A.M. Best Moves Rating of Caliber One to Review

May 7, 2002

A.M. Best Co. has placed the financial strength rating of A (Excellent) for Caliber One Indemnity Company, Wilmington, Del., under review with negative implications.

The rating action follows the May 1, earnings release of Caliber One’s ultimate parent, PMA Capital Corporation, in which PMA Capital announced its decision to withdraw from the excess and surplus (E&S) lines marketplace served by its

Caliber One business segment.

Caliber One reported a GAAP pre-tax operating loss of $43.1 million in the first quarter of 2002, due largely to higher than expected loss development in certain casualty and, to a lesser extent, property lines of business. PMA Capital decided to withdraw from this business to remove the uncertainty associated with Caliber One’s operations from future operating results.

Caliber One’s rating will remain under review pending discussions with management to determine the ultimate disposition of the E&S business segment. The financial strength ratings for PMA Capital Insurance Group, Philadelphia, and PMA Insurance Group, Blue Bell, Pennsylvania, remain unaffected.

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