PMA Capital Posts Profit, Despite Q4 Dip

February 7, 2002

Philadelphia-based PMA Capital Corporation announced that its net after-tax operating income in the fourth quarter was $5.8 million, or $0.25 per diluted share, compared with $7.0 million, or $0.32 per diluted share, for the same period in 2000. The company’s after tax operating income for the full year was $1.9 million, compared to a $6.5 million net operating loss in 2000.

“These results include losses of approximately $20 million after-tax (approximately $30 million pre-tax), or $0.90 per share, from the September 11th terrorist attack on the World Trade Center, and after-tax losses of $17.0 million, or $0.77 per share, in PMA Capital’s excess and surplus lines segment, Caliber One,” said the announcement.

“Partially offsetting these losses were an after-tax gain of $6.3 million, or $0.28 per share, from the first quarter sale of real estate, as well as a first quarter tax benefit of $10.1 million, or $0.45 per share, resulting from the completion of an IRS examination,” it continued.

PMA President and CEO John W. Smithson expressed optimism for the current year, noting that “rate increases across the board in each of our segments will strengthen margins as we head into 2002.” The group posted a 40 percent increase in net premiums written in the fourth quarter of $196,763 compared to $117,764 for the same period in 2000.

Smithson also noted the success of PMA’s $160 million share offering last December, and indicated that, “We expect to deploy most of this new capital in 2002 to take further advantage of the current hard market where favorable trends such as significant price increases and tighter terms and conditions continued through the fourth quarter and into the January 1 renewal season.”

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