A.M. Best Affirms Ratings for Harleysville Insurance.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 17, 2003 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) for the property/casualty pooling members of Harleysville Insurance, (Harleysville, PA). Also, A.M. Best has affirmed the "bbb+" debt rating for Harleysville Group Inc.'s (HGIC HGIC Harleysville Group Inc ) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : HGIC) existing senior notes and the indicative ratings of "bbb+" senior debt, "bbb" subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". , "bbb-" trust preferred securities and "bbb-" preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. that are filed as part of its universal shelf registration. The rating outlook for all of the ratings has been changed to stable from positive. The financial strength rating of A- (Excellent) of Harleysville Life Insurance Company is unaffected; its rating outlook remains stable. These rating actions follow the recent announcement that the company would report a net loss for the third quarter 2003 and year-to-date due to loss reserve increases in several lines of business and the cost of claims resulting from Hurricane Isabel This article is about the 2003 hurricane; there was also a Tropical Storm Isabel during the 1985 Atlantic hurricane season Hurricane Isabel was the costliest and deadliest hurricane in the 2003 Atlantic hurricane season. . Despite the losses, the rating affirmation reflects the company's strong capitalization, historical profitability and strong regional market franchise. Offsetting these positive rating factors are A.M. Best's concerns with the operating results reported in 2003 and the potential for continued adverse loss reserve development. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. management, the loss reserve development stems from increased loss severity and different loss patterns since the recent reorganization of the group's claims operations. Moreover, there is some additional uncertainty as respects as regards; with regard to; as to. See also: Respect to Harleysville's leadership and future direction due to the retirement of Harleysville's chairman and chief executive officer at year-end 2003. As a consequence, Harleysville will be without a permanent successor until a replacement is appointed. The change in outlook reflects these uncertainties and is contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent stabilization in prior year reserves and restored profitability. Harleysville is afforded additional financial flexibility through its publicly-traded holding company, HGIC, which has access to the public markets. HGIC maintains modest financial leverage, which is enhanced by excellent cash coverage. The financial strength rating of A (Excellent) has been affirmed for the following property/casualty pooling members of Harleysville Insurance: -- Harleysville Mutual Insurance Company -- Harleysville Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Mid-America Insurance Company -- Harleysville Worcester Insurance Company -- Harleysville-Atlantic Insurance Company -- Harleysville Insurance Company of New Jersey -- Harleysville Insurance Company of Ohio -- Harleysville Insurance Company -- Harleysville Lake States Insurance Company -- Harleysville Preferred Insurance Company -- Harleysville Pennland Insurance Company The financial strength rating of A- (Excellent) of Harleysville Life Insurance Company remains unaffected. The following existing debt ratings have been affirmed: Harleysville Group Inc.-- -- "bbb+" on $75 million 6.75% senior notes, due 2003 -- "bbb+" on $100 million 5.75% senior unsecured notes, due 2013 The following indicative ratings of the universal shelf registration have been affirmed: Harleysville Group Inc.-- -- "bbb+" senior debt -- "bbb" subordinated debt -- Harleysville Group Capital Trust I and II-- "bbb-" preferred securities -- "bbb-" preferred stock A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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