<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                For the Quarterly Period Ended September 30, 1999

                         COMMISSION FILE NUMBER 0-22280

                     PHILADELPHIA CONSOLIDATED HOLDING CORP.
             (Exact name of registrant as specified in its charter)

PENNSYLVANIA                                             23-2202671
(State of Incorporation)                       (IRS Employer Identification No.)

                            ONE BALA PLAZA, SUITE 100
                         BALA CYNWYD, PENNSYLVANIA 19004
                                 (610) 617-7900
                   -------------------------------------------
               (Address, including zip code and telephone number,
       including area code, of registrant's principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES [x] NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of November 11, 1999.

Preferred Stock, $.01 par value, no shares outstanding Common Stock, no par
value, 12,536,438 shares outstanding


<PAGE>   2
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
                                      INDEX

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

<TABLE>
<S>                                                                              <C>
Part I - Financial Information

         Consolidated Balance Sheets  - September 30, 1999 and
           December 31, 1998                                                         3


         Consolidated Statements of Operations - For the three
           and nine months ended September 30, 1999 and 1998                         4


         Consolidated Statements of Comprehensive Income - For
           the three and nine months ended September 30, 1999 and 1998               5


         Consolidated Statements of Changes in Shareholders' Equity - For the
           nine months ended September 30, 1999 and year ended
           December 31, 1998                                                         6


         Consolidated Statements of Cash Flows - For the nine
           months ended September 30, 1999 and 1998                                 7-8


         Notes to Consolidated Financial Statements                                  9

         Management's Discussion and Analysis of Results of Operations and
           Financial Condition                                                   10-15

Part II - Other Information                                                         16

Signatures                                                                          17

Exhibits                                                                            18
</TABLE>



                                       2
<PAGE>   3
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                    As of
                                                         -----------------------------
                                                         September 30,    December 31,
                                                             1999             1998
                                                             ----             ----
                                                         (Unaudited)

                ASSETS
INVESTMENTS:
<S>                                                      <C>              <C>
   FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
     (AMORTIZED COST $310,568 AND $278,557) .......       $ 304,501        $ 283,718
   EQUITY SECURITIES AT MARKET (COST $42,241
     AND $43,441) .................................          64,157           72,768
                                                          ---------        ---------
       TOTAL INVESTMENTS ..........................         368,658          356,486

   CASH AND CASH EQUIVALENTS ......................          45,579           31,573
   ACCRUED INVESTMENT INCOME ......................           4,088            3,771
   PREMIUMS RECEIVABLE ............................          30,399           27,769
   PREPAID REINSURANCE PREMIUMS AND
   REINSURANCE RECEIVABLES ........................          53,301           22,892
   DEFERRED ACQUISITION COSTS .....................          24,443           16,853
   PROPERTY AND EQUIPMENT .........................          10,015            4,877
   GOODWILL-LESS ACCUMULATED AMORTIZATION
     OF $2,064 AND $1,669 .........................          29,254              416
   OTHER ASSETS ...................................           7,041            4,561
                                                          ---------        ---------
     TOTAL ASSETS .................................       $ 572,778        $ 469,198
                                                          =========        =========


     LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS:

   UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES .......       $ 186,111        $ 151,150
   UNEARNED PREMIUMS ..............................         109,884           64,787
                                                          ---------        ---------
       TOTAL POLICY LIABILITIES AND ACCRUALS ......         295,995          215,937
   PREMIUMS PAYABLE ...............................           5,614
   OTHER LIABILITIES ..............................          17,651            9,463
   DEFERRED INCOME TAXES ..........................             504            7,410
                                                          ---------        ---------
     TOTAL LIABILITIES ............................         319,764          232,810
                                                          ---------        ---------


MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES:
   COMPANY OBLIGATED MANDATORILY REDEEMABLE
   PREFERRED SECURITIES OF SUBSIDIARY TRUST HOLDING
   SOLELY DEBENTURES OF COMPANY ...................          98,905           98,905
                                                          ---------        ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   PREFERRED STOCK, $.01 PAR VALUE,
     10,000,000 SHARES AUTHORIZED,
     NONE ISSUED AND OUTSTANDING
   COMMON STOCK, NO PAR VALUE,
     50,000,000 SHARES AUTHORIZED, 13,368,597 AND
     12,330,825 SHARES ISSUED .....................          69,322           44,796
   NOTES RECEIVABLE FROM SHAREHOLDERS .............          (1,681)          (1,680)
   ACCUMULATED OTHER COMPREHENSIVE INCOME .........          10,302           22,417
   RETAINED EARNINGS ..............................          89,712           74,923
   LESS COST OF COMMON STOCK HELD IN TREASURY,
     860,403 AND 130,262 SHARES ...................         (13,546)          (2,973)
                                                          ---------        ---------
       TOTAL SHAREHOLDERS' EQUITY .................         154,109          137,483
                                                          ---------        ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........       $ 572,778        $ 469,198
                                                          =========        =========
</TABLE>


   The accompanying notes are an integral part of the consolidated financial
                                  statements.



                                       3
<PAGE>   4
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  For the Three Months                  For the Nine Months
                                                                   Ended September 30,                   Ended September 30,
                                                                 1999               1998               1999             1998
                                                                 ----               ----               ----             ----
REVENUE:
<S>                                                          <C>               <C>                 <C>                 <C>
   NET WRITTEN PREMIUMS ..............................       $     49,180      $     41,681        $    137,467        $    104,359
   CHANGE IN NET UNEARNED PREMIUMS
      (INCREASE) .....................................             (3,972)           (9,516)            (16,342)            (15,617)
                                                             ------------      ------------        ------------        ------------
   NET EARNED PREMIUMS ...............................             45,208            32,165             121,125              88,742
   NET INVESTMENT INCOME .............................              5,411             4,446              15,261              10,876
   NET REALIZED INVESTMENT GAIN ......................                 48             1,609               5,241               1,708
   OTHER INCOME ......................................              1,999                57               1,999                 171
                                                             ------------      ------------        ------------        ------------
     TOTAL REVENUE ...................................             52,666            38,277             143,626             101,497
                                                             ------------      ------------        ------------        ------------

LOSSES AND EXPENSES:

   LOSS AND LOSS ADJUSTMENT EXPENSES .................             40,082            20,034              87,578              53,661
   NET REINSURANCE RECOVERIES ........................             (7,430)           (2,596)            (13,049)             (5,416)
                                                             ------------      ------------        ------------        ------------
   NET LOSS AND LOSS ADJUSTMENT EXPENSES .............             32,652            17,438              74,529              48,245
   ACQUISITION COSTS AND OTHER
        UNDERWRITING EXPENSES ........................             14,958            10,159              38,822              27,565
   OTHER OPERATING EXPENSES ..........................              2,728               530               4,024               1,715
                                                             ------------      ------------        ------------        ------------
     TOTAL LOSSES AND EXPENSES .......................             50,338            28,127             117,375              77,525
                                                             ------------      ------------        ------------        ------------

MINORITY INTEREST:  DISTRIBUTIONS ON COMPANY OBLIGATED
MANDATORILY REDEEMABLE PREFERRED SECURITIES OF
SUBSIDIARY TRUST .....................................              1,811             1,742               5,434               2,959
                                                             ------------      ------------        ------------        ------------

INCOME BEFORE INCOME TAXES ...........................                517             8,408              20,817              21,013
                                                             ------------      ------------        ------------        ------------

INCOME TAX EXPENSE (BENEFIT):

   CURRENT ...........................................               (476)            2,363               5,987               5,826
   DEFERRED ..........................................                381               (31)                 41                (248)
                                                             ------------      ------------        ------------        ------------

     TOTAL INCOME TAX EXPENSE (BENEFIT) ..............                (95)            2,332               6,028               5,578
                                                             ------------      ------------        ------------        ------------

     NET INCOME ......................................       $        612      $      6,076        $     14,789        $     15,435
                                                             ============      ============        ============        ============

PER AVERAGE SHARE DATA:

   BASIC EARNINGS PER SHARE ..........................       $       0.05      $       0.50        $       1.19        $       1.26
                                                             ============      ============        ============        ============
   DILUTED EARNINGS PER SHARE ........................       $       0.04      $       0.41        $       0.97        $       1.03
                                                             ============      ============        ============        ============

WEIGHTED-AVERAGE COMMON SHARES
   OUTSTANDING .......................................         12,964,320        12,248,331          12,472,743          12,269,595
WEIGHTED-AVERAGE SHARE EQUIVALENTS
   OUTSTANDING .......................................          2,688,167         2,713,348           2,794,694           2,680,099
                                                             ------------      ------------        ------------        ------------
WEIGHTED-AVERAGE SHARES AND SHARE
   EQUIVALENTS OUTSTANDING ...........................         15,652,487        14,961,679          15,267,437          14,949,694
                                                             ============      ============        ============        ============
</TABLE>


   The accompanying notes are an integral part of the consolidated financial
                                  statements.



                                       4
<PAGE>   5
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (IN THOUSANDS)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             For the Three Months       For the Nine Months
                                                                             Ended September 30,        Ended September 30,
                                                                              1999         1998         1999          1998
                                                                              -----        ----         ----          ----
<S>                                                                        <C>          <C>          <C>              <C>
NET INCOME .........................................................       $    612        $  6,076        $ 14,789        $ 15,435
                                                                           --------        --------        --------        --------
OTHER COMPREHENSIVE LOSS, NET OF TAX:
  HOLDING GAIN (LOSS) ARISING DURING PERIOD, NET OF TAX  OF ($2,206)
  AND ($4,689) FOR 1999, AND ($1,585) AND $336 FOR 1998 ............         (4,097)         (2,943)         (8,708)            624
   RECLASSIFICATION ADJUSTMENT, NET OF TAX OF
   $17 AND $1,834 FOR 1999, AND $563 AND $598 FOR
   1998 ............................................................            (31)         (1,046)         (3,407)         (1,110)
                                                                           --------        --------        --------        --------
OTHER COMPREHENSIVE LOSS ...........................................         (4,128)         (3,989)        (12,115)           (486)
                                                                           --------        --------        --------        --------

COMPREHENSIVE INCOME (LOSS) ........................................       $ (3,516)       $  2,087        $  2,674        $ 14,949
                                                                           ========        ========        ========        ========
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                       5
<PAGE>   6
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF CHANGES
                             IN SHAREHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                       For the Nine Months    For the Year Ended
                                                       Ended September 30,    December 31,
                                                             1999                 1998
                                                             ----                 ----
                                                          (Unaudited)

COMMON STOCK:
<S>                                                       <C>                 <C>
   BALANCE AT BEGINNING OF PERIOD .................       $  44,796           $  42,788
   ISSUANCE OF SHARES PURSUANT TO ACQUISITION
     AGREEMENT ....................................          25,000
   ISSUANCE OF SHARES PURSUANT TO EMPLOYEE
     STOCK PURCHASE PLAN ..........................             (48)                853
   EXERCISE OF EMPLOYEE STOCK OPTIONS, NET OF
     TAX BENEFIT ..................................            (426)                597
   PURCHASE CONTRACTS OF COMMON STOCK .............                                 558
                                                          ---------           ---------
       BALANCE AT END OF PERIOD ...................          69,322              44,796
                                                          ---------           ---------

NOTES RECEIVABLE FROM SHAREHOLDERS:

   BALANCE AT BEGINNING OF PERIOD .................          (1,680)             (1,422)
   NOTES RECEIVABLE ISSUED PURSUANT TO
     EMPLOYEE STOCK PURCHASE PLAN .................            (539)               (828)
   SHARES FORFEITED PURSUANT TO EMPLOYEE STOCK
     PURCHASE PLAN ................................              50
   COLLECTION OF NOTES RECEIVABLE .................             488                 570
                                                          ---------           ---------
       BALANCE AT END OF PERIOD ...................          (1,681)             (1,680)
                                                          ---------           ---------


ACCUMULATED OTHER COMPREHENSIVE INCOME:

     BALANCE AT BEGINNING OF PERIOD ...............          22,417              15,023
     CHANGE IN UNREALIZED INVESTMENT APPRECIATION
       (DEPRECIATION), NET OF DEFERRED INCOME TAXES         (12,115)              7,394
                                                          ---------           ---------
       BALANCE AT END OF PERIOD ...................          10,302              22,417
                                                          ---------           ---------

RETAINED EARNINGS:

   BALANCE AT BEGINNING OF PERIOD .................          74,923              54,895
   NET INCOME .....................................          14,789              20,028
                                                          ---------           ---------
       BALANCE AT END OF PERIOD ...................          89,712              74,923
                                                          ---------           ---------

COMMON STOCK HELD IN TREASURY:

   BALANCE AT BEGINNING OF PERIOD .................          (2,973)
   COMMON SHARES REPURCHASED ......................         (11,933)             (3,100)
   ISSUANCE OF SHARES PURSUANT TO EMPLOYEE
     STOCK PURCHASE PLAN ..........................             645
   EXERCISE OF EMPLOYEE STOCK OPTIONS, NET OF
     TAX BENEFIT ..................................             798                 127
   SHARES FORFEITED PURSUANT TO EMPLOYEE STOCK
     PURCHASE PLAN ................................             (83)
                                                          ---------           ---------
       BALANCE AT END OF PERIOD ...................         (13,546)             (2,973)
                                                          ---------           ---------
       TOTAL SHAREHOLDERS' EQUITY .................       $ 154,109           $ 137,483
                                                          =========           =========
</TABLE>





   The accompanying notes are an integral part of the consolidated financial
                                  statements.



                                       6
<PAGE>   7
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       For the Nine            For the Nine
                                                                       Months Ended            Months Ended
                                                                      September 30,           September 30,
                                                                           1999                    1998
                                                                           ----                    ----

<S>                                                                 <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   NET INCOME.............................................          $    14,789              $   15,435
   ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
     PROVIDED BY OPERATING ACTIVITIES:
     NET REALIZED INVESTMENT GAIN .........................              (5,241)                 (1,708)
     DEPRECIATION AND AMORTIZATION EXPENSE.................               2,066                     918
     DEFERRED INCOME TAX EXPENSE (BENEFIT).................                  41                    (248)
     CHANGE IN PREMIUMS RECEIVABLE.........................                 431                 (10,993)
     CHANGE IN OTHER RECEIVABLES...........................             (23,601)                 (2,120)
     CHANGE IN DEFERRED ACQUISITION COSTS..................              (5,109)                 (4,459)
     CHANGE IN OTHER ASSETS................................              (2,218)                   (405)
     CHANGE IN UNPAID LOSS AND LOSS ADJUSTMENT
     EXPENSES..............................................              31,638                  18,759
     CHANGE IN UNEARNED PREMIUMS...........................              28,351                  17,607
     CHANGE IN OTHER LIABILITIES...........................               4,655                   1,966
                                                                    -----------              ----------
         NET CASH PROVIDED BY OPERATING ACTIVITIES.........              45,802                  34,752
                                                                    -----------              ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   PROCEEDS FROM SALES OF INVESTMENTS IN FIXED
       MATURITIES AVAILABLE FOR SALE.......................              69,644                  50,874
   PROCEEDS FROM MATURITY OF INVESTMENTS IN FIXED
       MATURITIES AVAILABLE FOR SALE.......................              32,799                  12,276
   PROCEEDS FROM SALES OF INVESTMENTS IN EQUITY
       SECURITIES..........................................              28,162                   5,958
   COST OF FIXED MATURITIES AVAILABLE FOR
       SALE ACQUIRED.......................................            (122,949)               (159,111)
   COST OF EQUITY SECURITIES ACQUIRED......................             (20,287)                (23,795)
   PAYMENT FOR ACQUISITION, NET OF CASH ACQUIRED...........              (7,372)
   PURCHASE OF PROPERTY AND EQUIPMENT......................              (1,920)                 (1,383)
                                                                    ------------             -----------
       NET CASH USED BY INVESTING ACTIVITIES...............             (21,923)               (115,181)
                                                                    ------------             -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   PROCEEDS FROM OFFERING OF COMPANY OBLIGATED
        MANDATORILY REDEEMABLE PREFERRED SECURITIES
        OF SUBSIDIARY TRUST................................                                      99,463
   EXERCISE OF EMPLOYEE STOCK OPTIONS, NET
     OF TAX BENEFIT........................................                 373                     409
   COLLECTION OF NOTES RECEIVABLE..........................                 488                     415
   PROCEEDS FROM SHARES PURSUANT TO
     EMPLOYEE STOCK PURCHASE PLAN..........................                  24                      38
   COST OF COMMON STOCK REPURCHASED........................             (10,758)                 (3,100)
                                                                    ------------             -----------
         NET CASH PROVIDED (USED)
         BY FINANCING ACTIVITIES...........................              (9,873)                 97,225
                                                                    ------------             ----------
NET INCREASE  IN CASH AND CASH EQUIVALENTS.................              14,006                  16,796
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD...........              31,573                  11,933
                                                                    -----------              ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................         $    45,579              $   28,729
                                                                    ===========              ==========
CASH PAID DURING THE PERIOD FOR:
   INCOME TAXES............................................         $     7,232              $    5,184
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:
   ISSUANCE OF SHARES PURSUANT TO EMPLOYEE
     STOCK PURCHASE PLAN IN EXCHANGE FOR
     NOTES RECEIVABLE......................................         $       488              $      849
</TABLE>




                                       7
<PAGE>   8
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)

      SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

                                   (Continued)

<TABLE>
<S>                                                                <C>
ACQUISITIONS

FAIR VALUE OF ASSETS ACQUIRED                                      $  77,310
CASH PAID                                                            (25,676)
COMMON STOCK ISSUED                                                  (25,000)
                                                                      -------
LIABILITIES ASSUMED                                                $  26,634
                                                                      ======
</TABLE>


   The accompanying notes are an integral part of the consolidated financial
                                  statements.



                                       8
<PAGE>   9
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.  Basis of Presentation

     The consolidated financial statements as of and for the nine months ended
     September 30, 1999 and 1998 are unaudited, but in the opinion of
     management, have been prepared on the same basis as the annual audited
     consolidated financial statements and reflect all adjustments, consisting
     of normal recurring accruals, necessary for a fair presentation of the
     information set forth therein. The results of operations for the nine
     months ended September 30, 1999 are not necessarily indicative of the
     operating results to be expected for the full year or any other period.
     Certain prior year amounts have been reclassified for comparative purposes.

     These financial statements should be read in conjunction with the financial
     statements and notes as of and for the year ended December 31, 1998
     included in the Company's Annual Report on Form 10-K.

2.   Acquisitions

     On July 16, 1999, Philadelphia Consolidated Holding Corp. (the "Company")
     closed on its acquisition of The Jerger Company, Inc. and Subsidiaries
     ("Jerger") (producers and underwriters of highly specialized mobile home
     and homeowners property and casualty business) through a merger for a
     purchase price of $45,000,000, and a contingent additional amount of up to
     $5,000,000 based upon the future earnings for the acquired business. Of the
     purchase price, $20,000,000 was paid in cash and the balance in 1,037,772
     shares of common stock of the Company. Any contingent additional amount
     will be paid in cash. The acquisition is being accounted for using the
     purchase method of accounting.

3.   Goodwill

     Goodwill resulting from the acquisition of Jerger amounted to $29.2
     million. This amount represents the excess of acquisition costs over the
     fair value of net assets acquired. Goodwill is being amortized on a
     straight-line basis over 20 years.

4.   Earnings Per Share

     Earnings per common share has been calculated by dividing net income for
     the period by the weighted average number of common shares and common share
     equivalents outstanding during the period.

5.   Income Taxes

     The effective tax rate differs from the 35% marginal tax rate principally
     as a result of interest exempt from tax, the dividend received deduction
     and other differences in the recognition of revenues and expenses for tax
     and financial reporting purposes.

6.   Subsequent Event

     During the period October 15, 1999 to October 16, 1999, Hurricane Irene
     struck Florida's southwest and eastern coast. As a result of this
     hurricane, the Company estimates property catastrophe losses in the range
     of $2.4 million to $2.8 million.



                                       9
<PAGE>   10
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION


GENERAL

Although the Company's financial performance is dependent upon its own specific
business characteristics, certain risk factors can affect the profitability of
the Company. These include:

-    Industry factors - Historically the financial performance of the commercial
     property and casualty insurance industry has tended to fluctuate in
     cyclical patterns of soft markets followed by hard markets. In the current
     environment, insurance industry pricing in general continues to be soft;
     however, the Company's strategy is to focus on underwriting profits and
     accordingly the Company's marketing organization is being directed into
     those niche businesses that exhibit the greatest potential for underwriting
     profits.

-    Competition - The Company competes in the commercial property and casualty
     business with other domestic and international insurers having greater
     financial and other resources than the Company.

-    Regulation - The Company's insurance subsidiaries are subject to a
     substantial degree of regulatory oversight, which generally is designed to
     protect the interests of policyholders, as opposed to shareholders.

-    Inflation - Commercial property and casualty insurance premiums are
     established before the amount of losses and loss adjustment expenses, or
     the extent to which inflation may effect such amounts is known.

-    Investment Risk - Substantial future increases in interest rates could
     result in a decline in the market value of the Company's investment
     portfolio and resulting losses and/or reduction in shareholders' equity.

RESULTS OF OPERATIONS (NINE MONTHS ENDED SEPTEMBER 30, 1999 VS. SEPTEMBER 30,
1998)

         Premiums: Gross written premiums grew $60.8 million (42.3%) to $204.4
million for the nine months ended September 30, 1999 from $143.6 million for the
same period of 1998; gross earned premiums grew $50.8 million (40.3%) to $176.8
million for the nine months ended September 30, 1999 from $126.0 million for the
same period of 1998; net written premiums increased $33.1 million (31.7%) to
$137.5 million for the nine months ended September 30, 1999 from $104.4 million
for the same period of 1998; and net earned premiums grew $32.4 million (36.5%)
to $121.1 million in 1999 from $88.7 million in 1998. The overall growth in
premiums is primarily attributable to the following factors:

-    Expansion of marketing efforts relating to commercial package, specialty
     lines and specialty property and inland marine products through the
     increase in the Company's field organization of approximately 36% to a
     total of 187 professionals. The respective gross written and net written
     premium increases for commercial package, specialty lines and specialty
     property and inland marine products for the nine months ended September 30,
     1999 vs. 1998 amount to $7.5 million and $5.0 million for commercial
     package, $14.7 million and $12.1 million for specialty lines, and $18.2
     million and $9.2 million for specialty property and inland marine.

-    The acquisition of The Jerger Company, Inc. ("Jerger") which closed in the
     third quarter 1999, resulting in an increase of $12.9 million and $8.4
     million in gross and net mobile homeowners, preferred homeowners and
     Federal Flood written premiums, respectively.

-    An account which the Company initially underwrote commencing July, 1998 for
     its commercial excess liability product resulted in an increase in gross
     and net written premiums of approximately $3.3 million and $0.8 million,
     respectively.

         Overall premium growth has been offset in part by the Company's
decision not to renew policies in the nursing home and assisting living niches
due to inadequate pricing levels being experienced as a result of market
competition and loss experience emerging at higher than expected levels. As a
result, the aggregate total gross written and net written premiums for the
nursing home and assisting living facility products decreased by $7.0 million
and $6.6 million, respectively.


                                       10
<PAGE>   11
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION

         Net Investment Income: Net investment income approximated $15.3 million
for the nine months ended September 30, 1999 and $10.9 million for the same
period of 1998. Total investments grew to $368.7 million at September 30, 1999
from $335.3 million at September 30, 1998, primarily due to investing the
proceeds from the Company's May 1998 FELINE PRIDES(SM) securities offering and
cash flows provided from operating activities.

         Net Realized Investment Gain: Net realized investment gains were $5.2
million for the nine months ended September 30, 1999 and $1.7 million for the
same period in 1998. This increase was due primarily to the sale of certain
equity securities which produced realized gains amounting to $6.0 million. The
decision to sell equity investments was made so as to lessen the Company's
holdings in certain common stock positions as well as decrease the overall
percentage of investments in common stock securities. The proceeds from the
common stock sales are being reinvested in fixed maturity securities to increase
current investment income.

         Other Income: Other income increased $1.8 million to $2.0 million for
the nine months ended September 30, 1999 from $0.2 million for the same period
of 1998. This increase is due to the acquisition of Jerger, which closed in the
third quarter 1999, and is primarily attributed to commissions earned by Jerger
on homeowners business produced for an unaffiliated insurance company.

         Net Loss and Loss Adjustment Expenses: Net loss and loss adjustment
expenses increased $26.3 million (54.6%) to $74.5 million for the nine months
ended September 30, 1999 from $48.2 million for the same period of 1998 and the
loss ratio increased to 61.5% in 1999 from 54.4% in 1998. The increase in net
loss and loss adjustment expenses was due to the following: a $5.0 million
increase to unpaid loss and loss adjustment expenses for Nursing Home and
Assisted Living commercial multi peril package policies which had been issued in
prior periods due to an increase in the incidence and amount of claims under the
general liability coverage of these policies; $3.4 million for unpaid loss and
loss adjustment expenses related to property catastrophe losses resulting from
Hurricane Floyd and Arizona storms occurring during the third quarter; and a
36.5% growth in net earned premiums.

         Acquisition Costs and Other Underwriting Expenses: Acquisition costs
and other underwriting expenses increased $11.2 million (40.6%) to $38.8 million
for the nine months ended September 30, 1999 from $27.6 million for the same
period of 1998. This increase is due primarily to the growth in net earned
premiums.

         Other Operating Expenses: Other operating expenses increased $2.3
million to $4.0 million for the nine months ended September 30, 1999 from $1.7
million for the same period of 1998. This increase is due to the acquisition of
Jerger, which closed in the third quarter 1999, and is primarily attributed to
the operating expenses of the agency operations of Jerger.

         Income Tax Expense: The Company's effective tax rate for the nine
months ended September 30, 1999 and 1998 was 29.0% and 26.6%, respectively. The
effective rates differed from the 35% statutory rate principally due to
investments in tax-exempt securities. The increase in the effective tax rate is
principally due to the greater relative percentage investment in taxable
securities versus tax-exempt securities.

RESULTS OF OPERATIONS (THREE MONTHS ENDED SEPTEMBER 30, 1999 VS. SEPTEMBER 30,
1998)

         Premiums: Gross written premiums grew $25.5 million (44.1%) to $83.3
million for the three months ended September 30, 1999 from $57.8 million for the
same period of 1998; gross earned premiums grew $24.4 million (51.3%) to $72.0
million for the three months ended September 30, 1999 from $47.6 million for the
same period of 1998; net written premiums increased $7.5 million (18.0%) to
$49.2 million for the three months ended September 30, 1999 from $41.7 million
for the same period of 1998; and net earned premiums grew $13.0 million (40.4%)
to $45.2 million in 1999 from $32.2 million in 1998. The overall growth in
premiums are primarily attributable to the following:

-    Expansion of marketing efforts relating to commercial package, and
     specialty lines products through an approximate 36% increase in the
     Company's field organization to a total of 187 professionals. The
     respective gross written and net written premium increases for commercial
     package, and specialty line products for the three months ended September
     30, 1999 and 1998 amounted to $5.2 million and $4.0 million for commercial
     package, and $4.4 million and $3.7 million for specialty line products.


                                       11
<PAGE>   12
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION

-    The acquisition of Jerger which closed in the third quarter 1999, resulting
     in an increase of $7.8 million and $3.8 million in gross and net mobile
     homeowners, preferred homeowners and Federal Flood written premiums,
     respectively.

-    The continued development and growth of the Company's Specialty Property
     and Inland Marine underwriting organization, which was initiated in 1998.
     The respective gross written premium increase amounted to $6.2 million and
     the Company's Specialty Property and Inland Marine products did not
     significantly add to the increase in net written premiums.

         Overall premium growth has been offset in part by the Company's
decision not to renew policies in the nursing home and assisting living niches
due to inadequate pricing levels being experienced as a result of market
competition and loss experience emerging at higher than expected levels. As a
result, the aggregate total gross written and net written premiums for the
nursing home and assisting living facility products decreased by $2.8 million
and $2.5 million, respectively.

         Net Investment Income: Net investment income approximated $5.4 million
for the three months ended September 30, 1999 and $4.4 million for the same
period of 1998. Total investments grew to $368.7 million at September 30, 1999
from $335.3 million at September 30, 1998, primarily due to cash flows provided
from operating activities.

         Net Realized Investment Gain: Net realized investment gains were
$48,000 for the three months ended September 30, 1999 and $1.6 million for the
same period of 1998. During the third quarter of 1998, the Company realigned the
maturity distribution of certain of its tax-exempt and taxable securities in
order to increase after tax investment income.

         Other Income: Other income increased $1.9 million to $2.0 million for
the three months ended September 30, 1999 from $0.1 million for the same period
of 1998. This increase is due to the acquisition of Jerger, which closed in the
third quarter 1999, and is primarily attributed to commissions earned by Jerger
on homeowners business produced for an unaffiliated insurance company.

         Net Loss and Loss Adjustment Expenses: Net loss and loss adjustment
expenses increased $15.3 million (87.9%) to $32.7 million for the three months
ended September 30, 1999 from $17.4 million for the same period of 1998 and the
loss ratio increased to 72.2% in 1999 from 54.2% in 1998. The increase in net
loss and loss adjustment expenses was due to the following: a $5.0 million
increase to unpaid loss and loss adjustment expenses for Nursing Home and
Assisted Living commercial multi peril package policies which had been issued in
prior periods due to an increase in the incidence and amount of claims under the
general liability coverage of these policies; a $3.4 million to unpaid loss and
loss adjustment expenses for property catastrophe losses resulting from
Hurricane Floyd and Arizona storms occurring during the third quarter; and a
40.4% growth in net earned premiums.

         Acquisition Costs and Other Underwriting Expenses: Acquisition costs
and other underwriting expenses increased $4.8 million (47.1%) to $15.0 million
for the three months ended September 30, 1999 from $10.2 million for the same
period of 1998. This increase was due primarily to the growth in net earned
premiums.

         Other Operating Expenses: Other operating expenses increased $2.2
million to $2.7 million for the three months ended September 30, 1999 from $0.5
million for the same period of 1998. This increase is due to the acquisition of
Jerger, which closed in the third quarter 1999, and is primarily attributed to
the operating expenses of the agency operations of Jerger.

         Income Tax Expense: The Company's effective tax rate for the three
months ended September 30, 1999, excluding the tax benefit of $2.9 million as a
result of the $8.4 million increase in unpaid loss and loss adjustment expenses
as described in the above "Net Loss and Loss Adjustment Expenses" caption, was
31.7% vs. 27.7% for the three months ended September 30, 1998. The increase is
principally due to the greater relative percentage investment in taxable
securities versus tax exempt securities.


                                       12
<PAGE>   13
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION

LIQUIDITY AND CAPITAL RESOURCES

         For the nine months ended September 30, 1999 the Company's investments
experienced unrealized investment depreciation of $12.1 million, net of the
related deferred tax benefit of $6.5 million. At September 30, 1999, the Company
had total investments with a carrying value of $368.7 million, of which 82.6%
consisted of investments in fixed maturity securities, including U.S. treasury
securities and obligations of U.S. government corporations and agencies,
obligations of states and political subdivisions, corporate debt securities,
collateralized mortgage securities and asset backed securities. The
collateralized mortgage securities and asset backed securities consist of short
tranche securities possessing favorable pre-payment risk profiles. The remaining
17.4% of the Company's total investments consisted primarily of publicly traded
common stock securities.

         In July 1999 the Company closed on its acquisition of Jerger. With
respect to this acquisition, $25,675,000 of cash was paid, $20,000,000 in
purchase price and $5,675,000 to pay off certain obligations at closing.

         On September 9, 1999, the Company's Board of Directors authorized the
repurchase of an additional $20.0 million of the Company's Common Stock. This
authorization is in addition to the previously announced $10.0 million Common
Stock buyback authorization. The purchases are made from time to time in the
open market or through privately negotiated transactions. The Company purchased
709,746 shares of common stock during the third quarter 1999 for $11,933,000.

         Capital raised from the Company's May 1998 Feline Prides securities
offering was the source for the above discussed cash payments.

         The Company produced net cash from operations of $45.8 million and
$34.8 million, respectively, for the nine months ended September 30, 1999 and
1998. Management believes that the Company has adequate ability to pay all
claims and meet all other cash needs.

         Risk-based capital is designed to measure the acceptable amount of
capital an insurer should have based on the inherent specific risks of each
insurer. Insurers failing to meet this benchmark capital level may be subject to
scrutiny by the insurer's domiciliary insurance department and ultimately
rehabilitation or liquidation. Based on the standards currently adopted, the
Company's insurance subsidiaries' capital and surplus is in excess of the
prescribed risk-based capital requirements.

YEAR 2000 READINESS DISCLOSURE

         Many existing computer programs use only two digits, instead of four,
to identify a year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create incorrect results on
or after the Year 2000. The "Year 2000" issue affects computer and information
technology systems, as well as non-information technology systems which include
embedded technology such as micro-processors and micro-controllers (or
micro-chips) that have date sensitive programs that may not properly recognize
the year 2000 or beyond. If the systems and products the Company uses are not
properly equipped to identify and recognize the year 2000, information
technology systems and non-information technology systems could fail or create
erroneous results.

         The Company has completed a Year 2000 readiness assessment of
information technology systems and non-information technology systems and have
repaired or replaced systems or components of systems that have been identified
as Year 2000 non-compliant. This process was completed during the first quarter
of 1999 as anticipated by the Company. The Company is not aware of any remaining
Year 2000 issues with respect to systems that is reasonably likely to have a
material adverse effect on operations or financial condition.



                                       13
<PAGE>   14
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION

         The Company has also completed a Year 2000 readiness assessment of
material third parties with whom significant business relationships are
maintained. This process was completed during the second quarter of 1999 as
anticipated by the Company. The Company is not aware of any remaining Year 2000
issues with respect to material third parties that is reasonably likely to have
a material adverse effect on operations or financial conditions. However, the
Company is not in a position to determine whether in fact such third parties
will be affected by Year 2000 issues.

         The total cost associated with required modifications to become Year
2000 compliant has not had a material effect on the Company's operations or
financial condition. The total amount expended on the project through September
30, 1999 was approximately $125,000, which related primarily to the "IT Systems"
and "Non-IT Systems" section. This amount came from the Company's operating
funds.

         The Company has not established contingency plans for non-compliance of
its "IT Systems" or "Non-IT Systems" since the Company has completed its "IT
Systems" and "Non-IT Systems" assessments and have repaired or replaced systems
or components of systems that have been identified as Year 2000 non-compliant.
The Company is not aware of any remaining Year 2000 issues with respect to such
assessments that is reasonably likely to have a material adverse effect on
operating or financial condition. The Company's review of the "Third Parties"
section was completed by June 30, 1999 as anticipated. Presently, the Company is
not aware of any major "Third Party" issues. To the extent that the Company
becomes aware of a non-compliant material "Third Party" a contingency plan would
be developed which would potentially include replacing non-compliant material
"Third Party" vendors or suppliers.

         The Company uses computer systems in virtually all aspects of its
business and maintains relationships with a number of vendors, suppliers and
customers whose own state of readiness with regard to the Year 2000 issue could
potentially have an impact. These parties include software, hardware, and
telecommunication providers, banks and investment brokers, reinsurers and
reinsurance intermediaries, certain agents and utilities. The failure to correct
a material Year 2000 issue or a material third party issue could adversely
impact operations, liquidity, and financial position. Due to the uncertainty
inherent in the Year 2000 issue, the Company is unable to determine whether the
consequences of Year 2000 failures will have a material impact on the statement
of operations, liquidity or financial position. However, it is believed that
with the completion of the Year 2000 project the risk of significant
interruptions of operations should be reduced.

         Additionally, the Company issues professional liability coverage,
including directors and officers liability, and commercial multi-peril insurance
policies. Coverage under certain of these policies may cover losses suffered by
insureds as a result of the Year 2000 issues. Professional liability policies
are written on a "claim made and reported" basis. Since early 1997 approximately
50% of these policies have included a Year 2000 exclusion endorsement. The
Company includes a Year 2000 exclusion endorsement on virtually all new or
renewing professional liability policies providing coverage effective January 1,
1999 and thereafter. On occasion, for qualifying accounts, the Company's
underwriters may remove the exclusion after receipt and review of a satisfactory
supplemental application (which includes a warranty statement) and other
underwriting information. With respect to commercial multi-peril policies, the
Company believes that it should not be held liable for claims arising from the
Year 2000 issue under comprehensive general liability policies. However, the
Company cannot determine whether or to what extent courts may find liability for
such claims. Additionally, expenses could be incurred to contest Year 2000 issue
coverage claims, even if the Company prevails in its position. As a result, it
cannot presently be determined what, if any, insurance exposure ultimately
exists for Year 2000 issue claims.

         There can be no assurances that such Year 2000 issues will not
materially adversely affect the Company.



                                       14
<PAGE>   15
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
                                   CONDITION

FORWARD-LOOKING INFORMATION

Certain information included in this report and other statements or materials
published or to be published by the Company are not historical facts but are
forward-looking statements relating to such matters as anticipated financial
performance, business prospects, technological developments, new and existing
products, expectations for market segment and growth, the impact of Year 2000
issues, and similar matters. In connection with the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, the Company provides the
following cautionary remarks regarding important factors which, among others,
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance, development, results of the Company's business, and the
other matters referred to above include, but are not limited to: (i) changes in
the business environment in which the Company operates, including inflation and
interest rates; (ii) changes in taxes, governmental laws, and regulations; (iii)
competitive product and pricing activity; (iv) difficulties of managing growth
profitably; (v) catastrophe losses; and (vi) the impact of Year 2000 issues,
including the matters referred to above.



                                       15
<PAGE>   16
            PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities and Use of Proceeds

         Not applicable.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable

Item 5.  Other information

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits

         Exhibit No.               Description

         10.43                     Registration Rights Agreement dated July 9,
                                   1999 with Thomas Jerger, Dean Jerger, Richard
                                   M. Jerger, Jr., and Evelyn W. Jerger

         11.0                      Computation of Earnings Per Share

b.       The Company filed the following reports on Form 8-K during the
         quarterly period ended September 30, 1999:

<TABLE>
<CAPTION>
             Date of Report                  Item Reported
             --------------                  -------------
<S>                                     <C>
             July 29, 1999              Acquisition of The Jerger Company, Inc.

             September 29, 1999         Amendment No. 1 to Form 8-K as filed July 29, 1999
</TABLE>



                                       16
<PAGE>   17
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       PHILADELPHIA CONSOLIDATED HOLDING CORP.
                                       Registrant

Date      November 12, 1999            /s/ James J. Maguire
          --------------------         ------------------------------------
                                       James J. Maguire
                                       Chairman of the Board of Directors,
                                       and Chief Executive Officer
                                       (Principal Executive Officer)

Date      November 12, 1999            /s/ Craig P. Keller
          --------------------         ------------------------------------
                                       Craig P. Keller
                                       Senior Vice President, Secretary,
                                       Treasurer and Chief Financial Officer
                                       (Principal Financial and Accounting
                                       Officer)



                                       17