Standard & Poor's Places AA Rating on all PMI Mortgage Insurance Subsidiaries; PMI Australia and PMI Europe Designated ''Core Status'' Outlook Upgraded to Stable from Negative

Business Wire, May 17, 2004

Business Editors

WALNUT CREEK, Calif.--(BUSINESS WIRE)--May 17, 2004

The PMI Group, Inc. (NYSE:PMI) announced today that Standard & Poor's (S&P) placed a AA insurer financial strength rating (stable outlook) on its principal mortgage insurance subsidiaries -- PMI Mortgage Insurance Co., PMI Mortgage Insurance Ltd (PMI Australia) and PMI Mortgage Insurance Company Limited (PMI Europe) -- with a new designation of "core status" for PMI Australia and PMI Europe. In conjunction with these actions, PMI acknowledged that S&P had also placed the senior debt rating of The PMI Group, Inc. at A in accordance with S&P's standard criteria of requiring a one rating category differential between an insurance holding company and its primary insurance subsidiary. There is no adverse impact from these rating changes on PMI's $820 million of capital obligations.

In discussing the rating of PMI Mortgage Insurance Co., S&P highlighted, among other things, the company's very strong capitalization, its strong competitive position and good geographic diversification, while also mentioning that its statutory combined ratio for 2003 of 59.7% was virtually equivalent to the combined ratio of the U.S. mortgage insurance industry.

PMI noted that data published in Inside Mortgage Finance indicated that PMI Mortgage Insurance Co. was the 2nd largest U.S. mortgage insurance company in 2003 in terms of new insurance written.

In PMI's view, these rating actions should enhance the company's strategic diversification efforts by providing for even greater efficiencies in the use of PMI's capital with the continued objective of generating strong returns for shareholders consistent with the company's prudent risk management philosophy. In addition, PMI noted that the AA insurer financial strength rating of PMI Mortgage Insurance Co. by S&P is consistent with S&P's recent ratings trends within the U.S. mortgage insurance industry. Furthermore, PMI noted the holding company's strong capital position, excellent liquidity characteristics and appropriate leverage ratios shown in its March 31, 2004 consolidated balance sheet.

Previously, PMI Mortgage Insurance Co. was rated AA+ with a negative outlook by S&P, while the S&P senior debt rating of The PMI Group, Inc. was A+ with a negative outlook.

PMI Mortgage Insurance Co. is rated AA+ by Fitch and Aa2 by Moody's Investors Service (Moody's). PMI Europe and PMI Australia are both rated AA by Fitch Ratings and Aa3 by Moody's. The PMI Group, Inc.'s senior debt ratings are A1 by Moody's and A+ by Fitch Ratings.

About The PMI Group, Inc.

The PMI Group, Inc. (NYSE:PMI), headquartered in Walnut Creek, California, is an international provider of credit enhancement products that promote homeownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, the company offers residential mortgage insurance and credit enhancement products domestically and internationally, financial guaranty and financial guaranty reinsurance.

Forward-Looking Statements: Statements in this press release that are not historical facts or that relate to future plans, events or performance are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and include statements relating to PMI's use of capital and capital position. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties that could affect PMI and its capital position are discussed in its various Securities and Exchange Commission filings, including its report on Form 10-Q for the quarter ended March 31, 2004. PMI undertakes no obligation to update forward-looking statements.