- -------------------------------------------------------------------------------------------------------------------------
PMA Capital Corporation
Statistical Supplement
Fourth Quarter - 2003
- ---------------------------------------------------------------------------------------------------------------------------
Table of Contents
-----------------
Page
Consolidated Highlights:
Selected Financial Data 1
Selected Financial Data - Full Year 2
Consolidated Statements of Operations - Per Share Data 3
Consolidated Statements of Operations 4
Consolidated Statements of Operations - Full Year 5
Consolidated Balance Sheets 6
Invested Assets and Net Investment Income, Debt, Other Assets and Liabilities 7
Segment Information:
Statements of Operations - Consolidating - Full Year 8 - 9
Insurance Ratios - Consolidating - Full Year 10 - 11
Statements of Operations - Consolidating - Fourth Quarter 12 - 13
Insurance Ratios - Consolidating - Fourth Quarter 14 - 15
Statements of Operations - PMA Insurance Group 16
Insurance Ratios - PMA Insurance Group 17
Statements of Operations - PMA Re 18
Insurance Ratios - PMA Re 19
Statements of Operations - Run-off Operations 20
Statements of Operations - Corporate & Other 21
Operating Cash Flow Information:
Operating Cash Flows - Consolidated 22
Operating Cash Flows - PMA Insurance Group 23
Operating Cash Flows - PMA Re 24
Operating Cash Flows - Run-off Operations 25
Statutory Financial Information:
Statutory Surplus and Statutory Financial Information 27
Other Information:
Industry Ratings and Market Information 28
Legend:
NM - Not Meaningful
NA - Not Applicable
Note: 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 and 2 for reconciliations of operating
results by segment to GAAP net income (loss).
PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
4th 1st 2nd 3rd 4th % Change
Quarter Quarter Quarter Quarter Quarter 4th
2002 2003 2003 2003 2003 Quarter
-----------------------------------------------------------------------------
Net Premiums Written by Segment:
PMA Insurance Group $ 73,549 $ 194,239 $ 119,440 $ 149,130 $ 140,784 91.4%
PMA Re 1 185,870 158,579 172,464 139,770 124,261 -33.1%
Run-off Operations 2 (14,189) (1,704) (1,124) (3,389) 592 NM
Corporate & Other (228) (256) (124) (228) (180) 21.1%
--------- --------- --------- --------- --------- ------
Net premiums written $ 245,002 $ 350,858 $ 290,656 $ 285,283 $ 265,457 8.3%
========= ========= ========= ========= ========= ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by
segment:
PMA Insurance Group $ 5,838 $ 8,340 $ 6,838 $ 7,345 $ (982) NM
PMA Re 1 (28,480) 8,577 13,107 (113,673) 12,556 NM
Run-off Operations 2 (4) 1 (3) 3 (819) NM
Corporate & Other (3,148) (4,674) (5,564) (6,259) (6,319) NM
--------- --------- --------- --------- --------- ------
Pre-tax operating income (loss) (25,794) 12,244 14,378 (112,584) 4,436 NM
Net realized investment gains 3,943 4,355 4,451 1,392 3,582 -9.2%
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) (21,851) 16,599 18,829 (111,192) 8,018 NM
Income tax expense (benefit) (11,448) 5,897 6,662 (14,786) 28,050 NM
--------- --------- --------- --------- --------- ------
Net income (loss) $ (10,403) $ 10,702 $ 12,167 $ (96,406) $ (20,032) -92.6%
========= ========= ========= ========= ========= ======
After-tax operating income (loss) $ (12,966) $ 7,871 $ 9,274 $ (97,311) $ (22,360) -72.5%
========= ========= ========= ========= ========= ======
Diluted Earnings (Loss) Per Share:
Net income (loss) $ (0.33) $ 0.34 $ 0.39 $ (3.08) $ (0.64) -93.9%
Less the impact of:
Realized gains after tax 0.08 0.09 0.09 0.03 0.07 -12.5%
--------- --------- --------- --------- --------- ------
After-tax operating income (loss) $ (0.41) $ 0.25 $ 0.30 $ (3.11) $ (0.71) -73.2%
========= ========= ========= ========= ========= ======
Capitalization:
Debt $ 151,250 $ 131,250 $ 176,250 $ 186,250 $ 187,566 24.0%
Shareholders' equity excluding
FAS 115 unrealized gain 548,128 555,198 565,081 465,943 432,284 -21.1%
--------- --------- --------- --------- --------- ------
Total capitalization excluding
FAS 115 unrealized gain 699,378 686,448 741,331 652,193 619,850 -11.3%
FAS 115 unrealized gain 33,262 33,170 52,666 37,830 31,383 -5.6%
--------- --------- --------- --------- --------- ------
Total capitalization including
FAS 115 unrealized gain $ 732,640 $ 719,618 $ 793,997 $ 690,023 $ 651,233 -11.1%
========= ========= ========= ========= ========= ======
Book Value Per Share:
Excluding FAS 115 unrealized gain $ 17.50 $ 17.72 $ 18.04 $ 14.87 $ 13.80 -21.1%
Including FAS 115 unrealized gain $ 18.56 $ 18.78 $ 19.72 $ 16.08 $ 14.80 -20.3%
Debt to Total Capital:
Excluding FAS 115 unrealized gain 21.6% 19.1% 23.8% 28.6% 30.2% 39.8%
Including FAS 115 unrealized gain 20.6% 18.2% 22.2% 27.0% 28.8% 39.8%
Interest Coverage:
Income before interest and income taxes
to interest expense NM 10.44 9.46 NM NM NM
Operating income before interest
and income taxes to interest expense NM 7.96 7.46 NM NM NM
1 On November 6, 2003 we announced our decision to withdraw from the reinsurance business previously served by PMA Re. This
segment is currently in run-off.
2 Formerly known as Caliber One.
1
PMA Capital Corporation
Selected Financial Data
(Dollar Amounts in Thousands, Except Per Share Data)
Twelve Twelve % Change
Months Months Twelve
2003 2002 Months
-------------------------------------
Net Premiums Written by Segment:
PMA Insurance Group $ 603,593 $ 452,276 33.5%
PMA Re 1 595,074 639,039 -6.9%
Run-off Operations 2 (5,625) 14,563 NM
Corporate & Other (788) (881) 10.6%
----------- ----------- ------
Net premiums written $ 1,192,254 $ 1,104,997 7.9%
=========== =========== ======
Major Components of Net Income (Loss):
Pre-tax operating income (loss) by segment:
PMA Insurance Group $ 21,541 $ 25,346 -15.0%
PMA Re 1 (79,433) 13,422 NM
Run-off Operations 2 (818) (87,501) 99.1%
Corporate & Other (22,816) (14,339) -59.1%
----------- ----------- ------
Pre-tax operating loss (81,526) (63,072) -29.3%
Net realized investment gains (losses) 13,780 (16,085) NM
----------- ----------- ------
Pre-tax loss (67,746) (79,157) 14.4%
Income tax expense (benefit) 25,823 (31,133) NM
----------- ----------- ------
Net loss $ (93,569) $ (48,024) -94.8%
=========== =========== ======
After-tax operating loss $ (102,526) $ (37,569) NM
=========== =========== ======
Diluted Earnings (Loss) Per Share:
Net loss $ (2.99) $ (1.53) -95.4%
Less the impact of:
Realized gains (losses) after tax 0.28 (0.33) NM
----------- ----------- ------
After-tax operating loss $ (3.27) $ (1.20) NM
=========== =========== ======
1 On November 6, 2003 we announced our decision to withdraw from the reinsurance business previously served by PMA Re. This
segment is currently in run-off.
2 Formerly known as Caliber One.
2
PMA Capital Corporation
Consolidated Statements of Operations - Per Share Data
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
----------------------------------------------------------------------------------------------
Diluted Earnings (Loss) Per Share:
Net income (loss) $ (0.33) $ 0.34 $ 0.39 $ (3.08) $ (0.64) $ (2.99) $ (1.53)
============ ============ ============ ============ ============= =========== ============
Pre-tax operating income (loss) $ (0.82) $ 0.39 $ 0.46 $ (3.59) $ 0.14 $ (2.60) $ (2.02)
============ ============ ============ ============ ============= =========== ============
After-tax operating income (loss) $ (0.41) $ 0.25 $ 0.30 $ (3.11) $ (0.71) $ (3.27) $ (1.20)
============ ============ ============ ============ ============= =========== ============
Diluted weighted average common
shares outstanding 31,328,922 31,328,922 31,331,197 31,328,965 31,333,881 31,330,183 31,284,848
============ ============ ============ ============ ============= =========== ============
--------------------------------------------------------------------------------------------
Dividends declared:
Class A Common stock $ 0.105 $ 0.105 $ 0.105 $ 0.105 $ - $ 0.315 $ 0.42
Actual common shares issued
and outstanding 31,328,922 31,328,922 31,328,922 31,329,063 31,334,403 31,334,403 31,328,922
============ ============ ============ ============ ============= =========== ============
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Common Stock prices:
High $ 15.30 $ 15.00 $ 12.30 $ 12.85 $ 14.17 $ 15.00 $ 25.99
Low $ 12.37 $ 6.67 $ 6.44 $ 11.71 $ 3.97 $ 3.97 $ 12.37
Close $ 14.33 $ 6.77 $ 12.12 $ 12.53 $ 5.12 $ 5.12 $ 14.33
3
PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
4th 1st 2nd 3rd 4th % Change
Quarter Quarter Quarter Quarter Quarter 4th
2002 2003 2003 2003 2003 Quarter
----------------------------------------------------------------------
Gross Premiums Written $ 283,303 $ 419,694 $ 361,899 $ 352,380 $ 295,671 4.4%
========= ========= ========= ========= ========= ======
Net Premiums Written $ 245,002 $ 350,858 $ 290,656 $ 285,283 $ 265,457 8.3%
========= ========= ========= ========= ========= ======
Revenues:
Net premiums earned $ 263,806 $ 274,070 $ 285,622 $ 293,482 $ 344,991 30.8%
Net investment income 21,008 17,645 17,780 17,167 16,331 -22.3%
Net realized investment gains 3,943 4,355 4,451 1,392 3,582 -9.2%
Other revenues 3,859 7,000 4,766 4,147 4,466 15.7%
--------- --------- --------- --------- --------- ------
Total revenues 292,616 303,070 312,619 316,188 369,370 26.2%
--------- --------- --------- --------- --------- ------
Expenses:
Losses and loss adjustment expenses 250,698 202,585 193,074 335,789 266,899 6.5%
Acquisition expenses 55,782 56,220 72,215 63,221 64,790 16.1%
Operating expenses 6,237 23,872 24,222 23,327 32,251 NM
Dividends to policyholders 111 2,036 2,054 2,090 (5,539) NM
Interest expense 1,639 1,758 2,225 2,953 2,951 80.0%
--------- --------- --------- --------- --------- ------
Total losses and expenses 314,467 286,471 293,790 427,380 361,352 14.9%
--------- --------- --------- --------- --------- ------
Pre-tax income (loss) (21,851) 16,599 18,829 (111,192) 8,018 NM
--------- --------- --------- --------- --------- ------
Income tax expense (benefit):
Current (3,606) -- 221 (221) -- NM
Deferred (7,842) 5,897 6,441 (14,565) 28,050 NM
--------- --------- --------- --------- --------- ------
Total income tax expense (benefit) (11,448) 5,897 6,662 (14,786) 28,050 NM
--------- --------- --------- --------- --------- ------
Net income (loss) $ (10,403) $ 10,702 $ 12,167 $ (96,406) $ (20,032) -92.6%
========= ========= ========= ========= ========= ======
Pre-tax operating income (loss) $ (25,794) $ 12,244 $ 14,378 $(112,584) $ 4,436 NM
========= ========= ========= ========= ========= ======
After-tax operating income (loss) $ (12,966) $ 7,871 $ 9,274 $ (97,311) $ (22,360) -72.5%
========= ========= ========= ========= ========= ======
4
PMA Capital Corporation
Consolidated Statements of Operations
(In Thousands)
Twelve Twelve % Change
Months Months Twelve
2003 2002 Months
----------------------------------------------
Gross Premiums Written $ 1,429,644 $ 1,386,546 3.1%
=========== =========== ===========
Net Premiums Written $ 1,192,254 $ 1,104,997 7.9%
=========== =========== ===========
Revenues:
Net premiums earned $ 1,198,165 $ 991,011 20.9%
Net investment income 68,923 84,881 -18.8%
Net realized investment gains (losses) 13,780 (16,085) NM
Other revenues 20,379 15,330 32.9%
----------- ----------- -----------
Total revenues 1,301,247 1,075,137 21.0%
----------- ----------- -----------
Expenses:
Losses and loss adjustment expenses 998,347 823,658 21.2%
Acquisition expenses 256,446 216,984 18.2%
Operating expenses 103,672 102,808 0.8%
Dividends to policyholders 641 7,587 -91.6%
Interest expense 9,887 3,257 203.6%
----------- ----------- -----------
Total losses and expenses 1,368,993 1,154,294 18.6%
----------- ----------- -----------
Pre-tax loss (67,746) (79,157) 14.4%
----------- ----------- -----------
Income tax expense (benefit):
Current -- (3,606) 100.0%
Deferred 25,823 (27,527) NM
----------- ----------- -----------
Total income tax expense (benefit) 25,823 (31,133) NM
----------- ----------- -----------
Net loss $ (93,569) $ (48,024) -94.8%
=========== =========== ===========
Pre-tax operating loss $ (81,526) $ (63,072) -29.3%
=========== =========== ===========
After-tax operating loss $ (102,526) $ (37,569) NM
=========== =========== ===========
5
PMA Capital Corporation
Consolidated Balance Sheets
(In Thousands)
4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Quarter
2002 2003 2003 2003 2003
----------------------------------------------------------------------------------------------
Assets:
Investments in fixed maturities
available for sale $ 1,529,924 $ 1,641,593 $ 1,741,879 $ 1,807,977 $ 1,854,555
Short-term investments 298,686 199,782 282,366 187,320 151,332
Short-term investments,
loaned securities collateral - 108,513 185,566 113,978 6,300
Cash 43,853 4,635 12,556 34,954 28,963
----------------- ----------------- --------------------------------------------------------
Total investments and cash 1,872,463 1,954,523 2,222,367 2,144,229 2,041,150
Accrued investment income 18,600 22,426 19,357 23,764 20,870
Premiums receivable 363,675 457,528 394,065 379,041 364,125
Reinsurance receivables 1,295,083 1,314,103 1,307,506 1,252,928 1,220,320
Deferred income taxes 94,074 88,410 70,928 93,181 76,962
Deferred acquisition costs 89,222 103,275 108,740 105,089 83,975
Funds held by reinsureds 157,479 168,597 165,533 153,263 124,695
Other assets 215,198 222,595 249,110 255,292 255,861
----------------- ----------------- ------------------ ------------------ ------------------
Total assets $ 4,105,794 $ 4,331,457 $ 4,537,606 $ 4,406,787 $ 4,187,958
================= ================= ================== ================== ==================
Liabilities:
Unpaid losses and loss adjustment
expenses $ 2,449,890 $ 2,448,147 $ 2,430,276 $ 2,486,776 $ 2,541,318
Unearned premiums 405,379 484,789 499,960 490,461 403,708
Debt 151,250 131,250 176,250 186,250 187,566
Accounts payable, accrued expenses
and other liabilities 253,175 281,920 301,049 297,028 314,830
Funds held under reinsurance treaties 249,670 273,469 311,081 313,688 262,105
Dividends to policyholders 14,998 14,981 15,669 14,851 8,479
Payable under securities loan
agreements 42 108,533 185,574 113,960 6,285
----------------- ----------------- ------------------ ------------------ ------------------
Total liabilities 3,524,404 3,743,089 3,919,859 3,903,014 3,724,291
----------------- ----------------- ------------------ ------------------ ------------------
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 319,014 326,425 335,304 235,607 216,115
Accumulated other comprehensive
income 34,552 34,119 54,621 40,341 19,622
Notes receivable from officers (62) (62) (64) (64) (65)
Treasury stock, at cost (52,535) (52,535) (52,535) (52,532) (52,426)
----------------- ----------------- ------------------ ------------------ ------------------
Total shareholders' equity 581,390 588,368 617,747 503,773 463,667
----------------- ----------------- ------------------ ------------------ ------------------
Total liabilities and
shareholders' equity $ 4,105,794 $ 4,331,457 $ 4,537,606 $ 4,406,787 $ 4,187,958
================= ================= ================== ================== ==================
6
PMA Capital Corporation
Invested Assets and Net Investment Income
(Dollars in Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
----------------------------------------------------------------- ------------ -----------
Total Investments & Cash
As Reported $ 1,872,463 $ 1,954,523 $ 2,222,367 $ 2,144,229 $ 2,041,150 $ 2,041,150 $ 1,872,463
Less:
Securities Lending Activity 42 108,533 185,574 113,960 6,285 6,285 42
Unrealized Gain 51,172 51,031 81,025 58,200 48,282 48,282 51,172
----------- ------------ ----------- ----------- ------------ ------------ -----------
Total Adjusted Investments
& Cash $ 1,821,249 $ 1,794,959 $ 1,955,768 $ 1,972,069 $ 1,986,583 $ 1,986,583 $ 1,821,249
=========== ============ =========== =========== ============ ============ ===========
Net Investment Income
As Reported $ 21,008 $ 17,645 $ 17,780 $ 17,167 $ 16,331 $ 68,923 $ 84,881
Funds Held:
Assumed 5,997 1,036 1,940 1,316 (296) 3,996 14,873
Ceded (5,740) (3,859) (3,567) (3,551) (3,427) (14,404) (17,762)
----------- ------------ ----------- ----------- ------------ ------------ -----------
Total Funds Held 257 (2,823) (1,627) (2,235) (3,723) (10,408) (2,889)
----------- ------------ ----------- ----------- ------------ ------------ -----------
Total Adjusted Investment
Income $ 20,751 $ 20,468 $ 19,407 $ 19,402 $ 20,054 $ 79,331 $ 87,770
=========== ============ =========== =========== ============ ============ ===========
Yield
As Reported 4.49% 3.69% 3.41% 3.15% 3.12% 3.37% 4.50%
Investment Portfolio 4.56% 4.53% 4.14% 3.95% 4.05% 4.16% 5.07%
Duration (in years) 3.5 3.8 3.8 3.9 3.9 3.9 3.5
- ------------------------------------------------------------------------------------------------------------------------------------
PMA Capital Corporation
Debt
(Dollars in Thousands)
Amount
Outstanding Maturity
-------------------------------------------
4.25% convertible debt $ 86,250 2022 1
Trust preferred debt 2 43,816 2033
8.50% senior notes 57,500 2018
--------------------
Total long-term debt $ 187,566
====================
1 Holders of the Convertible Debt, at their option, may require us to
repurchase all or a portion of their debentures on September 30, 2006,
2008, 2010, 2012 and 2017. This debt may be converted at any time, at the
holder's option, at a current price of $16.368 per share.
2 The increase of $1.3 million in trust preferred debt at December 31, 2003,
compared to September 30, 2003, is due to the application of the provisions
of FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable
Interest Entities". Application of the provisions of FIN 46 required us to
deconsolidate our wholly owned statutory trust subsidiaries, which resulted
in an increase of $1.3 million of other assets and debt on our balance
sheet.
PMA Capital Corporation
Other Assets and Liabilities
(Dollars in Millions)
Other Assets 12/31/2003 Other Liabilities 12/31/2003
- ------------ -------------------- ----------------- --------------------
Deposit assets (FASB #113) $ 49.2 Deposit liabilities (FASB #113) $ 76.1
Investment in Cathedral 34.2 Escrow liabilities 38.1
PP&E 32.1 Premium surcharges 34.3
Prepaid reinsurance premiums 30.3 Pension liabilities 30.6
Receivables- self-insured & Premium taxes and other assessments 26.2
large deductible clients 29.8 Ceded premiums payable 15.4
Prepaid pension asset 22.3 Accrued commissions 15.4
Escrow 22.2 Accrued postretirement benefits 13.5
Other 35.8 Accounts payable and other liabilities 65.2
-------------------- --------------------
Total: $ 255.9 Total: $ 314.8
==================== ====================
7
PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2003
(In Thousands)
PMA
Insurance Corporate Run-off
Group PMA Re 1 & Other 2 Operations 3 Consolidated
-------------------------------------------------------------------------
Gross Premiums Written $ 678,434 $ 750,873 $ (788) $ 1,125 $ 1,429,644
=========== =========== =========== =========== ===========
Net Premiums Written $ 603,593 $ 595,074 $ (788) $ (5,625) $ 1,192,254
=========== =========== =========== =========== ===========
Revenues:
Net premiums earned $ 570,032 $ 624,249 $ (788) $ 4,672 $ 1,198,165
Net investment income 32,907 32,513 1,529 1,974 68,923
Other revenues 17,493 -- 386 2,500 20,379
----------- ----------- ----------- ----------- -----------
Operating revenues 620,432 656,762 1,127 9,146 1,287,467
----------- ----------- ----------- ----------- -----------
Losses and Expenses:
Losses and loss adjustment expenses 442,502 549,379 -- 6,466 998,347
Acquisition expenses 90,575 164,944 -- 927 256,446
Operating expenses 65,173 21,872 14,056 2,571 103,672
Dividends to policyholders 641 -- -- -- 641
----------- ----------- ----------- ----------- -----------
Total losses and expenses 598,891 736,195 14,056 9,964 1,359,106
----------- ----------- ----------- ----------- -----------
Operating income (loss) before income taxes
and interest expense 21,541 (79,433) (12,929) (818) (71,639)
Interest expense -- -- 9,887 -- 9,887
----------- ----------- ----------- ----------- -----------
Pre-tax operating income (loss) $ 21,541 $ (79,433) $ (22,816) $ (818) (81,526)
=========== =========== =========== ===========
Net realized investment gains 13,780
-----------
Pre-tax loss $ (67,746)
===========
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
2 Corporate & Other includes the effect of eliminating transactions between
the various Insurance Operations.
3 Formerly known as Caliber One.
8
PMA Capital Corporation
Statements of Operations - Consolidating
Year Ended December 31, 2002
(In Thousands)
PMA
Insurance Corporate Run-off
Group PMA Re 1 & Other 2 Operations 3 Consolidated
----------------------------------------------------------------------------------
Gross Premiums Written $ 515,332 $ 776,787 $ (10,881) $ 105,308 $ 1,386,546
=========== =========== =========== =========== ===========
Net Premiums Written $ 452,276 $ 639,039 $ (881) $ 14,563 $ 1,104,997
=========== =========== =========== =========== ===========
Revenues:
Net premiums earned $ 410,266 $ 551,513 $ (881) $ 30,113 $ 991,011
Net investment income 35,613 48,736 (608) 1,140 84,881
Other revenues 14,694 -- 636 -- 15,330
----------- ----------- ----------- ----------- -----------
Operating revenues 460,573 600,249 (853) 31,253 1,091,222
----------- ----------- ----------- ----------- -----------
Losses and Expenses:
Losses and loss adjustment expenses 307,734 439,228 -- 76,696 823,658
Acquisition expenses 71,874 134,146 -- 10,964 216,984
Operating expenses 48,032 13,453 10,229 31,094 102,808
Dividends to policyholders 7,587 -- -- -- 7,587
----------- ----------- ----------- ----------- -----------
Total losses and expenses 435,227 586,827 10,229 118,754 1,151,037
----------- ----------- ----------- ----------- -----------
Operating income (loss) before income taxes
and interest expense 25,346 13,422 (11,082) (87,501) (59,815)
Interest expense -- -- 3,257 -- 3,257
----------- ----------- ----------- ----------- -----------
Pre-tax operating income (loss) $ 25,346 $ 13,422 $ (14,339) $ (87,501) (63,072)
=========== =========== =========== =========== ===========
Net realized investment losses (16,085)
-----------
Pre-tax loss $ (79,157)
===========
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
2 Corporate & Other includes the effect of eliminating transactions between
the various Insurance Operations.
3 Formerly known as Caliber One.
9
PMA Capital Corporation
Insurance Ratios
Year Ended December 31, 2003
PMA
Insurance
Group 1 PMA Re2
-------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 77.6% 88.0%
-------------- --------------
Expense ratio:
Acquisition expenses 15.9% 26.4%
Operating expenses 9.2% 3.5%
-------------- --------------
Total expense ratio 25.1% 29.9%
-------------- --------------
Policyholders' dividend ratio 0.1% NA
-------------- --------------
Combined ratio 102.8% 117.9%
============== ==============
Net investment income ratio -5.8% -5.2%
-------------- --------------
Operating ratio 97.0% 112.7%
============== ==============
1 The operating expense ratio and the combined ratio are computed based on
$52.2 million of insurance-related operating expenses.
2 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
10
PMA Capital Corporation
Insurance Ratios
Year Ended December 31, 2002
PMA
Insurance
Group1 PMA Re2
--------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 75.0% 79.6%
--------------------- ---------------------
Expense ratio:
Acquisition expenses 17.5% 24.3%
Operating expenses 8.9% 2.5%
--------------------- ---------------------
Total expense ratio 26.4% 26.8%
--------------------- ---------------------
Policyholders' dividend ratio 1.8% NA
--------------------- ---------------------
Combined ratio 103.2% 106.4%
===================== =====================
Net investment income ratio -8.7% -8.8%
--------------------- ---------------------
Operating ratio 94.5% 97.6%
===================== =====================
1 The operating expense ratio and the combined ratio are computed based on
$36.7 million of insurance-related operating expenses.
2 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
11
PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2003
(In Thousands)
PMA
Insurance Corporate Run-off
Group PMA Re1 & Other2 Operations3 Consolidated
---------------------------------------------------------------------------------
Gross Premiums Written $ 161,487 $ 133,783 $ (180) $ 581 $ 295,671
=============== =============== ============== ============== ================
Net Premiums Written $ 140,784 $ 124,261 $ (180) $ 592 $ 265,457
=============== =============== ============== ============== ================
Revenues:
Net premiums earned $ 177,474 $ 168,646 $ (180) $ (949) $ 344,991
Net investment income 8,299 7,481 17 534 16,331
Other revenues 4,407 - 59 - 4,466
--------------- --------------- -------------- -------------- ----------------
Operating revenues 190,180 176,127 (104) (415) 365,788
--------------- --------------- -------------- -------------- ----------------
Losses and Expenses:
Losses and loss adjustment expenses 154,069 112,021 - 809 266,899
Acquisition expenses 24,354 40,436 - - 64,790
Operating expenses 18,278 11,114 3,264 (405) 32,251
Dividends to policyholders (5,539) - - - (5,539)
--------------- --------------- -------------- -------------- ----------------
Total losses and expenses 191,162 163,571 3,264 404 358,401
--------------- --------------- -------------- -------------- ----------------
Operating income (loss) before income taxes
and interest expense (982) 12,556 (3,368) (819) 7,387
Interest expense - - 2,951 - 2,951
--------------- --------------- -------------- -------------- ----------------
Pre-tax operating income (loss) $ (982) $ 12,556 $ (6,319) $ (819) 4,436
=============== =============== ============== ==============
Net realized investment gains 3,582
----------------
Pre-tax income $ 8,018
================
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
2 Corporate & Other includes the effect of eliminating transactions between
the various Insurance Operations.
3 Formerly known as Caliber One.
12
PMA Capital Corporation
Statements of Operations - Consolidating
Three Months Ended December 31, 2002
(In Thousands)
PMA
Insurance Corporate Run-off
Group PMA Re1 & Other2 Operations3 Consolidated
---------------------------------------------------------------------------------
Gross Premiums Written $ 91,886 $ 201,814 $ (10,228) $ (169) $ 283,303
=============== =============== ============== ============== ================
Net Premiums Written $ 73,549 $ 185,870 $ (228) $ (14,189) $ 245,002
=============== =============== ============== ============== ================
Revenues:
Net premiums earned $ 100,736 $ 164,970 $ (228) $ (1,672) $ 263,806
Net investment income 8,611 11,588 245 564 21,008
Other revenues 3,807 - 52 - 3,859
--------------- --------------- -------------- -------------- ----------------
Operating revenues 113,154 176,558 69 (1,108) 288,673
--------------- --------------- -------------- -------------- ----------------
Losses and Expenses:
Losses and loss adjustment expenses 77,185 167,798 - 5,715 250,698
Acquisition expenses 17,753 36,009 - 2,020 55,782
Operating expenses 12,267 1,231 1,578 (8,839) 6,237
Dividends to policyholders 111 - - - 111
--------------- --------------- -------------- -------------- ----------------
Total losses and expenses 107,316 205,038 1,578 (1,104) 312,828
--------------- --------------- -------------- -------------- ----------------
Operating income (loss) before income taxes
and interest expense 5,838 (28,480) (1,509) (4) (24,155)
Interest expense - - 1,639 - 1,639
--------------- --------------- -------------- -------------- ----------------
Pre-tax operating income (loss) $ 5,838 $ (28,480) $ (3,148) $ (4) (25,794)
=============== =============== ============== ==============
Net realized investment losses 3,943
----------------
Pre-tax income $ (21,851)
================
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
2 Corporate & Other includes the effect of eliminating transactions between
the various Insurance Operations.
3 Formerly known as Caliber One.
13
PMA Capital Corporation
Insurance Ratios
Three Months Ended December 31, 2003
PMA
Insurance
Group1 PMA Re2
---------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 86.8% 66.4%
--------------------- ---------------------
Expense ratio:
Acquisition expenses 13.7% 24.0%
Operating expenses 8.2% 6.6%
--------------------- ---------------------
Total expense ratio 21.9% 30.6%
--------------------- ---------------------
Policyholders' dividend ratio -3.1% NA
--------------------- ---------------------
Combined ratio 105.6% 97.0%
===================== =====================
Net investment income ratio -4.7% -4.4%
--------------------- ---------------------
Operating ratio 100.9% 92.6%
===================== =====================
1 The operating expense ratio and the combined ratio are computed based on
$14.5 million of insurance-related operating expenses.
2 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
14
PMA Capital Corporation
Insurance Ratios
Three Months Ended December 31, 2002
PMA
Insurance
Group1 PMA Re2
---------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 76.6% 101.7%
--------------------- ---------------------
Expense ratio:
Acquisition expenses 17.6% 21.8%
Operating expenses 9.2% 0.8%
--------------------- ---------------------
Total expense ratio 26.8% 22.6%
--------------------- ---------------------
Policyholders' dividend ratio 0.1% NA
--------------------- ---------------------
Combined ratio 103.5% 124.3%
===================== =====================
Net investment income ratio -8.5% -7.0%
--------------------- ---------------------
Operating ratio 95.0% 117.3%
===================== =====================
1 The operating expense ratio and the combined ratio are computed based on
$9.3 million of insurance-related operating expenses.
2 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
15
PMA Capital Corporation
Statements of Operations - PMA Insurance Group
(Dollar Amounts in Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve % Change % Change
Quarter Quarter Quarter Quarter Quarter Months Months 4th Twelve
2002 2003 2003 2003 2003 2003 2002 Quarter Months
--------------------------------------------------------------------------------------------
Gross Premiums Written $ 91,886 $ 213,721 $ 133,968 $ 169,258 $ 161,487 $ 678,434 $ 515,332 75.7% 31.6%
======== ========= ========= ========= ========= ========= ========= ===== ======
Net Premiums Written $ 73,549 $ 194,239 $ 119,440 $ 149,130 $ 140,784 $ 603,593 $ 452,276 91.4% 33.5%
======== ========= ========= ========= ========= ========= ========= ===== ======
Revenues:
Net premiums earned $ 100,736 $ 116,241 $ 134,350 $ 141,967 $ 177,474 $ 570,032 $ 410,266 76.2% 38.9%
Net investment income 8,611 8,271 8,203 8,134 8,299 32,907 35,613 -3.6% -7.6%
Other revenues 3,807 4,431 4,577 4,078 4,407 17,493 14,694 15.8% 19.0%
-------- --------- --------- --------- --------- --------- --------- ----- ------
Operating revenues 113,154 128,943 147,130 154,179 190,180 620,432 460,573 68.1% 34.7%
-------- --------- --------- --------- --------- --------- --------- ----- ------
Losses and Expenses:
Losses and loss adjustment expenses 77,185 84,035 99,201 105,197 154,069 442,502 307,734 99.6% 43.8%
Acquisition expenses 17,753 19,582 22,824 23,815 24,354 90,575 71,874 37.2% 26.0%
Operating expenses 12,267 14,950 16,213 15,732 18,278 65,173 48,032 49.0% 35.7%
Dividends to policyholders 111 2,036 2,054 2,090 (5,539) 641 7,587 NM 91.6%
-------- --------- --------- --------- --------- --------- --------- ----- ------
Total losses and expenses 107,316 120,603 140,292 146,834 191,162 598,891 435,227 78.1% 37.6%
-------- --------- --------- --------- --------- --------- --------- ----- ------
Pre-tax operating income (loss) $ 5,838 $ 8,340 $ 6,838 $ 7,345 $ (982) 21,541 25,346 NM 15.0%
======== ========= ========= ========= ========= ========= ========= ===== ======
16
PMA Capital Corporation
Insurance Ratios - PMA Insurance Group
4th 1st 2nd 3rd 4th Twelve Twelve Point Chg. Point Chg.
Quarter Quarter Quarter Quarter Quarter Months Months 4th Quarter Twelve Months
2002 2003 2003 2003 2003 2003 2002 Better (Worse) Better (Worse)
---------------------------------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 76.6% 72.3% 73.8% 74.1% 86.8% 77.6% 75.0% (10.2) (2.6)
Expense ratio:
Acquisition expenses 17.6% 16.8% 17.0% 16.8% 13.7% 15.9% 17.5% 3.9 1.6
Operating expenses 1 9.2% 10.4% 9.6% 8.9% 8.2% 9.2% 8.9% 1.0 (0.3)
Total expense ratio 26.8% 27.2% 26.6% 25.7% 21.9% 25.1% 26.4% 4.9 1.3
Policyholders' dividend ratio 0.1% 1.8% 1.5% 1.5% -3.1% 0.1% 1.8% 3.2 1.7
Combined ratio 103.5% 101.3% 101.9% 101.3% 105.6% 102.8% 103.2% (2.1) 0.4
Net investment income ratio -8.5% -7.1% -6.1% -5.7% -4.7% -5.8% -8.7% (3.8) (2.9)
Operating ratio 95.0% 94.2% 95.8% 95.6% 100.9% 97.0% 94.5% (5.9) (2.5)
1 The operating expense ratio equals insurance-related operating expenses
divided by net premiums earned. Insurance-related operating expenses were
$9.3 million, $12.1 million, $12.9 million, $12.7 million and $14.5 million
for the fourth quarter of 2002 and the first, second, third and fourth
quarters of 2003, respectively.
17
PMA Capital Corporation
Statements of Operations - PMA Re 1
(Dollar Amounts in Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve % Change % Change
Quarter Quarter Quarter Quarter Quarter Months Months 4th Twelve
2002 2003 2003 2003 2003 2003 2002 Quarter Months
--------------------------------------------------------------------------------------------------------
Gross Premiums Written $ 201,814 $ 206,119 $ 227,860 $ 183,111 $ 133,783 $ 750,873 $ 776,787 -33.7% -3.3%
========= ========= ========= ========= ========= ========= ========= ====== ======
Net Premiums Written $ 185,870 $ 158,579 $ 172,464 $ 139,770 $ 124,261 $ 595,074 $ 639,039 -33.1% -6.9%
========= ========= ========= ========= ========= ========= ========= ====== ======
Revenues:
Net premiums earned $ 164,970 $ 151,239 $ 151,004 $ 153,360 $ 168,646 $ 624,249 $ 551,513 2.2% 13.2%
Net investment income 11,588 8,431 8,611 7,990 7,481 32,513 48,736 -35.4% -33.3%
--------- --------- --------- --------- --------- --------- --------- ----- -------
Operating revenues 176,558 159,670 159,615 161,350 176,127 656,762 600,249 -0.2% 9.4%
--------- --------- --------- --------- --------- --------- --------- ----- -------
Losses and Expenses:
Losses and loss adjustment
expenses 167,798 112,675 93,280 231,403 112,021 549,379 439,228 -33.2% 25.1%
Acquisition expenses 36,009 35,773 49,329 39,406 40,436 164,944 134,146 12.3% 23.0%
Operating expenses 1,231 2,645 3,899 4,214 11,114 21,872 13,453 NM 62.6%
--------- --------- --------- --------- --------- --------- --------- ----- -------
Total losses and
expenses 205,038 151,093 146,508 275,023 163,571 736,195 586,827 -20.2% 25.5%
--------- --------- --------- --------- --------- --------- --------- ----- -------
Pre-tax operating income
(loss) $ (28,480) $ 8,577 $ 13,107 $(113,673) $ 12,556 (79,433) 13,422 NM NM
========= ========= ========= ========= ========= ========= ========= ====== ======
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
18
PMA Capital Corporation
Insurance Ratios - PMA Re 1
4th 1st 2nd 3rd 4th Twelve Twelve Point Chg. Point Chg.
Quarter Quarter Quarter Quarter Quarter Months Months 4th Quarter Twelve Months
2002 2003 2003 2003 2003 2003 2002 Better (Worse) Better (Worse)
------------------------------------------------------------------------------------------
Ratios - GAAP Basis:
Loss and LAE ratio 101.7% 74.5% 61.8% 150.9% 66.4% 88.0% 79.6% 35.3 (8.4)
------ ------ ----- ------ ----- ----- ----- ---- -----
Expense ratio:
Acquisition expenses 21.8% 23.7% 32.7% 25.7% 24.0% 26.4% 24.3% (2.2) (2.1)
Operating expenses 0.8% 1.7% 2.5% 2.7% 6.6% 3.5% 2.5% (5.8) (1.0)
------ ------ ----- ------ ----- ----- ----- ---- -----
Total expense ratio 22.6% 25.4% 35.2% 28.4% 30.6% 29.9% 26.8% (8.0) (3.1)
------ ------ ----- ------ ----- ----- ----- ---- -----
Combined ratio 124.3% 99.9% 97.0% 179.3% 97.0% 117.9% 106.4% 27.3 (11.5)
===== ====== ===== ====== ===== ===== ===== ==== =====
Net investment income ratio -7.0% -5.6% -5.7% -5.2% -4.4% -5.2% -8.8% (2.6) (3.6)
------ ------ ----- ------ ----- ----- ----- ---- -----
Operating ratio 117.3% 94.3% 91.3% 174.1% 92.6% 112.7% 97.6% 24.7 (15.1)
===== ====== ===== ====== ===== ===== ===== ==== =====
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
19
PMA Capital Corporation
Statements of Operations - Run-off Operations 1
(Dollar Amounts in Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve % Change % Change
Quarter Quarter Quarter Quarter Quarter Months Months 4th Twelve
2002 2003 2003 2003 2003 2003 2002 Quarter Months
-----------------------------------------------------------------------------------------------------
Gross Premiums Written $ (169) $ 110 $ 195 $ 239 $ 581 $ 1,125 $ 105,308 NM -98.9%
============ ============ ============ ========= ============ ============ ======= ==== ============
Net Premiums Written $ (14,189) $ (1,704) $ (1,124) $ (3,389) $ 592 $ (5,625) $ 14,563 NM NM
============ ============ ============ ========= ============ ============ ======= ==== ============
Revenues:
Net premiums earned $ (1,672) $ 6,846 $ 392 $ (1,617) $ (949) $ 4,672 $ 30,113 43.2% -84.5%
Net investment income 564 361 528 551 534 1,974 1,140 -5.3% 73.2%
Other revenues -- 2,500 -- -- -- 2,500 -- NM NM
------------ ------------ ------------ --------- ------------ ------------ ------- ---- ------------
Operating revenues (1,108) 9,707 920 (1,066) (415) 9,146 31,253 62.5% -70.7%
------------ ------------ ------------ --------- ------------ ------------ ------- ---- ------------
Losses and Expenses:
Losses and loss adjustment
expenses 5,715 5,875 593 (811) 809 6,466 76,696 -85.8% -91.6%
Acquisition expenses 2,020 865 62 -- -- 927 10,964 -100.0% -91.5%
Operating expenses (8,839) 2,966 268 (258) (405) 2,571 31,094 95.4% - 91.7%
------------ ------------ ------------ --------- ------------ ------------ ------- ---- ------------
Total losses and expenses (1,104) 9,706 923 (1,069) 404 9,964 118,754 NM -91.6%
------------ ------------ ------------ --------- ------------ ------------ ------- ---- ------------
Pre-tax operating income
(loss) $ (4) $ 1 $ (3) $ 3 $ (819) $ (818) $ (87,501) NM 99.1%
============ ============ ============ ========= ============ ============ ======= ==== ============
1 Formerly known as Caliber One.
20
PMA Capital Corporation
Statements of Operations - Corporate & Other
(Dollar Amounts in Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve % Change % Change
Quarter Quarter Quarter Quarter Quarter Months Months 4th Twelve
2002 2003 2003 2003 2003 2003 2002 Quarter Months
-----------------------------------------------------------------------------------------------------
Gross Premiums Written $(10,228) $ (256) $ (124) $ (228) $ (180) $ (788) $(10,881) 98.2% 92.8%
======== ======== ======== ======== ======== ======== ======== ======== ========
Net Premiums Written $ (228) $ (256) $ (124) $ (228) $ (180) $ (788) $ (881) 21.1% 10.6%
======== ======== ======== ======== ======== ======== ======== ======== ========
Revenues:
Net premiums earned $ (228) $ (256) $ (124) $ (228) $ (180) $ (788) $ (881) 21.1% 10.6%
Net investment income 245 582 438 492 17 1,529 (608) -93.1% NM
Other revenues 52 69 189 69 59 386 636 13.5% -39.3%
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operating revenues 69 395 503 333 (104) 1,127 (853) NM NM
-------- -------- -------- -------- -------- -------- -------- -------- --------
Losses and Expenses:
Operating expenses 1,578 3,311 3,842 3,639 3,264 14,056 10,229 106.8% 37.4%
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total losses and expenses 1,578 3,311 3,842 3,639 3,264 14,056 10,229 106.8% 37.4%
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operating loss before
income taxes and
interest expense (1,509) (2,916) (3,339) (3,306) (3,368) (12,929) (11,082) NM -16.7%
Interest expense 1,639 1,758 2,225 2,953 2,951 9,887 3,257 80.0% 203.6%
-------- -------- -------- -------- -------- -------- -------- -------- --------
Pre-tax operating loss $ (3,148) $ (4,674) $ (5,564) $ (6,259) (6,319) (22,816) (14,339) NM -59.1%
======== ======== ======== ======== ======== ======== ======== ======== ========
21
PMA Capital Corporation
Operating Cash Flows - Consolidated
(In Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
---------------------------------------------------------------------------------------------------
Receipts:
Premiums and other revenues
collected $ 272,335 $ 274,221 $ 393,639 $ 319,594 $ 243,436 $ 1,230,890 $ 1,080,302
Investment income received 24,706 20,108 27,434 20,079 27,690 95,311 92,207
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total receipts 297,041 294,329 421,073 339,673 271,126 1,326,201 1,172,509
----------- ----------- ----------- ----------- ----------- ----------- -----------
Disbursements:
Losses and LAE paid:
Losses and LAE paid
- current year 59,147 6,787 35,305 83,436 60,322 185,850 138,127
Losses and LAE paid
- prior years 113,417 210,892 183,345 139,352 124,280 657,869 627,311
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total losses and LAE paid 172,564 217,679 218,650 222,788 184,602 843,719 765,438
Insurance operating expenses pai 67,197 78,957 100,177 64,223 68,280 311,637 297,633
Policyholders' dividends paid 1,868 1,627 1,439 2,880 773 6,719 9,352
Interest on corporate debt 239 2,484 502 3,582 1,798 8,366 2,091
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total disbursements 241,868 300,747 320,768 293,473 255,453 1,170,441 1,074,514
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net other 9,042 (4,358) 3,373 (6,092) 947 (6,130) (25,828)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net operating cash flows $ 64,215 $ (10,776) $ 103,678 $ 40,108 $ 16,620 $ 149,630 $ 72,167
=========== =========== =========== =========== =========== =========== ===========
22
PMA Capital Corporation
Operating Cash Flows - PMA Insurance Group
(In Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
----------------------------------------------------------------------------------------
Receipts:
Premiums and other revenues collected $ 129,911 $ 120,589 $ 138,915 $ 150,684 $ 147,111 $ 557,299 $ 472,186
Investment income received 9,859 9,340 9,772 9,523 9,433 38,068 38,761
--------- --------- --------- --------- --------- --------- ---------
Total receipts 139,770 129,929 148,687 160,207 156,544 595,367 510,947
--------- --------- --------- --------- --------- --------- ---------
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year 38,742 5,226 24,316 37,387 35,923 102,852 87,417
Losses and LAE paid - prior years 40,901 83,269 60,049 57,474 56,739 257,531 250,218
--------- --------- --------- --------- --------- --------- ---------
Losses and LAE 79,643 88,495 84,365 94,861 92,662 360,383 337,635
Insurance operating expenses paid 21,637 37,212 37,214 22,578 35,721 132,725 112,486
Policyholders' dividends paid 1,868 1,627 1,439 2,880 773 6,719 9,352
--------- --------- --------- --------- --------- --------- ---------
Total disbursements 103,148 127,334 123,018 120,319 129,156 499,827 459,473
--------- --------- --------- --------- --------- --------- ---------
Net other 4,338 (5,052) (1,795) (8,839) (7,150) (22,836) (1,217)
--------- --------- --------- --------- --------- --------- ---------
Net operating cash flows $ 40,960 $ (2,457) $ 23,874 $ 31,049 $ 20,238 $ 72,704 $ 50,257
========= ========= ========= ========= ========= ========= =========
23
PMA Capital Corporation
Operating Cash Flows - PMA Re 1
(In Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
--------------------------------------------------------------------------------------------
Receipts:
Premiums collected $ 144,418 $ 154,610 $ 256,727 $ 170,802 $ 96,971 $ 679,110 $ 559,806
Investment income received 13,740 9,162 16,007 9,107 16,897 51,173 49,191
--------- --------- --------- --------- --------- --------- ---------
Total receipts 158,158 163,772 272,734 179,909 113,868 730,283 608,997
--------- --------- --------- --------- --------- --------- ---------
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year 17,895 865 9,701 45,427 23,198 79,191 39,199
Losses and LAE paid - prior years 58,008 115,870 104,331 73,694 53,940 347,835 319,330
--------- --------- --------- --------- --------- --------- ---------
Total losses and LAE paid 75,903 116,735 114,032 119,121 77,138 427,026 358,529
Insurance operating expenses paid 40,788 39,418 61,197 40,686 32,480 173,781 164,560
--------- --------- --------- --------- --------- --------- ---------
Total disbursements 116,691 156,153 175,229 159,807 109,618 600,807 523,089
--------- --------- --------- --------- --------- --------- ---------
Net other 13,613 660 8,572 1,501 9,028 19,761 (12,688)
--------- --------- --------- --------- --------- --------- ---------
Net operating cash flows $ 55,080 $ 8,279 $ 106,077 $ 21,603 $ 13,278 $ 149,237 $ 73,220
========= ========= ========= ========= ========= ========= =========
1 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Re. This segment is currently
in run-off.
24
PMA Capital Corporation
Operating Cash Flows - Run-off Operations 1
(In Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 2003 2002
--------------------------------------------------------------------------------------------
Receipts:
Net premiums collected (paid) $ (1,994) $ (978) $ (2,003) $ (1,892) $ (646) $ (5,519) $ 48,310
Investment income received 1,107 1,606 1,655 1,449 1,360 6,070 4,255
-------- -------- -------- -------- -------- -------- --------
Total receipts (887) 628 (348) (443) 714 551 52,565
-------- -------- -------- -------- -------- -------- --------
Disbursements:
Losses and LAE paid:
Losses and LAE paid - current year 2,510 696 1,288 622 1,201 3,807 11,511
Losses and LAE paid - prior years 14,508 11,753 18,965 8,184 13,601 52,503 57,763
-------- -------- -------- -------- -------- -------- --------
Total losses and LAE paid 17,018 12,449 20,253 8,806 14,802 56,310 69,274
Insurance operating expenses paid 4,772 2,327 1,766 959 79 5,131 20,587
-------- -------- -------- -------- -------- -------- --------
Total disbursements 21,790 14,776 22,019 9,765 14,881 61,441 89,861
-------- -------- -------- -------- -------- -------- --------
Net other 5,784 74 (20) (2,279) 3,466 1,241 (5,387)
-------- -------- -------- -------- -------- -------- --------
Net operating cash flows $(16,893) $(14,074) $(22,387) $(12,487) $(10,701) $(59,649) $(42,683)
======== ======== ======== ======== ======== ======== ========
1 Formerly known as Caliber One.
25
This Page Intentionally Left Blank
26
PMA Capital Corporation
Statutory Surplus
(In Thousands)
4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Quarter
2002 2003 2003 2003 20031
------------------------------------------------ -----------
PMA Pool 2 $ 305,533 $ 302,646 $ 304,109 $ 301,684 $ 296,757
PMA Capital Insurance Company 3 580,151 554,611 581,821 477,391 500,597
Caliber One Indemnity Company 26,844 - - - -
Eliminations 4 (332,377) (302,646) (304,109) (301,684) (296,757)
----------- ----------- ----------- ----------- -----------
Total $ 580,151 $ 554,611 $ 581,821 $ 477,391 $ 500,597
=========== =========== =========== =========== ===========
PMA Capital Corporation
Statutory Financial Information - PMA Pool 2
(In Thousands)
4th 1st 2nd 3rd 4th Twelve Twelve
Quarter Quarter Quarter Quarter Quarter Months Months
2002 2003 2003 2003 2003 1 2003 1 2002
--------------------------------------------------------------------------------------
Net Premiums Written:
Workers Compensation & Integrated
Disability $ 44,594 $ 147,425 $ 91,269 $ 116,397 $ 77,362 $ 432,453 $ 337,945
Other Commercial Lines 14,878 28,255 25,914 17,424 14,386 85,979 73,005
----------- ----------- ----------- ----------- ----------- ---------- ----------
Total - PMA Pool $ 59,472 $ 175,680 $ 117,183 $ 133,821 $ 91,748 $ 518,432 $ 410,950
=========== =========== =========== =========== =========== ========== ==========
Statutory Ratios:
Loss and LAE ratio 77.5% 73.3% 73.6% 74.4% 87.2% 78.0% 75.3%
Underwriting expense ratio 39.6% 21.5% 28.5% 24.9% 34.6% 26.2% 25.7%
Policyholders' dividend ratio 0.1% 1.6% 1.6% 1.7% -3.4% 0.0% 2.0%
----------- ----------- ----------- ----------- ----------- ---------- ----------
Combined ratio 117.2% 96.4% 103.7% 101.0% 118.4% 104.2% 103.0%
=========== =========== =========== =========== =========== ========== ==========
Operating ratio 107.1% 83.0% 97.9% 94.9% 113.9% 97.3% 92.9%
=========== =========== =========== =========== =========== ========== ==========
1 Estimated.
2 The PMA Pool is comprised of Pennsylvania Manufacturers' Association
Insurance Company, Manufacturers Alliance Insurance Company and
Pennsylvania Manufacturers Indemnity Company.
3 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Capital Insurance Company.
The reinsurance business is currently in run-off.
4 Surplus for PMA Pool and Caliber One Indemnity Company is eliminated as it
is included in the statutory surplus of PMA Capital Insurance Company.
27
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 William E. Hitselberger
Chief Financial Officer
Written Inquiries: 215.665.5070
The Bank of New York e-mail: bhitselberger@pmacapital.com
Shareholder Relations Department - 11 E
P.O. Box 11258 Investor Relations
Church Street Station 215.665.5046
New York, NY 10286 investorrelations@pmacapital.com
Phone Inquiries: Company Website:
800.524.4458 http://www.pmacapital.com
Email Inquiries:
shareowner-svcs@bankofny.com
- ----------------------------------------------------------------------------------------------------------------------------
Financial Strength Ratings (as of 2/10/2004):
A.M. Best Moody's
------------------ --------------------
PMA Pool 1 B++ (5th of 16) Ba1 (11th of 21)
PMA Capital Insurance Company 2 B++ (5th of 16) B1 (14th of 21)
1 The PMA Pool is comprised of Pennsylvania Manufacturers' Association
Insurance Company, Manufacturers Alliance Insurance Company and
Pennsylvania Manufacturers Indemnity Company.
2 On November 6, 2003 we announced our decision to withdraw from the
reinsurance business previously served by PMA Capital Insurance Company.
The reinsurance business is currently in run-off.
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