Harleysville Cites Reserve Boost, Isabel For Loss

Harleysville Cites Reserve Boost, Isabel For Loss

The insurer had earlier warned that it expected to post a net loss per share in the $1.15-to-$1.17 range for the quarter because of a $55 million loss-reserve hike and claims from Hurricane Isabel.

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

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

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

On a more positive note, premiums earned for the latest quarter jumped to $209.18 million, compared to $196.52 million posted one year ago. Total revenues also increased, to $234.12 million, up from $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-quarter results are not acceptable." But he noted the insurer has moved quickly to bolster reserves to maintain the strength and integrity of its balance sheet, "and we are taking the steps necessary to improve operating results."