Harleysville Says Reliance, Sept 11 Slowed Growth

Pennsylvania-based Harleysville Group Inc. announced that, despite a charge of approximately 6 cents per share primarily related to a guaranty fund and other assessments resulting from the liquidation of Reliance Insurance Company, it expects full-year 2001 diluted operating earnings of between $1.50 and $1.54 per share, and fourth-quarter 2001 diluted operating earnings of between $0.38 and $0.42 per share.

The company will formally release Q4 results on February 19. Commenting on the preliminary announcement, Walter R. Bateman, chairman, president and CEO, commented that, “We expect our 2001 earnings will surpass our 2000 results. In fact, we would have generated double-digit growth in our underlying earnings if it had not been for two highly unusual events – the acts of terrorism on September 11 and the Reliance insolvency.”

“Even so, our operating results will be significantly better than the industry will report,” Bateman continued. “Our ongoing pricing, underwriting and distribution actions are having a positive impact on commercial lines results. Our commercial lines progress has been offset to some degree by slower progress than we had hoped in our personal lines operations, as we continue to reunderwrite that segment of our business.”