Harleysville Profits Rise Dramatically

February 19, 2010

Investment gains helped Pennsylvania-based insurer Harleysville Group Inc. post a 422 percent increase in fourth-quarter income to $24.2 million, as the insurer nearly doubled its profits to $86.3 million in 2009.

“We’re pleased that we ended 2009 with another strong quarterly performance,” Michael L. Browne, the insurer’s president and chief executive officer said. “Our balance sheet continues to remain very strong, with our book value growing 21 percent from year-end 2008

The company’s fourth quarter net written premiums decreased 2 percent to $210.2 million in 2009, compared to $214.5 million in the same period in 2008. Net written premiums for the year fell 10.3 percent to $851.6 million in 2009, compared to $950.1 million in 2008.

Harleysville Group’s overall combined ratio was 99.1 percent in the fourth quarter of 2009, compared to 98.5 percent in the fourth quarter of 2008. The company had no catastrophe losses in the fourth quarter of 2009, compared to 1.3 points in 2008. For the year, the statutory combined ratio was 99.8 percent in 2009, versus 100.3 percent in 2008.

Commercial lines net written premiums decreased 5.3 percent to $165.1 million in the fourth quarter of 2009. For the the year, net written premiums were down 9.1 percent to $674.3 million. The commercial lines combined ratio was 99.9 percent in the fourth quarter of 2009, versus 98.4 percent in the fourth quarter of 2008.

Personal lines net written premiums were up 12.4 percent to $45.1 million in the fourth quarter of 2009. For the 12 months, net written premiums grew 8.9 percent to $177.3 million. Harleysville Group’s personal lines statutory combined ratio was 96.0 percent in the fourth quarter of 2009, versus 99.0 percent during the fourth quarter of 2008.

“Looking ahead, we will remain focused on the basics of our business — underwriting, claims, service and productivity — in order to retain our best business and generate responsible, profitable growth,” Browne said. “Much of the success we experienced during the past year is a result of our underwriting discipline. In this extremely competitive market, maintaining that discipline is a must. We can’t afford to compromise on underwriting quality, so we are willing to walk away from under-priced business. Bottom line, we are focused on protecting the quality and long-term profitability of all of our business, as we seek to produce results that will continue to differentiate us favorably from our competition.”

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