**Exhibit
      10.35**




June
        24,
        2005
 
 
 Richard
        DeCoux
 Senior
        Vice President
 
 Dear
        Richard,
 
 The
        purpose of this letter is to extend to you an employment retention offer
        to
        continue your employment with PMA Capital Insurance Company ( “ PMAIC ” ) beyond
        your current employment retention period, which began on January 12, 2004
        and
        will end on July 11, 2005
 (
“
        Current Eligibility Date ” ), under the terms and conditions of the Amended and
        Restated PMA Capital Insurance Company Employee Retention Plan ( “ Retention
        Plan ” ).
 
 In
        consideration for your agreement to continue your employment with PMACIC
        for the
        period beginning July 12, 2005 and ending on January 1, 2007 ( “ New Eligibility
        Date ” ), you will be eligible to receive a lump sum retention bonus equal to
        thirty percent (30%) of your salary as defined in the Retention Plan. Subject
        to
        the terms of the Retention Plan, the payment of your lump sum retention bonus
        will be made to you, in the following increments, twenty percent (20%) on
        January 2, 2006 and ten percent (10%) on April 2, 2006. In 2006 you will
        be
        eligible to participate in PMA Re’s Executive Incentive Program, if you maintain
        your eligibility under the Retention Plan, on January 1, 2007.
 
 Your
        Current Eligibility Date remains unchanged and you remain eligible to receive
        the retention bonus of ten percent (10%) of your salary as outlined in your
        retention bonus payment letter dated July 15, 2004, whether or not you accept
        this offer. If you decline to accept this offer or fail to accept it in writing
        by June 30, 2005, your employment will terminate on your Current Eligibility
        Date and you will be eligible for severance under the terms and conditions
        of
        the Amended and Restated PMA Capital Insurance Company Severance Pay Plan
        (the “
Severance Pay Plan ” ).
 
 Whether
        or not you accept this offer, you should carefully read the Retention Plan
        and
        Severance Pay Plan.
 
 We
        would
        like to call your attention to several Severance Pay Plan provisions. If
        you
        receive an offer of employment from PMA Capital Corporation or any of its
        affiliates other than PMA Capital Insurance Company or PMA Re Management
        Company
        on or before your New Eligibility Date and accept such offer of employment,
        your
        Severance Pay Plan eligibility terminates upon such acceptance.
 
 
 
 
 
 
 
 If
        an
        offer of employment is made to you by PMA Capital Corporation or any of its
        affiliates other than PMA Capital Insurance Company or PMA Re Management
        Company
        and you do not accept such offer of employment, your eligibility under the
        Severance Pay Plan will continue provided you comply with the Severance Pay
        Plan
        terms and conditions. In addition, if you complete your extended employment
        retention period in accordance with the Retention Plan, you will remain eligible
        to receive on January 1, 2006, the benefits you have earned through December
        31,
        2005 under the Severance Pay Plan, provided you comply with the terms and
        conditions of such Plan.
 
 To
        accept
        this offer, you must return a copy of this letter with your original signature
        and date to John N. Stulak, Vice President, Human Resources, The PMA Insurance
        Group no later than close of business Thursday, June 30, 2005. If we do not
        receive your acceptance in the manner described on or before the deadline,
        this
        offer shall be deemed automatically withdrawn without further notice or
        action.
 
 Thank
        you
        for your consideration of our offer.
 
 Sincerely,
 
 /s/
          Vincent T. Donnelly
 Vincent
        T. Donnelly
 President
        and CEO
 
 I
        acknowledge that I read this offer letter, understand and have voluntarily
        agreed to sign it.
 
 
 /s/
          Richard DeCoux June
          28, 2005
 Signature        Date
 
 
 Please
        retain a copy of this offer letter for your records.