A.M. Best Co. affirmed the financial strength rating (FSR) of “A” on PMA Capital Insurance Group, Philadelphia, and removed it from under review. The rating was placed under review Sept. 27, 2001, due to uncertainty regarding the potential impact of the World Trade Center tragedy on the group’s capitalization.
The group’s parent company, PMA Capital Corp., successfully completed an equity offering in Dec. 2001, receiving net proceeds of approximately $158 million to be used to provide additional capital for the reinsurance and insurance operations and for general corporate purposes, such as debt reduction. This action more than offsets the impact on capitalization due to losses related to the World Trade Center attack, estimated to be $30 million net pretax, as well as recent adverse loss reserve development. In addition, A.M. Best believes the group is well positioned for improving its operating performance going forward, given the firming market conditions, particularly in the reinsurance and commercial lines sectors.