1 KBW Presentation September 2005

2 Safe Harbor Statement This presentation contains forward-looking information about United America Indemnity and the operations of United America Indemnity that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of the transactions, and statements about the future performance, operations, products and services of the companies. The business and operations of United America Indemnity is and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward- looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: (1) the ineffectiveness of United America Indemnity's business strategy due to changes in current or future market conditions; (2) the effects of competitors' pricing policies, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products; (3) greater frequency or severity of claims and loss activity than United America Indemnity's underwriting, reserving or investment practices have anticipated; (4) decreased level of demand for United America Indemnity's insurance products or increased competition due to an increase in capacity of property and casualty insurers; (5) risks inherent in establishing loss and loss adjustment expense reserves; (6) uncertainties relating to the financial ratings of United America Indemnity's insurance subsidiaries; (7) uncertainties arising from the cyclical nature of United America Indemnity's business; (8) changes in United America Indemnity's relationships with, and the capacity of, its general agents; (9) the risk that United America Indemnity's reinsurers may not be able to fulfill obligations; and (10) uncertainties relating to governmental and regulatory policies. The foregoing review of important factors should be read in conjunction with the other cautionary statements that are included in United America Indemnity's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as well as in the materials filed and to be filed with the U.S. Securities and Exchange Commission (SEC). United America Indemnity does not make any commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.

3 UAI Overview We Measure Success in Terms of Growth in Book Value as We Believe This is the Best Means of Delivering Superior Returns to Our Shareholders.

4 UAI Overview We Maximize Growth in Book Value By: –Operating Strategies Predicated on Competitive Advantage –Preserving the Strength of our Balance Sheet

5 UAI Overview Operational Strategies –Emphasis on the Small E&S and Specialty Lines Market –Offering Proprietary Products –Create Franchise Value for Producers –Benefits of Penn-America Acquisition

6 UAI Overview Financial Management Strategies –Conservative Investment Portfolio –Prudent Loss Reserving Practices –Management of Reinsurance Receivable –Capital Management Strategies –Benefits of Penn-America Acquisition

7 Operating Strategies/Competitive Advantages Operate in E&S/Specialty Segment –70% of Premium Written on Surplus Lines Basis –Freedom of Rate and Form –Average Premium Size Yields Competitive Insulation –Commercial Binding Authority – Efficient Distribution and Infrastructure

8 Operating Strategies/Competitive Advantages Offer Proprietary Products to Niche Markets –Segment Focused Products Developed In-House Commercial Binding Authority –Habitational –Non-Residential Artisan Contractors –Restaurants –Retail Stores Miscellaneous Professional Liability Umbrella & Excess Liability New Products –Real Estate Agents E&O –Lawyers E&O –Allied Health Care –Single Producer Niche Products Social Service Agency Liability Business Southern California Chiropractors Equine Mortality

9 Operating Strategies/Competitive Advantages Create Franchise Value For Producers -Semi-Exclusive Agency Appointments – 140 Current Appointments -Technology Centered on the Agent -Access to CEO/Senior Management -Long Term Partnership With Producers

10 Operating Strategies/Competitive Advantages Acquisition of Penn-America -Expanded and Complemented Our Producer Base -Brought Additional Outlets for Newly Developed Products -Extremely Profitable and Stable Portfolio of Business -Added Fee-Based Revenues From Penn Independent Corporation, Our Wholesale Broker

11 Historical Underwriting Performance Statutory Combined Ratios Strong Underwriting Performance: –UNG has a 94% combined ratio for the last 20 years –PNG has a 98% combined ratio since public (1993) –P&C industry average is 108% Source: Company reports, A.M. Best. Note:Statutory combined ratio. In 2002, UNG increased net loss reserves relative to accident years 2001 and prior by $47.8 million primarily due to higher than anticipated losses in the multi-peril and other liability lines of business and by $23.6 million due to the conclusion of an arbitration proceeding. The net losses and loss adjustment expenses ratio increased by 43.9 percentage points in 2002 due to this $71.4 million increase in net loss reserves is adjusted for certain expenses related to the acquisition as well as other one-time costs. United National 2004 reported on GAAP basis to incorporate offshore operations. P&C Industry Average: 108%

12 PNG Compound Annual Growth Rate of 20% UNG Compound Annual Growth Rate of 21% Operating Strategies – Growth In Net Written Premium 81% PNG Net Premiums Written UNG Net Premiums Written 21% CAGR ($ in Millions) 20% CAGR

13 Growth in Operating EPS : –Continued Strong Underwriting Performance at UNG and PNG –Increased Retentions –Strong Growth in Investment Income Net Operating Income Growth: –Growth in Underwriting Profit –Business Combination –Growth in Investment Income Putting excess cash balances to work Positive cash flow from operations - $39 million for Q2:’05 NET OPERATING INCOME Note: All Financial Information is UAI “As Reported”. Operating Earnings Per Share Calculated on a Diluted Basis. 133% UAI – June 2005 Financial Results OPERATING EARNINGS PER SHARE 81% ($ in Millions)

14 Growth in Underwriting Income: –Business Combination –Growth in Net Earned Premium –Consistent Underwriting Margins Excellent Underwriting Results –Continued Actuarial Pricing Discipline –Focus on Areas of Underwriting Expertise UAI – June 2005 Financial Results GAAP COMBINED RATIO Note: All Financial Information is UAI “As Reported” 105% PRE-TAX GAAP U/W INCOME ($ in Millions)

15 Financial Management Strategy - Balance Sheet Strength Conservative Investment Portfolio -Value of Portfolio at June 30, $1.32 Billion -Broadly Diversified Asset Mix 91% Cash and Fixed Income Securities Integrated with Tax Strategy -Credit Quality – AAA/AA -Duration of Fixed Income Portfolio – 3.78 Years Note: As of June 30, 2005 Excludes Payable/Receivable for Securities

16 Financial Management Strategy - Balance Sheet Strength Loss Reserving Philosophy –Our Policy is to Always Reserve At or Above the Actuarial Point Estimate –3 Tiered Process: UAI Actuary Independent Outside Actuary PWC –Unique in Having Independent Actuary Review Gross and Net Reserves Every Quarter

17 A % A+ 21.7% A 64.6% A- 0.7% B++ and Lower 2.9% Financial Management Strategy - Balance Sheet Strength Management of Reinsurance Receivable –Total Reinsurance Receivable, net of Collateral, is $733.0 Million at 6/30/05 –$695.8 Million of Irrevocable Collateral Held by UAI –97.1% of Net Receivables are from Reinsurers Rated “A-” or Higher (by A.M. Best) –Net Exposure to B++ and Lower Reinsurers, is $22 Million. All Reinsurers Paying With No Active Disputes or Arbitrations Credit Quality of Reinsurers

18 Financial Management Strategy - Balance Sheet Strength Management of Reinsurance Receivable Resulting in Continuing Reduction in Reinsurance Leverage. 6.5x Gross & Net 2.7x Net 2.4x Net 2.2x Net 1.9x Net 1.4x Net 1.2x Net Dec 02 Gross & Net Dec 03June 04Sept 04Dec 04Mar 05June 05 Net Reinsurance Receivables / GAAP Equity

19 Financial Management Strategy - Balance Sheet Strength Capital Management Strategies –Offshore Operations – Wind River Insurance Company (Bermuda) Provides Regulatory Flexibility Creates Tax Efficiencies Writes Third Party P&C Risks Reinsures UNG/PNG via Intercompany Treaty

20 Financial Management Strategy - Balance Sheet Strength Acquisition of Penn-America -Immediately Accretive to Book Value Per Share and Earnings -Reduced Reinsurance Leverage -Similarly Conservative Balance Sheet -Enhanced Capital Management Flexibility

21 Growth in Cash and Invested Assets: –Increase in Net Premium Written –Increase in Operating Income –Business Combination Increase in Net Loss Reserves: –Premium Growth –Business Combination Note: All Financial Information is UAI “As Reported”. UAI – June 2005 Financial Results $14.73 $15.30 $16.09 $16.87 $ % Cash & Invested Assets 116% $611.1 $848.3 $924.3 $ $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 Dec 2002Dec 2003Dec 2004June 2005 Net Loss Reserves 125% ($ in Millions)

22 Strong Growth in Book Value Per Share –Increase in Net Income –Accretive Nature of Business Combination Continued Growth in GAAP Book Value –Net Income –Business Combination BOOK VALUE PER SHARE 19% Note: All Financial Information is UAI “As Reported”. UAI – June 2005 Financial Results $14.73 $15.30 $16.09 $16.87 $ % GAAP SHAREHOLDERS’ EQUITY 53% ($ in Millions)

23 Summary UAI Delivering Strong Growth in Book Value for Shareholders –Operating and Financial Strategies Aligned –Excellent Marketing Position –Competitive Insulation –Size and Niche Strategies Create Ongoing Growth Opportunities