A.M. Best Downgrades Ratings of PMA Capital Insurance Company; Ratings Remain Under Review with Negative Implications

  
    
  
  
    
      A.M. Best Co. has downgraded the financial strength rating (FSR) 
      to C++ (Marginal) from B (Fair) and issuer credit rating (ICR) to “b” 
      from “bb” of PMA Capital Insurance Company (PMACIC) 
      (Philadelphia, PA), the run-off operations of PMA Capital Corporation 
      (PMA Capital) (Blue Bell, PA) [NASDAQ: PMACA], following the recent 
      reserve strengthening actions occurring during third quarter 2008. 
      Additionally, the ratings remain under review with negative implications 
      as a result of the announcement earlier this year that PMACIC’s parent, 
      PMA Capital, entered into a letter of intent and subsequently signed a 
      stock purchase agreement with a third party to sell PMACIC. The ratings 
      of PMA Capital and PMA Insurance Group (Blue Bell, PA) and 
      its members are unchanged.
    
    
      The downgrading of PMACIC’s ratings reflect the significant reduction in 
      its stand-alone capitalization following additional reserve 
      strengthening actions during the first and third quarters of 2008, 
      impacting claims made general liability business and, to a lesser 
      extent, occurrence liability business. Partially offsetting these 
      negative rating factors is PMA Capital’s commitment to maintain adequate 
      capitalization to support the run-off operations following the recent 
      reserve strengthening actions. While capitalization remains marginal, 
      A.M. Best expects ongoing financial support from PMA Capital to ensure 
      an orderly run off.
    
    
      The under review status of PMACIC’s ratings reflect the planned sale to 
      a third party and uncertainty with the level of commitment of the new 
      parent to sustain operations, as well as the continued execution risk 
      associated with managing the run-off business.
    
    
      For Best’s Ratings, an overview of the rating process and rating 
      methodologies, please visit www.ambest.com/ratings.
    
    
      Founded in 1899, A.M. Best Company is a global full-service credit 
      rating organization dedicated to serving the financial and health care 
      service industries, including insurance companies, banks, hospitals and 
      health care system providers. For more information, visit www.ambest.com.