EXHIBIT 10.7

Swiss Re

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ADDENDUM NO. 2

to the

PROPERTY EXCESS OF LOSS
AGREEMENT OF REINSURANCE
NO. TP1600E,F
(hereinafter referred to as the “Agreement”)

between

PHILADELPHIA INDEMNITY COMPANY
PHILADELPHIA INSURANCE COMPANY
One Bala Plaza, Suite 100
Bala Cynwyd, Pennsylvania 19004
(hereinafter referred to as the “Company”)

and

SWISS REINSURANCE AMERICA CORPORATION
Armonk, New York
(hereinafter referred to as the “Reinsurer”)

It is understood and agreed that as respects policies in force at 12:01 a.m.,
Eastern Standard Time, January 1, 2005, and new and renewal policies becoming
effective on and after said date, Paragraph A. of Article VIII – Reinsurance
Premium is revised to read as follows:

A.   The Company shall pay to the Reinsurer a premium for the reinsurance
provided under the First and Second Excess of Loss Layers at a rate set forth
below. Such rates shall be applied to the Company’s Subject Earned Premium for
the calendar year under calculation.

              Rate  
First Excess (Accounting Code No. TP1600E)
    .80 %
 
       
Second Excess (Accounting code No. TP1600F)
    .84 %

No. TP1600E, F
Addendum No. 2

 

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Swiss Re

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ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate, by their duly authorized representatives as of the following
dates:

In Bala Cynwyd, Pennsylvania, this 21st day of March, 2005

     
Attest:
  PHILADELPHIA CONSOLIDATED HOLDING CORPORATION’S
 
   

  Following member Companies:
 
   

  PHILADELPHIA INDEMNITY INSURANCE COMPANY
 
   

  PHILADELPHIA INSURANCE COMPANY

     
Thomas R. Herendeen
  Christopher J. Maguire
 
   
Vice President
  Exec. VP & Chief U/W Officer

And in Armonk, New York, this 9th day of February, 2005.

          Attest:   SWISS REINSURANCE AMERICA CORPORATION
 
       
Pete Thompson
      Matt Weber
 
       
Vice President
      Senior Vice President

No. TP1600E, F
Addendum No. 2