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HARLEYSVILLE GROUP COMPLETES ACQUISITION OF LAKE STATES INSURANCE COMPANY

 HARLEYSVILLE, Pa., Nov. 2 /PRNewswire/ -- Harleysville Group Inc. (NASDAQ: HGIC), a regional insurance holding company, has completed the acquisition of Lake States Insurance Company, a Michigan property and casualty subsidiary of American Community Mutual Insurance Company as of Nov. 1, 1993.
 Harleysville Group has purchased all of Lake State's issued and outstanding shares of stock for a purchase price of $44 million.
 "We are enthusiastic about the purchase of Lake States because it allows us to further achieve the strategic geographical diversification we have sought since initiating our strategy of building a `national network of regional insurance companies' several years ago," commented Bradford W. Mitchell, chairman of the board and chief executive officer of Harleysville Group. "This company will fit well in our network and will help Harleysville Group establish a firm presence in Michigan and the Midwest."
 Lake States Insurance Company, headquartered in Traverse City, Mich., is represented by 218 independent insurance agents and writes a broad mix of property and casualty insurance business. In 1992, the company had $57.3 million in direct written premiums and a statutory combined ratio of 99.3 percent. Approximately 55 percent of its 1992 business was derived from personal lines and approximately 45 percent from commercial insurance lines. On a statutory basis, Lake States' year end 1992 assets totalled $70.6 million, while capital and surplus stood at $20.4 million. The company currently writes business only in Michigan, but is also licensed in Indiana and has licenses pending in Illinois, Ohio and Wisconsin.
 Management said it does not expect Lake States to be a participant in the intercompany pooling agreement between Harleysville Group and Harleysville Mutual Insurance Company. Therefore, 100 percent of Lake States' operating results would be included in Harleysville Group's earnings.
 "Based on Lake States' record of profitability, we expect this new acquisition to have a positive impact on Harleysville Group's results within the first year," Mitchell concluded.
 Harleysville Group Inc. is a regional holding company for six property and casualty insurance companies whose marketing territory encompasses the entire East Coast. The companies include: Connecticut Union Insurance Company, Harleysville-Atlantic Insurance Company, Harleysville Insurance Company of New Jersey, Huron Insurance Company, New York Casualty Insurance Company and Worcester Insurance Company. Harleysville Group also manages the operations of Harleysville Mutual Insurance Company and its wholly owned subsidiaries, as well as Berkshire Mutual Insurance Company. The financial results of these managed companies are not consolidated into Harleysville Group. Harleysville Group's property/casualty subsidiaries are rated A+ (Superior) by the A.M. Best Company.
 /delval/
 -0- 11/2/93
 /CONTACT: Frederick W. Baker (media), 215-256-5287, or Mark R. Cummins (financial), 215-256-5025, or Bruce J. Magee (financial), 215-256-5011, of Harleysville Group/
 (HGIC)


CO: Harleysville Group Inc.; Lake States Insurance Company ST: Pennsylvania, Michigan IN: INS SU: TNM

MP-MJ -- PH028 -- 9779 11/02/93 16:01 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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