A.M. Best Places Ratings of PMA Capital Corporation and Its Subsidiaries under Review with Positive Implications

A.M. Best Co. has placed under review with positive implications the issuer credit rating (ICR) of “bbb-” and debt ratings of PMA Capital Corporation (PMA Capital) (Blue Bell, PA) (NASDAQ: PMACA), following the announcement that PMA Capital and Old Republic International Corporation (Old Republic) (headquartered in Chicago, IL) (NYSE: ORI) have entered into a merger agreement, pursuant to which Old Republic will acquire all of PMA Capital’s outstanding stock.

Concurrently, A.M. Best has placed under review with positive implications the financial strength rating (FSR) of A- (Excellent) and ICRs of “a-” of The PMA Insurance Group (PMA) (Blue Bell, PA) and its pooled members. (See below for a detailed listing of the companies and ratings.)

These rating actions follow the announcement of the stock purchase transaction in which PMA Capital will be integrated into Old Republic, whose primary property/casualty operating companies are currently rated higher than PMA Capital. A.M. Best also expects that with the close of the transaction, PMA will receive certain explicit support from Old Republic, while achieving greater scale and eliminating costs associated with being a public company.

The FSR of A- (Excellent) and ICRs of “a-”have been placed under review with positive implications for PMA Insurance Group and its following members:

• Manufacturers Alliance Insurance Company
• Pennsylvania Manufacturers’ Association Insurance Company
• Pennsylvania Manufacturers Indemnity Company

The following debt ratings have been placed under review with positive implications:

PMA Capital Corporation—

-- “bbb-” on $54.9 million 8.5% senior unsecured note, due 2018

-- “bbb-” on $45,000 4.25% senior unsecured convertible debentures, due 2022

-- “bb+” on $64.44 million variable rate junior subordinated debt, due 2033

-- “bbb” on $10.0 million variable rate surplus note, due 2035

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

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.