A.M. Best has affirmed the financial strength rating of A (Excellent) for Harleysville Insurance, Harleysville, Pennsylvania and the “a-” debt rating for Harleysville Group Inc.’s existing senior notes. The rating agency also announced that it had raised the ratings of the Palisades Group of Summit, New Jersey from B+ (Very Good) to B++ (Very Good).
Best’s reports cited Harleysville for its “excellent capitalization, generally solid earnings and its strong regional market franchise.” It also noted “Harleysville’s conservative balance sheet, sound underwriting fundamentals and long-standing agency relationships,” and added that “Under a regional insurer approach, Harleysville benefits from its strong name recognition, extensive local market knowledge and stable market presence. The group continues to find opportunities by broadening its scope beyond traditional Mid-Atlantic and East Coast markets by expanding into the Midwest, subsequently improving its geographic profile, which now spans 31 states. Harleysville ranks among the top 50 property/casualty insurance organizations in the United States.”
In a somewhat related move A.M. Best raised its ratings on Palisades Safety and Insurance Association and its subsidiary, Palisades Insurance Company. It noted that they had “entered into an agreement with Harleysville Garden-State Insurance Company to assume its $17 million New Jersey private passenger automobile book upon renewal, beginning in June 2002. Palisades Safety and Palisades Insurance will receive a total of $4.7 million (after tax) from Harleysville to support the transferred business.”
“The rating reflects the [Palisades] group’s favorable earnings trend, good capital generation and reduced reinsurance dependence. The favorable earnings trend is derived from the group’s focused operating strategy, knowledge of local market conditions and conservative reserving philosophy. Further, management has implemented numerous initiatives to foster long-term profitability and surplus growth to support business needs. These attributes are reflected in the group’s high business persistency, strict underwriting and claim practices and investment in technology to enhance operating efficiencies,” Best’s announcement stated.
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