United America Indemnity, Ltd.Investor Presentation

January 2005

Safe Harbor statement: United National has filed a registration statement on Form S-4 in connection with the transaction, and United National and Penn-America have mailed a joint proxy statement/prospectus to their respective shareholders in connection with the transaction. Investors and security holders of United National and Penn-America are urged to read the joint proxy statement/prospectus because it contains important information about United National, Penn-America and the transaction. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus at the SEC's web site at http://www.sec.gov. A free copy of the joint proxy statement/prospectus may also be obtained from United National or Penn- America.

United National and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of United National and Penn-America in favor of the transaction.Information regarding the interests of United National's officers and directors in the transaction is included in the joint proxy statement/prospectus. Penn-America and its executive officers and directors may also be deemed to be participants in the solicitation of proxies from the shareholders of United National and Penn- America in favor of the transaction. Information regarding the interests of Penn-America's officers and directors in the transaction is included in the joint proxy statement/prospectus.

In addition to the registration statement on Form S-4 filed by United National in connection with the transaction, and the joint proxy statement/prospectus mailed to the shareholders of United National andPenn- America in connection with the transaction, each of United National and Penn- America file annual, quarterly and special reports, proxy and information statements, and other information with the SEC.Investors may read and obtain a copy of any of these reports, statements and other information at the SEC's public reference rooms located at 450 5th Street, N.W., Washington, D.C., 20549, or any of the SEC's other public reference rooms located in New York and Chicago. Investors should call the SEC at 1-800-SEC-0330 for further information on these public reference rooms. The reports, statements and other information filed by United National and Penn-America with the SEC are also available for free at the SEC's web site at http://www.sec.gov. A free copy of these reports, statements and other information may also be obtained from United National or Penn-America.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Safe Harbor Statement

1

Executive Summary

Overview of United America Indemnity, Ltd. Participants United National Group, Ltd. Penn-America Group, Inc. Penn Independent Corporation

Highlights of UAI Business Combination

Pro Forma Financial Implications and Merits

Concluding Remarks

2

Overview of United America Indemnity, Ltd. Participants

Overview of United National Group, Ltd.

Headquartered outside Philadelphia, PA

44-year operating history of underwriting specialty general liability, professional liability, commercial property and multi-peril insurance

Average combined ratio in last 20 years of 95%, placing UNGL in highest rank within P&C class

Products distributed through 85 wholesale general agents, who in turn access more than 34,000 retail insurance brokers

Niche insureds consist of: Social service agencies Equine mortality Vacant property

Public officials, educators Small businesses (bicycle shops, restaurants) Attorneys, chiropractors and massage parlors

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($ in millions) ($ in millions)

Adjusted GAAP EquityNet Premiums Written

21% CAGR

17% CAGR

Fox Paine Transaction

Fox Paine Transaction

4

Headquartered outside Philadelphia, PA

28-year operating history underwriting specialty general liability, commercial property and multi-peril insurance

Average combined ratio of 98% since going public in 1993

PNG distributes insurance products through 65 wholesale general agents, who in turn access more than 30,000 retail insurance brokers

Niche insureds consist of: Restaurants Non-residential artisan contractors Retail stores

Overview of Penn-America Group, Inc.

Other multi-family dwellings Daycare operations Special event coverage

1993

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($ in millions) ($ in millions)

GAAP EquityNet Premiums Written

21% CAGR 13% CAGR

5

Overview of Penn Independent Corporation

Headquartered outside Philadelphia, PA

57 years of operating history

Primary insurance agency operations include: Delaware Valley Underwriting Authority – Wholesale agency primarily providing insurance policies on an E&S lines

basis for small to middle market businesses Apex – Serves the specialty P&C insurance and reinsurance needs of governmental agencies Summit – A subsidiary of Apex; provides claims administration services for policies written by Apex and other

professional liability providers Stratus – Places insurance for association based programs and unique classes of business PIFSI – Provides premium financing for those who are insured by P&C agents

Source: Company reports.(1) Gross commission received by wholesale general agent less commission paid to retail agents.(2) Excludes non-recurring and extraordinary charges for PIC and subsidiaries historically, shown before realized investment gains/(losses ).

Adjusted EBITDA(2) ($mm)Net Commission Revenues(1) ($mm)

$2

$3

$5

$6

2000 2001 2002 2003

$15$16

$22$25

2000 2001 2002 2003

6

Highlights of UAI Business Combination

Summary of UAI Business Combination Terms

United America Indemnity, Ltd. (NASDAQ/”UNGL”) United National Group, Ltd. Penn-America Group, Inc. (NYSE/”PNG”) Penn-Independent Corp., a privately-held insurance company which owns 31.4% of PNG

and three independent brokerage businesses

$15.375 per PNG share ($156 million)

— $13.875 of UNGL Class A common shares per PNG share (7.9 million UNGL shares) — $1.50 cash per PNG share

$97 million cash transaction

— PNG shares - $13.39 per share for 4.8 million shares of PNG stock (Including options) — Agency businesses - $32 million

First Quarter 2005 Customary regulatory and shareholder approvals for PNG and UNGL

Parent

Base Platform

Acquired / Merged

PNG Public Consideration

PIC Consideration

Expected Closing

Approvals Required

8

Accretive on both an earnings and book value basis

Financial Benefits to the Transaction

9

UNGL UAI Accretion

2003 Earnings Per Share $1.08 $1.31 21.8%2004 YTD Earnings Per Share(1) $0.77 $0.93 20.8%09/30/04 Book Value per Share $14.73 $15.51 5.3%2005E Earnings Per Share 20.8%

(1) Through 9/30/2004Source: United National Form S-4 dated December 16, 2004. Refer to "Opinion of Financial Advisor to the United National Group Board of Directors - Illustrative Pro Forma Earnings Analysis" and " - Other Considerations" for assumptions and other considerations related to Merrill Lynch's analysis.Note: 2005E earnings per share assumes $17.89 weighted average closing UNGL share price, extrapolated between data points on page 66 of the merger proxy.

UAI’s pro forma book value and net operating income are comparable to Philadelphia Consolidated and RLI

Competitive Financial Landscape

$1,976 $1,506$1,163

$606 $588 $559

$417

$140

$0

$250

$500

$750

$1,000

BER MKL HCC PHLY RLI UAI UNGL PNG

Book Value ($mm)

~~~

10

$373 $149$122

$70

$53$49

$28

$17

$0

$20

$40

$60

$80

BER MKL HCC PHLY RLI UAI UNGL PNG

Net Operating Income ($mm)

~~~

Source: Company reports.Note: Financial information is for the last twelve months ended September 30, 2004.

~~~~~~~~~ ~~~

LTM Operating Metrics and Trading Statistics

(1) Based on pro forma UAI book value as of Sept. 30, 2004. (2) Based on UNGL stock price of $17.72 (as of Jan. 21, 2005) and UNGL IBES estimate of $1.85 per share.Source: Company reports, First Call.Note: Financial information is at or for the twelve months ended September 30, 2004. Market statistics as of January 21, 2005.

Gross Written Premiums 5YR EPS Growth Rate ’04E – ’05E EPS Growth

Price / Book Price / 2005E EPS

$690$759

$1,116

UAI RLI PHLY

15% 14% 15%

UAI RLI PHLY

($ in millions)

1.1x

1.7x

2.5x

UAI RLI PHLY

9.6x

14.1x

12.0x

UAI RLI PHLY

11

(2)(1)

62.3%

36.1%

53.1%

UAI RLI PHLY

UAI Management Organization Structure

Businesses will remain separate and retain their identities in the marketplace

United America Indemnity, Ltd.

Chairman- Saul A. FoxCEO – David Bradley

President – Jon SaltzmanCFO – Kevin Tate

United National Group

CEO – Bill Schmidt

Wind River (Bermuda)

CEO – Seth Freudberg

Penn-America Group

CEO – Joe Morris

Penn Independent Corporation

CEO – Bob Lear

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Similar Businesses, Different Distribution Approaches And Clients

Penn-America United National

Business Lines

Client Focus

Wholesale Agents

Average Policy Size

Geographic Focus

Distribution

E & S Proportion

Property PropertyGeneral Liability General LiabilityUmbrella Umbrella

Professional Liability

Specialized Programs & Products Specialized Programs & ProductsCommercial Binding Authority Commercial Binding AuthorityUmbrella Umbrella

Professional LiabilityOther Primary Liability

65 85

30,000 34,000

$2,000 $3,000

Countrywide - Suburban Countrywide – Urban,and Rural Communities Suburban and Rural Communities

Family-run General Agencies General Agencies and Wholesale Brokers

84% 67%

Source: Company reports.

Retail Agents

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60%

70%

80%

90%

100%

110%

170%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004YTD

United National Penn-America Industry Average

Historical Underwriting Performance S

tatu

tory

Co

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Strong Underwriting Performance:

► UNGL has a 95% 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, UNGL 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. 2003 is adjusted for certain expenses related to the acquisition as well as other one-time costs. “UNG 2004 results reported on a GAAP basis to reflect the combined business of its domestic and international operations.”

P&C Industry

Average: 108%

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Differentiated Business Model

Focus on Excess and Surplus Lines – Highest percentage of non-admitted writings of any competitor PNG – 84%, UNGL 67%, Average of Top 20 Comparables – approximately 13%

Focus on general agents, Focus on franchise value UAI is the only dedicated general agent business model 80% - 90% relationships are exclusive or #1 with general agents in non-admitted

markets Average relationship approximates 8 years for UNGL, 10 years for PNG

Opportunistic market approach Small markets (UNGL average premium $3,000, PNG average premium $2,000) Specialty markets (horses, vacant buildings, chiropractors, bike shops)

Less competition and greater defensible platforms have led to outperformance UNGL 20-year compounded book value growth of 17% PNG compounded book value growth of 13% since public offering in 1993

Note: Financial information at or for the twelve months ended September 30, 2004.

A focused approach creates an ability to develop new products, defend markets and grow premium and book value even in the most challenging cycles

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Pro Forma Financial Implications and Merits

UNGL PNG PIC

Pro Forma

Consolidated

Income Statement (1) Gross premiums written $439 $251 NA $690

Net premiums written 257 216 NA 473

Premiums earned & net commissions 207 194 25 426

Net income 28 17 4 49(1)

Balance Sheet (1) Cash & investments $901 $403 $70 $1,201 (1)

Shareholders’ equity 417 140 7 559 (1)

Assets 2,743 526 60 3,297 (1)

AM Best and Market Data Rating “A” (Excellent) “A-” (Excellent) NA

Market capitalization $512 $221 NA 653(1)

Financial Profile of the Combined Business

Source: Company reports, A.M. Best.Note: Financial information at or for the twelve months ended September 30, 2004. Market statistics as of January 21, 2005.(1) On a consolidated basis pro forma for the transaction. Cash is adjusted to reflect cash uses for transaction consideration. Book value

is UNGL book value plus $141mm equity issued for the transaction minus fair-value equity adjustments. PIC is pro forma to adjust for investment in PNG. Pro forma net income is historical for last twelve months and does not reflect transaction adjustments or cost synergies. Market capitalization includes UNGL equity issued to PNG public shareholders.

($ in millions)

17

Competing Group Median

Reinsurance Recoverables to GAAP Equity

Net reinsurance recoverable $925.1 million as of September 30, 2004, a decrease of $119.1 million vs. December 31, 2003 This represents approximately a $900 million (50%) reduction in uncollateralized

recoverables since the Fox Paine investment in 2003

(1) Derived using 9/30/2004 balances per Proxy statement, less previously stated improvements expected from UNGL (per earnings release investor call transcripts)

Note: Net of collateral.Source: Company reports, SNL Financial and management estimates.

6.5x

2.7x2.4x 2.2x

1.6x1.0x 1.0x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

December2002

December2003

June2004

September2004

December2004

Pro forma(1)

Competing Group Median

UAI Pro Forma ProjectedUnited National

December2005

Projected(1)

18

50% Reduction in Net Receivables ($900 million)

Underleveraged Capital Base

UAI’s underleveraged capital base shows an ability to grow without accessing equity markets

2.1x

1.5x 1.4x

0.9x 0.9x 0.9x

0.00x

0.50x

1.00x

1.50x

2.00x

2.50x

A.M. Best Rating

A A+ A A+ A (1)A+

(Debt + Preferred)/Total Capital

34.0% 5.7% 36.2% 21.7%20.0%20.0%

Source: Company reports, A. M. Best.Note: Financial information is at or for the nine months ended September 30, 2004 annualized.(1) UNGL Barbados and US operations rated A (Excellent), PNG and UN Bermuda rated A- (Excellent)

NPW/GAAP Book Value

BER PHLY MKL HCC UAIRLI

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Concluding Remarks

United America Indemnity, Ltd. Growth Strategy

United National & Penn-America United National & Penn Independent

Avoid price competition by emphasizing

specialty programs, small average premiums,

focus on franchise value, and access to

Bermuda or US

Consider leveraging capital base

Combine Functions Investment management

Public company responsibilities

Reinsurance purchasing

Marketing Enable PNG agents access to UNGL products

Evaluate Other Synergies

Opportunity to Partner in Business

Situations

New UNGL products in need of

distribution

New PIC product ideas in need of

insurance market (“ear to the ground”)

Brokerage business

PIC Closer to Newly Arising Surplus Lines

Market Needs

Bring more value to investments in

UNGL product development

capabilities

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United America Indemnity, Ltd.Transaction Highlights

Fox Paine sponsorship, diligence and execution

Partnership of three leaders in excess and surplus lines specialty property & casualty industry

Outstanding historical operational performance and prospects for growth

Longstanding relationships with 150 market-leading general agents

Increased market size, asset base, agency networks and public float

Immediate value creation for shareholders

Increase in financial stability, diversity and strength

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