Several readers have commented that an earlier article, which appeared in the IJ on Tuesday, concerned the third quarter results for the Harleysville banking group, rather than the insurance group. The two entities, although sharing the same name, are not related, and the IJ apologizes to its readers for any confusion caused by the report.
The following is the third quarter comment issued by the insurer, Harleysville Group Inc.
The announcement noted that the Group “expects to report a diluted net loss per share in the range of $1.15 to $1.17 in the third quarter of 2003, reflecting loss reserve increases in several business lines and the cost of claims resulting from Hurricane Isabel.” It also takes into account net realized after-tax investment losses of $0.01 per share.
“The company had diluted net income of $0.50 per share in the third quarter of 2002. For the nine months, the company expects a diluted net loss per share in the range of $0.92 to $0.94, compared to diluted net income per share of $0.95 in 2002,” the bulletin continued. “The 2003 result includes realized investment losses of $0.02 per share, compared to $0.44 per share of realized losses in 2002. The third quarter 2003 estimate reflects the addition of $55 million pretax to the company’s loss and loss adjustment reserves for prior accident years, specifically in its workers compensation ($17 million), commercial automobile liability ($19 million), commercial multi-peril ($14 million) and personal automobile liability ($5 million) lines of business.”
Harleysville stressed that “87 percent of the reserve development relates to the 1998 to 2002 accident years.” The Q3 results will also reflect “estimated claims costs of $9.4 million pretax, or $0.20 per share after taxes, from Hurricane Isabel in September.”
Board Chairman Michael L. Browne called the earnings “unnaceptable.” He added that “Harleysville’s board of directors and management are committed to reserve adequacy and to the strength and integrity of our balance sheet. We also are determined to take the steps necessary to improve operating results to appropriate levels.”
“Harleysville Group will release its third quarter 2003 earnings on Friday, October 24, prior to the start of regular trading on the Nasdaq Stock Market,” said the bulletin. “The company will host a live Webcast beginning at 9:00 a.m. (ET) on October 24 to discuss its results. The Webcast will be available from the Investors section of the company’s Web site (www.harleysvillegroup.com). An archive of the presentation will be available until October 24, 2004, on the company’s site.
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