Penn-America Reports 51.9 Percent Increase in Q4 Operating Income

January 29, 2004

Penn-America Group, Inc. reported record operating income of $4.5 million or $0.30 per share (basic and diluted) for the fourth quarter of 2003, compared with operating income of $2.9 million or $0.24 per share (basic and diluted) for the fourth quarter of 2002.

“Net income for the fourth quarter of 2003 was $4.5 million or $0.31 per basic share and $0.30 per diluted share and included a net realized investment gain, after taxes, of $45,000,” said the company. “Net income for the fourth quarter of 2002 was $3.9 million or $0.32 per share (basic and diluted) and included a net realized investment gain, after taxes, of $1.0 million or $0.08 per share (basic and diluted).”

The bulletin also noted that “Gross written premiums increased 43.6 percent to $56.1 million in the fourth quarter of 2003, compared with $39.1 million for the same period in 2002. Net written premiums increased 42.2 percent to $47.1 million in the current quarter, compared with $33.1 million for the fourth quarter of 2002. The GAAP combined ratio for the fourth quarter of 2003 was 91.6, compared with 95.7 for the fourth quarter of 2002.”

Commenting on the fourth quarter operating results, president and CEO Jon S. Saltzman noted: “The results of the quarter and the year were outstanding and literally speak for themselves. While our performance does reflect a favorable insurance market in our sector, the people of Penn-America earned these results through their hard work and focus, in an environment that placed many demands on them. We’re justifiably proud of the results but at the same time we’re aware that we can always improve our performance. During 2004, we’re committed to the efforts needed to continue producing the returns that all of us shareholders expect.”

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