A.M. Best Places Ratings of Harleysville Mutual Insurance Company and Its Subsidiaries Under Review With Positive Implications
30 Setembro 2011 - 12:38PM
Business Wire
A.M. Best Co. has placed the financial strength rating
(FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of
Harleysville Insurance (Harleysville) and its
property/casualty pooling members, including the lead company,
Harleysville Mutual Insurance Company (Harleysville Mutual)
under review with positive implications. All companies are
headquartered in Harleysville, PA, except where specified. (See
below for a detailed list of the companies and ratings.)
The rating actions reflect that Harleysville has entered into
discussions with Nationwide Mutual Insurance Company
(Nationwide Mutual) (Columbus, OH), a significantly larger and
higher rated organization, to merge Harleysville Mutual into
Nationwide Mutual. The transaction remains subject to regulatory
approval and is projected to close during the first quarter of
2012. Harleysville’s ratings will remain under review through the
close of the transaction, allowing time for additional discussions
with management. The under review status reflects Nationwide
Mutual’s geographically complementary distribution channels and the
potentially positive impact of the merger on the current
Harleysville pool, which may be integrated into the Nationwide
Mutual pool on a future date.
Concurrently, the stock of Harleysville’s 46% publicly-traded
downstream holding company, Harleysville Group Inc. (HGIC)
[NASDAQ: HGIC] will be acquired through a holding company within
the Nationwide organization. Subsequent to that transaction, HGIC
will no longer be publicly traded. Accordingly, A.M. Best has
placed the ICR of “bbb” and debt rating of “bbb” on $100 million
5.75% senior unsecured notes, due 2013 under review with positive
implications for HGIC.
Additionally, A.M. Best has placed the FSR of A- (Excellent) and
ICR of “a-” of Harleysville Life Insurance Company
(Harleysville Life) under review with developing implications.
These ratings will remain under review until A.M. Best meets with
management and discusses the strategic plan for Harleysville Life,
going forward.
The FSR of A (Excellent) and ICR of “a” have been placed under
review with positive implications for Harleysville Insurance
and its following property/casualty members:
- Harleysville Mutual Insurance
Company
- Harleysville Insurance Company of
New York
- 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 principal methodology used in determining these ratings is
Best’s Credit Rating Methodology -- Global Life and Non-Life
Insurance Edition, which provides a
comprehensive explanation of A.M. Best’s rating process and
highlights the different rating criteria employed. Additional key
criteria utilized include: “Risk Management and the Rating Process
for Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Rating Members of Insurance Groups”; “A.M. Best’s
Ratings & The Treatment of Debt”; “Understanding BCAR for Life
and Health Insurers”; and ”Equity Credit for Hybrid Securities.”
Methodologies can be found at
www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and
most authoritative insurance rating and information source. For
more information, visit www.ambest.com.
Copyright © 2011 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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