Philadelphia-based PMA Capital Corp. announced that A.M. Best has restored the A- (“Excellent”) rating with a stable outlook to The PMA Insurance Group.
The announcement completes a one-year period during which PMA Capital stabilized its financial results, protected its primary insurance client base and service franchise and instituted an orderly withdrawal from its reinsurance business while taking the necessary steps to obtain the restoration of The PMA Insurance Group’s A- financial strength rating.
The upgrade enables The PMA Insurance Group, a provider of workers’ compensation insurance, to enter the January 2005 renewal season with positive momentum and enhanced confidence in its ability to serve its existing customers and to write new business that meets its underwriting standards.
Vincent Donnelly, president and CEO, stated, “I’m extremely proud of the entire PMA team. We successfully worked together during this transition period with several primary goals in mind – continuing to provide high quality service to our existing customers, executing the capital plan necessary to regain our A- A.M. Best rating, producing stable operating results and protecting our primary insurance franchise. We greatly appreciate the loyalty and dedication of our agents, brokers, customers, and employees, which brought us to this successful result.”
In conjunction with its efforts to restore the financial strength rating, PMA Capital took several actions to strengthen the capital base of the holding company, including the recent completion of an exchange offer for its $86.25 million 4.25% Senior Convertible Debentures due 2022. In addition, PMA Capital raised an additional $15 million of capital from the sale of 6.50% Senior Secured Convertible Debentures, due 2022.
In commenting on the company’s capital structure, Donnelly stated, “The exchange offer and the sale of additional securities have improved our liquidity at the holding company level and increased our financial flexibility. The PMA Insurance Group has $294.6 million in statutory capital at September 30, 2004, and with its A- financial strength rating restored, offers a strong, service-focused operation ready to meet its customers’ commercial insurance needs.”
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