ratio NA 1.5% 0.7%
--------------------- --------------------- ----------------------
Combined ratio 97.0% 101.9% 99.4%
===================== ===================== ======================
Net investment income ratio -5.7% -6.1% -5.9%
--------------------- --------------------- ----------------------
Operating ratio 91.3% 95.8% 93.5%
===================== ===================== ======================
----------------------
<FN>
1 The operating expense ratio and the combined ratio are computed based on $12.9
million of insurance-related operating expenses.
</FN>
14
PMA Capital Corporation
Insurance Ratios
Three Months Ended June 30, 2002
----------------------
PMA Ongoing
Insurance Insurance
PMA Re Group1 Operations
---------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 71.9% 73.9% 72.6%
--------------------- --------------------- ----------------------
Expense ratio:
Acquisition expenses 25.8% 17.4% 22.7%
Operating expenses 2.6% 9.4% 5.1%
--------------------- --------------------- ----------------------
Total expense ratio 28.4% 26.8% 27.8%
--------------------- --------------------- ----------------------
Policyholders' dividend ratio NA 2.4% 0.9%
--------------------- --------------------- ----------------------
Combined ratio 100.3% 103.1% 101.3%
===================== ===================== ======================
Net investment income ratio -8.4% -9.1% -8.7%
--------------------- --------------------- ----------------------
Operating ratio 91.9% 94.0% 92.6%
===================== ===================== ======================
----------------------
<FN>
1 The operating expense ratio and the combined ratio are computed based on $9.5
million of insurance-related operating expenses.
</FN>
15
PMA Capital Corporation
Statements of Operations - PMA Re
(Dollar Amounts in Thousands)
---------------- -----------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
-------------------------------------------------------------------------------------------------
Gross Premiums Written $ 252,781 $ 186,499 $ 201,814 $ 206,119 $ 227,860
================ ================= ================= ================== =================
Net Premiums Written $ 208,982 $ 153,862 $ 185,870 $ 158,579 $ 172,464
================ ================= ================= ================== =================
Revenues:
Net premiums earned $ 168,991 $ 135,511 $ 164,970 $ 151,239 $ 151,004
Net investment income 14,142 9,239 11,588 8,431 8,611
---------------- ----------------- ----------------- ------------------ -----------------
Operating revenues 183,133 144,750 176,558 159,670 159,615
---------------- ----------------- ----------------- ------------------ -----------------
Losses and Expenses:
Losses and loss adjustment expenses 121,432 92,574 167,798 112,675 93,280
Acquisition expenses 43,557 33,679 36,009 35,773 49,329
Operating expenses 4,375 3,301 1,231 2,645 3,899
---------------- ----------------- ----------------- ------------------ -----------------
Total losses and expenses 169,364 129,554 205,038 151,093 146,508
---------------- ----------------- ----------------- ------------------ -----------------
Pre-tax operating income (loss) $ 13,769 $ 15,196 $ (28,480) $ 8,577 $ 13,107
================ ================= ================= ================== =================
---------------- -----------------
-----------------
Six Six % Change % Change
Months Months 2nd Six
2003 2002 Quarter Months
--------------------------------------------------------------------------------
Gross Premiums Written $ 433,979 $ 388,474 -9.9% 11.7%
================= ================= ================= =================
Net Premiums Written $ 331,043 $ 299,307 -17.5% 10.6%
================= ================= ================= =================
Revenues:
Net premiums earned $ 302,243 $ 251,032 -10.6% 20.4%
Net investment income 17,042 27,909 -39.1% -38.9%
----------------- ----------------- ----------------- -----------------
Operating revenues 319,285 278,941 -12.8% 14.5%
----------------- ----------------- ----------------- -----------------
Losses and Expenses:
Losses and loss adjustment expenses 205,955 178,856 -23.2% 15.2%
Acquisition expenses 85,102 64,458 13.3% 32.0%
Operating expenses 6,544 8,921 -10.9% -26.6%
----------------- ----------------- ----------------- -----------------
Total losses and expenses 297,601 252,235 -13.5% 18.0%
----------------- ----------------- ----------------- -----------------
Pre-tax operating income (loss) $ 21,684 $ 26,706 -4.8% -18.8%
================= ================= ================= =================
-----------------
16
PMA Capital Corporation
Insurance Ratios - PMA Re
----------------- -----------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
----------------------------------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 71.9% 68.3% 101.7% 74.5% 61.8%
----------------- ----------------- ----------------- ------------------ -----------------
Expense ratio:
Acquisition expenses 25.8% 24.9% 21.8% 23.7% 32.7%
Operating expenses 2.6% 2.4% 0.8% 1.7% 2.5%
----------------- ----------------- ----------------- ------------------ -----------------
Total expense ratio 28.4% 27.3% 22.6% 25.4% 35.2%
----------------- ----------------- ----------------- ------------------ -----------------
Combined ratio 100.3% 95.6% 124.3% 99.9% 97.0%
================= ================= ================= ================== =================
Net investment income ratio -8.4% -6.8% -7.0% -5.6% -5.7%
----------------- ----------------- ----------------- ------------------ -----------------
Operating ratio 91.9% 88.8% 117.3% 94.3% 91.3%
================= ================= ================= ================== =================
----------------- -----------------
-----------------
Six Six Point Chg. Point Chg.
Months Months 2nd Quarter Six Months
2003 2002 Better (Worse) Better (Worse)
------------------------------------------------------------------------------
Ratios - GAAP Basis: 68.1% 71.2% 10.1 3.1
----------------- ----------------- ----------------- -----------------
Loss and LAE ratio
28.2% 25.7% (6.9) (2.5)
2.2% 3.5% 0.1 1.3
Expense ratio: ----------------- ----------------- ----------------- -----------------
Acquisition expenses 30.4% 29.2% (6.8) (1.2)
Operating expenses ----------------- ----------------- ----------------- -----------------
Total expense ratio 98.5% 100.4% 3.3 1.9
================= ================= ================= =================
Combined ratio -5.6% -11.1% (2.7) (5.5)
----------------- ----------------- ----------------- -----------------
Net investment income ratio 92.9% 89.3% 0.6 (3.6)
================= ================= ================= =================
Operating ratio -----------------
17
PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
------------------ -------------- ---------------
2nd 3rd 4th 1st 2nd Six
Quarter Quarter Quarter Quarter Quarter Months
2002 2002 2002 2003 2003 2003
-------------------------------------------------------------------------------------------
Gross Premiums Written $ 97,451 $ 130,510 $ 91,886 $ 213,721 $ 133,968 $ 347,689
================== ============= ============= ============= ============== ===============
Net Premiums Written $ 83,647 $ 118,627 $ 73,549 $ 194,239 $ 119,440 $ 313,679
================== ============= ============= ============= ============== ===============
Revenues:
Net premiums earned $ 100,689 $ 103,190 $ 100,736 $ 116,241 $ 134,350 $ 250,591
Net investment income 9,193 8,971 8,611 8,271 8,203 16,474
Other revenues 3,309 3,989 3,807 4,431 4,577 9,008
------------------ ------------- ------------- ------------- -------------- ---------------
Operating revenues 113,191 116,150 113,154 128,943 147,130 276,073
------------------ ------------- ------------- ------------- -------------- ---------------
Losses and Expenses:
Losses and loss adjustment expenses 74,447 78,121 77,185 84,035 99,201 183,236
Acquisition expenses 17,567 18,039 17,753 19,582 22,824 42,406
Operating expenses 12,387 11,807 12,267 14,950 16,213 31,163
Dividends to policyholders 2,403 1,469 111 2,036 2,054 4,090
------------------ ------------- ------------- ------------- -------------- ---------------
Total losses and expenses 106,804 109,436 107,316 120,603 140,292 260,895
------------------ ------------- ------------- ------------- -------------- ---------------
Pre-tax operating income $ 6,387 $ 6,714 $ 5,838 $ 8,340 $ 6,838 $ 15,178
================== ============= ============= ============= ============== ===============
------------------ -------------- ---------------
Six % Change % Change
Months 2nd Six
2002 Quarter Months
-------------------------------------------------------------
Gross Premiums Written $ 292,936 37.5% 18.7%
=============== =================== ===================
Net Premiums Written $ 260,100 42.8% 20.6%
=============== =================== ===================
Revenues:
Net premiums earned $ 206,340 33.4% 21.4%
Net investment income 18,031 -10.8% -8.6%
Other revenues 6,898 38.3% 30.6%
--------------- ------------------- -------------------
Operating revenues 231,269 30.0% 19.4%
--------------- ------------------- -------------------
Losses and Expenses:
Losses and loss adjustment expenses 152,428 33.3% 20.2%
Acquisition expenses 36,082 29.9% 17.5%
Operating expenses 23,958 30.9% 30.1%
Dividends to policyholders 6,007 -14.5% -31.9%
--------------- ------------------- -------------------
Total losses and expenses 218,475 31.4% 19.4%
--------------- ------------------- -------------------
Pre-tax operating income $ 12,794 7.1% 18.6%
=============== =================== ===================
18
PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
----------------- -----------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
-----------------------------------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 73.9% 75.7% 76.6% 72.3% 73.8%
----------------- ----------------- ----------------- ----------------- -----------------
Expense ratio:
Acquisition expenses 17.4% 17.5% 17.6% 16.8% 17.0%
Operating expenses 1 9.4% 8.4% 9.2% 10.4% 9.6%
----------------- ----------------- ----------------- ----------------- -----------------
Total expense ratio 26.8% 25.9% 26.8% 27.2% 26.6%
----------------- ----------------- ----------------- ----------------- -----------------
Policyholders' dividend ratio 2.4% 1.4% 0.1% 1.8% 1.5%
----------------- ----------------- ----------------- ----------------- -----------------
Combined ratio 103.1% 103.0% 103.5% 101.3% 101.9%
================= ================= ================= ================= =================
Net investment income ratio -9.1% -8.7% -8.5% -7.1% -6.1%
----------------- ----------------- ----------------- ----------------- -----------------
Operating ratio 94.0% 94.3% 95.0% 94.2% 95.8%
================= ================= ================= ================= =================
----------------- -----------------
Management Corp. Expenses: 12,387 11,807 12,267 14,950 16,213
2,882 3,127 3,015 2,866 3,338
9,505 8,680 9,252 12,084 12,875
------------------
Six Six Point Chg. Point Chg.
Months Months 2nd Quarter Six Months
2003 2002 Better (Worse) Better (Worse)
----------------------------------------------------------------------------------------
Ratios - GAAP Basis: 73.1% 73.9% 0.1 0.8
------------------ ------------------ ------------------- -------------------
Loss and LAE ratio
16.9% 17.5% 0.4 0.6
10.0% 9.1% (0.2) (0.9)
Expense ratio: ------------------ ------------------ ------------------- -------------------
Acquisition expenses 26.9% 26.6% 0.2 (0.3)
Operating expenses 1 ------------------ ------------------ ------------------- -------------------
Total expense ratio 1.6% 2.9% 0.9 1.3
------------------ ------------------
------------------- -------------------
Policyholders' dividend ratio 101.6% 103.4% 1.2 1.8
================== ================== =================== ===================
Combined ratio -6.6% -8.7% (3.0) (2.1)
------------------ ------------------ ------------------- -------------------
95.0% 94.7% (1.8) (0.3)
Net investment income ratio ================== ================== =================== ===================
Operating ratio ------------------
31,163 23,958
Management Corp. Expenses: 6,204 5,180
24,959 18,778
<FN>
1 The operating expense ratio equals insurance-related operating expenses
divided by net premiums earned. Insurance-related operating expenses were
$9.5 million, $8.7 million, $9.3 million, $12.1 million and $12.9 million for
the second, third and fourth quarters of 2002 and the first and second
quarters of 2003, respectively.
</FN>
19
PMA Capital Corporation
Statements of Operations - Run-off Operations 1
(Dollar Amounts in Thousands)
--------------- -----------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
--------------------------------------------------------------------------------------------
Gross Premiums Written $ 43,112 $ 5,517 $ (169) $ 110 $ 195
=============== ================ ================= ================== =================
Net Premiums Written $ 10,089 $ (3,418) $ (14,189) $ (1,704) $ (1,124)
=============== ================ ================= ================== =================
Revenues:
Net premiums earned $ 5,335 $ 14,250 $ (1,672) $ 6,846 $ 392
Net investment income 239 114 564 361 528
Other revenues - - - 2,500 -
--------------- ---------------- ----------------- ------------------ -----------------
Operating revenues 5,574 14,364 (1,108) 9,707 920
--------------- ---------------- ----------------- ------------------ -----------------
Losses and Expenses:
Losses and loss adjustment expenses 10,130 10,038 5,715 5,875 593
Acquisition expenses 3,194 3,672 2,020 865 62
Operating expenses 36,657 656 (8,839) 2,966 268
--------------- ---------------- ----------------- ------------------ -----------------
Total losses and expenses 49,981 14,366 (1,104) 9,706 923
--------------- ---------------- ----------------- ------------------ -----------------
Pre-tax operating income (loss) $ (44,407) $ (2) $ (4) $ 1 $ (3)
=============== ================ ================= ================== =================
--------------- -----------------
1 Formerly known as Caliber One.
PMA Capital Corporation
Insurance Ratios - Run-off Operations 1
--------------- -----------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
--------------------------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio NM 70.4% NM 85.8% 151.3%
--------------- ---------------- ----------------- ------------------ -----------------
Expense ratio:
Acquisition expenses NM 25.8% NM 12.6% 15.8%
Operating expenses NM 4.6% NM 43.4% 68.4%
--------------- ---------------- ----------------- ------------------ -----------------
Total expense ratio NM 30.4% NM 56.0% 84.2%
--------------- ---------------- ----------------- ------------------ -----------------
Combined ratio NM 100.8% NM 141.8% 235.5%
=============== ================ ================= ================== =================
Net investment income ratio NM -0.8% NM -5.3% -134.7%
--------------- ---------------- ----------------- ------------------ -----------------
Operating ratio NM 100.0% NM 136.5% 100.8%
=============== ================ ================= ================== =================
--------------- -----------------
PMA Capital Corporation
Statements of Operations - Run-off Operations 1
(Dollar Amounts in Thousands)
---------------
Six Six % Change % Change
Months Months 2nd Six
2003 2002 Quarter Months
--------------------------------------------------------------------------
Gross Premiums Written $ 305 $ 99,960 -99.5% -99.7%
=============== ================ ================ ================
Net Premiums Written $ (2,828) $ 32,170 NM NM
=============== ================ ================ ================
Revenues:
Net premiums earned $ 7,238 $ 17,535 -92.7% -58.7%
Net investment income 889 462 120.9% 92.4%
Other revenues 2,500 - NM NM
--------------- ---------------- ---------------- ----------------
Operating revenues 10,627 17,997 -83.5% -41.0%
--------------- ---------------- ---------------- ----------------
Losses and Expenses:
Losses and loss adjustment expenses 6,468 60,943 -94.1% -89.4%
Acquisition expenses 927 5,272 -98.1% -82.4%
Operating expenses 3,234 39,277 -99.3% -91.8%
--------------- ---------------- ---------------- ----------------
Total losses and expenses 10,629 105,492 -98.2% -89.9%
--------------- ---------------- ---------------- ----------------
Pre-tax operating income (loss) $ (2) $ (87,495) 100.0% 100.0%
================ ================
=============== ================
---------------
PMA Capital Corporation
Insurance Ratios - Run-off Operations 1
---------------
Six Six Point Chg. Point Chg.
Months Months 2nd Quarter Six Months
2003 2002 Better (Worse) Better (Worse)
-------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 89.4% NM #VALUE! #VALUE!
--------------- ---------------- ---------------- ----------------
Expense ratio:
Acquisition expenses 12.8% NM #VALUE! #VALUE!
Operating expenses 44.7% NM #VALUE! #VALUE!
---------------
Total expense ratio 57.5% NM #VALUE! #VALUE!
---------------
---------------- ----------------
Combined ratio 146.9% NM #VALUE! #VALUE!
=============== ================ ================ ================
Net investment income ratio -12.3% NM #VALUE! #VALUE!
--------------- ---------------- ---------------- ----------------
Operating ratio 134.6% NM #VALUE! #VALUE!
=============== ================ ================ ================
---------------
1 Formerly known as Caliber One.
20
PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
------------------- -------------------
2nd 3rd 4th 1st 2nd
Quarter Quarter Quarter Quarter Quarter
2002 2002 2002 2003 2003
----------------------------------------------------------------------------------------------------------
Gross Premiums Written $ (215) $ (220) $ (10,228) $ (256) $ (124)
=================== =================== =================== =================== ===================
Net Premiums Written $ (215) $ (220) $ (228) $ (256) $ (124)
=================== =================== =================== =================== ===================
Revenues:
Net premiums earned $ (215) $ (220) $ (228) $ (256) $ (124)
Net investment income (374) (237) 245 582 438
Other revenues 382 68 52 69 189
------------------- ------------------- ------------------- ------------------- -------------------
Operating revenues (207) (389) 69 395 503
------------------- ------------------- ------------------- ------------------- -------------------
Losses and Expenses:
Operating expenses 2,968 2,303 1,578 3,311 3,842
------------------- ------------------- ------------------- ------------------- -------------------
Total losses and
expenses 2,968 2,303 1,578 3,311 3,842
------------------- ------------------- ------------------- ------------------- -------------------
Operating loss before
income taxes
and interest expense (3,175) (2,692) (1,509) (2,916) (3,339)
Interest expense 572 519 1,639 1,758 2,225
------------------- ------------------- ------------------- ------------------- -------------------
Pre-tax operating loss $ (3,747) $ (3,211) $ (3,148) $ (4,674) $ (5,564)
=================== =================== =================== =================== ===================
------------------- -------------------
-----------------
Six Six % Change % Change
Months Months 2nd Six
2003 2002 Quarter Months
----------------------------------------------------------------------------------
Gross Premiums Written $ (380) $ (433) 42.3% 12.2%
================= =================== ================== ===================
Net Premiums Written $ (380) $ (433) 42.3% 12.2%
================= =================== =================== ===================
Revenues:
Net premiums earned $ (380) $ (433) 42.3% 12.2%
Net investment income 1,020 (616) NM NM
Other revenues 258 516 -50.5% -50.0%
----------------- ------------------- ------------------- -------------------
Operating revenues 898 (533) NM NM
----------------- ------------------- ------------------- -------------------
Losses and Expenses:
Operating expenses 7,153 6,348 29.4% 12.7%
----------------- ------------------- ------------------- -------------------
Total losses and
expenses 7,153 6,348 29.4% 12.7%
----------------- ------------------- ------------------- -------------------
Operating loss before
income taxes
and interest expense (6,255) (6,881) -5.2% 9.1%
Interest expense 3,983 1,099 289.0% 262.4%
----------------- ------------------- ------------------- -------------------
Pre-tax operating loss $ (10,238) $ (7,980) -48.5% -28.3%
================= =================== =================== ===================
-----------------
21
PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)
-------------- ------------- -------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
-----------------------------------------------------------------------------------------------------
Receipts:
Premiums and other
revenues collected $ 307,403 $ 274,892 $ 272,335 $ 282,209 $ 408,514 $ 690,723 $ 533,075
Investment income received 28,175 19,367 24,706 20,108 27,434 47,542 48,134
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Total receipts 335,578 294,259 297,041 302,317 435,948 738,265 581,209
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Disbursements:
Losses and LAE paid:
Losses and LAE paid -
current year 30,858 39,288 59,147 6,787 35,305 42,092 39,692
Losses and LAE paid -
prior year 196,635 145,222 113,417 210,892 183,345 394,237 368,672
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Total losses and LAE paid 227,493 184,510 172,564 217,679 218,650 436,329 408,364
Insurance operating
expenses paid 83,465 70,963 67,197 86,945 115,052 201,997 159,473
Policyholders' dividends
paid 1,499 3,826 1,868 1,627 1,439 3,066 3,658
Interest on corporate
debt 258 989 239 2,484 502 2,986 863
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Total disbursements 312,715 260,288 241,868 308,735 335,643 644,378 572,358
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Net other (13,692) (13,914) 9,042 (4,358) 3,373 (985) (20,956)
-------------- -------------- -------------- -------------- ------------- ------------- -------------
Net operating cash flows $ 9,171 $ 20,057 $ 64,215 $ (10,776) $ 103,678 $ 92,902 $ (12,105)
============== ============== ============== ============== ============= ============= =============
-------------- ------------- -------------
22
PMA Capital Corporation
Pro Forma Operating Cash Flows - Consolidated
(In Thousands)
-------------- -------------- --------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
---------------------------------------------------------------------------------------------------------
Receipts:
Premiums and other
revenues collected $ 279,209 $ 280,055 $ 274,329 $ 283,187 $ 410,517 $ 693,704 $ 477,608
Investment income received 26,910 18,447 23,599 18,502 25,779 44,281 45,906
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Total receipts 306,119 298,502 297,928 301,689 436,296 737,985 523,514
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Disbursements:
Losses and LAE paid:
Losses and LAE paid -
current year 29,855 35,136 56,637 6,091 34,017 40,108 34,843
Losses and LAE paid -
prior year 177,087 133,334 98,909 199,139 164,380 363,519 337,305
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Total losses and LAE paid 206,942 168,470 155,546 205,230 198,397 403,627 372,148
Insurance operating
expenses paid 76,916 69,000 62,425 84,618 113,286 197,904 145,621
Policyholders' dividends
paid 1,499 3,826 1,868 1,627 1,439 3,066 3,658
Interest on corporate debt 258 989 239 2,484 502 2,986 863
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Total disbursements 285,615 242,285 220,078 293,959 313,624 607,583 522,290
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Net other (13,790) (4,507) 3,258 (4,432) 3,393 (1,039) (19,192)
-------------- -------------- -------------- ------------- -------------- -------------- -------------
Net operating cash flows $ 6,714 $ 51,710 $ 81,108 $ 3,298 $ 126,065 $ 129,363 $ (17,968)
============== ============== ============== ============= ============== ============== =============
-------------- -------------- --------------
Note: The information on this page is presented for informational purposes
only and is not in conformity with GAAP. See the note on the Table of
Contents page for additional information regarding the pro forma
presentation.
22A
PMA Capital Corporation
Operating Cash Flows - PMA Re
(In Thousands)
----------------- ------------- -------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
-----------------------------------------------------------------------------------------------------
Receipts:
Premiums collected $ 178,785 $ 151,233 $ 144,418 $ 162,598 $ 271,602 $ 434,200 $ 264,155
Investment income received 16,479 8,847 13,740 9,162 16,007 25,169 26,604
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Total receipts 195,264 160,080 158,158 171,760 287,609 459,369 290,759
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Disbursements:
Losses and LAE paid:
Losses and LAE paid -
current year 6,132 14,813 17,895 865 9,701 10,566 6,491
Losses and LAE paid -
prior year 113,214 73,100 58,008 115,870 104,331 220,201 188,222
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Total losses and LAE paid 119,346 87,913 75,903 116,735 114,032 230,767 194,713
Insurance operating
expenses paid 48,120 46,030 40,788 47,406 76,072 123,478 77,742
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Total disbursements 167,466 133,943 116,691 164,141 190,104 354,245 272,455
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Net other (16,819) (3,017) 13,613 660 8,572 9,232 (23,284)
----------------- ------------- ------------- ------------ ------------- ------------- --------------
Net operating cash flows $ 10,979 $ 23,120 $ 55,080 $ 8,279 $ 106,077 $ 114,356 $ (4,980)
================= ============= ============= ============ ============= ============= ==============
----------------- ------------- -------------
23
PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)
----------------- ------------- ------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
------------------------------------------------------------------------------------------------------
Receipts:
Premiums and other
revenues collected $ 100,424 $ 128,822 $ 129,911 $ 120,589 $ 138,915 $ 259,504 $ 213,453
Investment income received 10,431 9,600 9,859 9,340 9,772 19,112 19,302
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Total receipts 110,855 138,422 139,770 129,929 148,687 278,616 232,755
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Disbursements:
Losses and LAE paid:
Losses and LAE paid -
current year 23,723 20,323 38,742 5,226 24,316 29,542 28,352
Losses and LAE paid -
prior year 63,873 60,234 40,901 83,269 60,049 143,318 149,083
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Losses and LAE 87,596 80,557 79,643 88,495 84,365 172,860 177,435
Insurance operating
expenses paid 28,796 22,970 21,637 37,212 37,214 74,426 67,879
Policyholders' dividends
paid 1,499 3,826 1,868 1,627 1,439 3,066 3,658
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Total disbursements 117,891 107,353 103,148 127,334 123,018 250,352 248,972
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Net other 3,398 (6,244) 4,338 (5,052) (1,795) (6,847) 689
----------------- ------------- ------------- ------------- ------------- ------------ -------------
Net operating cash flows $ (3,638) $ 24,825 $ 40,960 $ (2,457) $ 23,874 $ 21,417 $ (15,528)
================= ============= ============= ============= ============= ============ =============
----------------- ------------- ------------
24
PMA Capital Corporation
Operating Cash Flows - Run-off Operations 1
(In Thousands)
------------ ------------ -------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 2003 2003 2002
----------------------------------------------------------------------------------------------
Receipts:
Net premiums collected (paid) $ 28,194 $ (5,163) $ (1,994) $ (978) $ (2,003) $ (2,981) $ 55,467
Investment income received 1,265 920 1,107 1,606 1,655 3,261 2,228
------------ ------------- ------------- ------------ ------------ ------------- ------------
Total receipts 29,459 (4,243) (887) 628 (348) 280 57,695
------------ ------------- ------------- ------------ ------------ ------------- ------------
Disbursements:
Losses and LAE paid:
Losses and LAE paid -
current year 1,003 4,152 2,510 696 1,288 1,984 4,849
Losses and LAE paid -
prior year 19,548 11,888 14,508 11,753 18,965 30,718 31,367
------------ ------------- ------------- ------------ ------------ ------------- ------------
Total losses and LAE paid 20,551 16,040 17,018 12,449 20,253 32,702 36,216
Insurance operating
expenses paid 6,549 1,963 4,772 2,327 1,766 4,093 13,852
------------ ------------- ------------- ------------ ------------ ------------- ------------
Total disbursements 27,100 18,003 21,790 14,776 22,019 36,795 50,068
------------ ------------- ------------- ------------ ------------ ------------- ------------
Net other 98 (9,407) 5,784 74 (20) 54 (1,764)
------------ ------------- ------------- ------------ ------------ ------------- ------------
Net operating cash flows $ 2,457 $ (31,653) $ (16,893) $ (14,074) $ (22,387) $ (36,461) $ 5,863
============ ============= ============= ============ ============ ============= ============
------------ ------------ -------------
<FN>
1 Formerly known as Caliber One.
</FN>
25
PMA Capital Corporation
Statutory Financial Information
(Dollars in Thousands)
-------------- ------------- -------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 20031 20031 2002
--------------------------------------------------------------------------------------------------
PMA Capital Insurance Company:
Net premiums written $ 219,952 $ 151,262 $ 164,377 $ 147,687 $ 160,985 $ 308,672 $ 325,841
============== ============= ============== ============= ============= ============= ============
Statutory Ratios:
Loss and LAE ratio 71.1% 68.7% 100.2% 74.0% 58.3% 66.2% 71.6%
Underwriting expense ratio 28.5% 27.4% 22.6% 25.2% 38.1% 32.0% 28.6%
-------------- ------------- -------------- ------------- ------------- ------------- ------------
Combined ratio 99.6% 96.1% 122.8% 99.2% 96.4% 98.2% 100.2%
============== ============= ============== ============= ============= ============= ============
Operating ratio 90.0% 93.3% 115.7% 89.2% 86.8% 88.4% 88.3%
============== ============= ============== ============= ============= ============= ============
- ----------------------------------------------------------------------------------------
PMA Pool 2:
Net premiums written $ 69,411 $ 104,516 $ 59,472 $ 175,680 $ 117,183 $ 292,863 $ 246,962
============== ============= ============== ============= ============= ============= ============
Statutory Ratios:
Loss and LAE ratio 74.2% 74.6% 77.5% 73.3% 73.6% 73.4% 74.7%
Underwriting expense ratio 28.3% 22.4% 39.6% 21.5% 28.5% 24.3% 23.6%
Policyholders' dividend ratio 2.9% 2.8% 0.1% 1.6% 1.6% 1.6% 2.5%
-------------- ------------- -------------- ------------- ------------- ------------- ------------
Combined ratio 105.4% 99.8% 117.2% 96.4% 103.7% 99.3% 100.8%
============== ============= ============== ============= ============= ============= ============
Operating ratio 94.7% 88.7% 107.1% 83.0% 97.9% 90.2% 91.1%
============== ============= ============== ============= ============= ============= ============
-------------- ------------- -------------
<FN>
1 Estimated.
2 The PMA Pool is comprised of Pennsylvania Manufacturers' Association
Insurance Company, Manufacturers Alliance Insurance Company and
Pennsylvania Manufacturers Indemnity Company.
</FN>
27
PMA Capital Corporation
Statutory Net Premiums Written by Product
(In Thousands)
--------------- ------------ -------------
2nd 3rd 4th 1st 2nd Six Six
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2002 2002 2003 20031 20031 2002
---------------------------------------------------------------------------------------------
PMA Capital Insurance Company:
Finite Risk and
Financial Products:
Property $ 43,397 $ 22,995 $ 12,223 $ 19,746 $ 33,063 $ 52,809 $ 64,453
Casualty 54,233 6,437 28,697 19,560 43,688 63,248 76,908
Other 4,378 4,738 4,778 1,806 1,977 3,783 9,491
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Subtotal - Finite Risk
and Financial Products 102,008 34,170 45,698 41,112 78,728 119,840 150,852
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Treaty Excess of Loss:
Property 4,837 23,717 23,199 14,864 9,883 24,747 12,227
Casualty 53,918 39,208 33,203 36,674 25,560 62,234 85,525
Other 572 1,555 3,021 2,833 5,067 7,900 948
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Subtotal - Treaty
Excess of Loss 59,327 64,480 59,423 54,371 40,510 94,881 98,700
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Treaty Pro-Rata:
Property 14,479 10,853 21,259 6,203 7,957 14,160 20,142
Casualty 36,596 37,026 34,637 39,378 27,319 66,697 45,364
Other (54) 138 83 97 67 164 (22)
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Subtotal - Treaty Pro-Rata 51,021 48,017 55,979 45,678 35,343 81,021 65,484
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Facultative:
Property 1,319 2,472 986 1,365 1,381 2,746 3,185
Casualty 6,277 2,123 2,291 5,161 5,023 10,184 7,620
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Subtotal - Facultative 7,596 4,595 3,277 6,526 6,404 12,930 10,805
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Total - PMA Capital
Insurance Company $ 219,952 $ 151,262 $ 164,377 $ 147,687 $ 160,985 $ 308,672 $ 325,841
=============== ============ ============ ============ ============ ============= ===========
- ------------------------------------------------------------------------------------------------------------------------
PMA Pool2:
Workers Compensation & Integrated
Disability $ 52,141 $ 95,943 $ 44,594 $ 147,425 $ 91,269 $ 238,694 $ 197,408
Other Commercial Lines 17,270 8,573 14,878 28,255 25,914 54,169 49,554
--------------- ------------ ------------ ------------ ------------ ------------- -----------
Total - PMA Pool $ 69,411 $ 104,516 $ 59,472 $ 175,680 $ 117,183 $ 292,863 $ 246,962
=============== ============ ============ ============ ============ ============= ===========
--------------- ------------ -------------
<FN>
1 Estimated.
2 The PMA Pool is comprised of Pennsylvania Manufacturers' Association
Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania
Manufacturers Indemnity Company.
</FN>
28
PMA Capital Corporation
Industry Ratings and Market Information
Transfer Agent and Registrar: Securities Listing:
Certificate Transfers and Conversions: The Corporation's Class A Common Stock is listed
The Bank of New York on the NASDAQ Stock Market?. It trades under
Receive and Deliver Department - 11 W the stock symbol: PMACA.
P.O. Box 11002
Church Street Station Inquiries:
New York, NY 10286 Albert Ciavardelli
Vice President - Finance
Written Inquiries: 215.665.5063
The Bank of New York e-mail: aciavardelli@pmacapital.com
Shareholder Relations Department - 11 E
P.O. Box 11258 William E. Hitselberger
Church Street Station Chief Financial Officer
New York, NY 10286 215.665.5070
e-mail: bhitselberger@pmacapital.com
Phone Inquiries:
800.524.4458 Company Website:
http://www.pmacapital.com
Email Inquiries:
shareowner-svcs@bankofny.com
- -----------------------------------------------------------------------------------------------------------------------------
Financial Strength Ratings (as of 8/4/2003):
A.M. Best S&P Moody's
------------------- ------------------ --------------------
PMA Capital Insurance Company A- (Excellent) A- (Strong) Baa1 (Adequate)
PMA Pool 1 A- (Excellent) A- (Strong) Baa1 (Adequate)
1 The PMA Pool is comprised of Pennsylvania Manufacturers' Association
Insurance Company, Manufacturers Alliance Insurance Company and Pennsylvania
Manufacturers Indemnity Company.
29