Harleysville Cites Reserve Boost, Isabel For Loss

NU Online News Service, Oct. 27,

The insurer had earlier warned that it expected to post a netloss per share in the $1.15-to-$1.17 range for the quarter becauseof a $55 million loss-reserve hike and claims from HurricaneIsabel.

Breaking down the reserve boost by line, $17 million relates toworkers' comp, $19 million to commercial auto liability, $14million to commercial multiperil and $5 million to personal autoliability, Harleysville had earlier noted. The insurer also said 87percent of the reserve strengthening relates to 1998-to-2002accident years.

On the hurricane front, claims costs from Hurricane Isabel inSeptember were $9.4 million pre-tax, the company noted.

Harleysville's latest financial numbers stand in contrast tofigures reported from the year-ago period. During the 2002 thirdquarter, Harleysville had reported net income of $15.2 million.

On a more positive note, premiums earned for the latest quarterjumped to $209.18 million, compared to $196.52 million posted oneyear ago. Total revenues also increased, to $234.12 million, upfrom $222.29 million recorded during the year-ago period.

Commenting on his company's financial results, Michael Browne,Harleysville chairman of the board, said, "Our third-quarterresults are not acceptable." But he noted the insurer has movedquickly to bolster reserves to maintain the strength and integrityof its balance sheet, "and we are taking the steps necessary toimprove operating results."