Several events stand out in the history of Harleysville Insurance. There was its launch as an auto theft protection association in 1915 in the Pennsylvania community whose name it shares and there was its debut as a public company in 1986.
The year 2003 was also an historic year but not one the company wants to recall. That was when years of insurer acquisitions, inconsistent underwriting, and inadequate systems caught up with it. The company had to boost its loss reserves by $119 million. Its combined loss ratio that year skyrocketed to 123.2. The company reported a net loss of $47.6 million or $1.59 per share.
If changes now in place at Harleysville succeed, 2006 could be another historic year, a year when company officials will have the improved financial results to wipe out the bad memories of 2003.
Michael L. Browne, a former Pennsylvania insurance commissioner from 1980 to 1983, a former partner in the law firm of ReedSmith in Philadelphia and long time member of Harleysville’s board of directors, took over as chief executive officer at Harleysville Group and president and chief executive officer of Harleysville Mutual in February of last year. His mission has been to “restore the company to its past levels of financial performance.”
2004 results; 2006 targets Preliminary results for 2004 suggest the company is making progress. Net income per share for the nine months ended Sept. 30, 2004, was $1.17, compared to a $0.93 per share loss in 2003. For the third quarter 2004, the net income per share was $0.29 versus a loss of $1.16 last year. Operating income per share for the nine months was $0.89; for the third quarter, $0.29. The 2004 nine month combined ratio was 106.4 percent; 106.6 percent for the third quarter. There was some commercial lines premium growth.
“Our third quarter results show that we continue to improve,” Browne said.
During a recent meeting with analysts, Browne was upbeat that things are on the right track. “With the activities we have underway, I am confident we can drive our combined ratio lower and, over time, close the gap that currently exists between our results and those of our competitors,” the CEO said.
Later, in an interview with Insurance Journal, Browne affirmed some of his financial targets: