Harleysville Group

From humble beginnings in the automotive sector, Harleysville Group has risen to become one of the nationÔÇÖs prominent insurers with multi-billion dollar finances┬áThe success story came out of local adversity. Harleysville Insurance came to fruition in 1915, when Alvin Alderfer, concerned by the theft of several Ford sedans, held a meeting of prominent citizens in Harleysville, Pennsylvania. The resulting collaboration formed a protection plan for local vehicles, with members contributing a small membership fee to a fund to pay the costs of recovering or replacing any stolen cars. Changes in state law and customer demands, dovetailed with the addition of new subsidiaries, saw the formation in 1979 of Harleysville Group, while 1986 marked a major milestone with the successful public sale of 2,156,250 shares, affording the Group capital for significant expansion.In 2001, the decision was made to consolidate all the individual companies under the Harleysville name in order to better convey the overall organizationÔÇÖs size, stability and financial strength, unify HarleysvilleÔÇÖs brand, and position the company more prominently in the small commercial marketplace. Consolidated commercial lines premiums now account for more than 80 percent of the organizationÔÇÖs annual premium volume.Today Harleysville has become a leading regional provider of insurance products and services for small and mid-sized businesses, with a raft of additional services to cater for the individual. Harleysville Group offers a broad spectrum of personal and commercial property and casualty insurance of which commercial makes up about 85 percent of polices written. Additional lines of coverage include the homeowner, automotive, commercial multi-peril, and workersÔÇÖ compensation markets. The business is represented by approximately 1,900 employees and works with about 1,500 agencies across 32 states.Success is generally measured by the balance sheet of course, and the Group boasted consolidated assets of $4.1 billion and net written premiums of $1.2 billion in 2007, ranking it among the top 60 US property and casualty insurance groups. Such fruits are hard-earned and the results of a long-standing reputation for creating strong, lasting relationships with customers. These relationships are closely monitored and the business runs an extensive customer satisfaction program on claims, to ensure not only that exceptional levels of quality are constantly maintained but also to carefully engage with customers to better understand their changing needs.The GroupÔÇÖs success can also be traced to its strategic investment technique which has ensured financial liquidity. Mark Cummins, executive vice president, chief investment officer and treasurer of Harleysville Insurance recently outlined HarleysvilleÔÇÖs long-term disciplined approach to managing its fixed maturity portfolio, in which 98 percent of investments are rated ÔÇ£AÔÇØ or better by MoodyÔÇÖs. ÔÇ£Because we have zero direct sub-prime exposure in our investments, Harleysville is in a great position to thrive, even in this tough environment,ÔÇØ he explained. ÔÇ£ItÔÇÖs taken years to build our high quality portfolio, but we did so in order to be prepared for unprecedented environments like we face today.ÔÇ£Our formula for success begins with an experienced, results-driven and prepared professional staff,ÔÇØ he continued. ÔÇ£We then provide our staff with the best information systems available so they can act quickly on opportunities. The final piece of the triangle is the specialized Wall Street contacts we have developed over the years.ÔÇØHe added that the after-tax return on HarleysvilleÔÇÖs $4 billion investment portfolio has consistently provided a solid base for earnings and has helped to drive Harleysville Group Inc.ÔÇÖs return on equity upward, which was 13.8 percent at the end of 2007. ÔÇ£As a result, we have significant financial capability to pay our claims, buy back stock and increase dividends, all of which are watched closely by our stakeholders,ÔÇØ he concluded.Such stability has long proved the foundation for continued development and Harleysville recently launched accessHarleysville//PLSM, its new personal lines policy administration system. The system addresses increasing use of the Web and has been designed by agents, for agents, providing enhanced ease for agents doing business with the Group and highlighting the companyÔÇÖs ongoing commitment to the personal lines sector. The new system has already been rolled out in six states; Delaware, Illinois, New Jersey, Pennsylvania. Rhode Island and Virginia, and quote activity and new business submissions have increased substantially since inception. The Group has also launched its StarAdvantage┬« Businessowners Program (BOP), the first product introduced under the companyÔÇÖs new ÔÇ£StarAdvantageÔÇØ banner. Market segments targeted for this new offering include habitational, mercantile, office, service/processing and wholesalers.ÔÇ£With this brand new product offering, our goal is to provide value to our agents by delivering a comprehensive, competitively priced BOP,ÔÇØ explained Brian Flemming, vice president of marketing and agency relations. ÔÇ£To accomplish that, we evaluated the small business marketplace in terms of both coverages and pricing. As a result of our review, we increased limits for many of our coverages and added some new coverages,ÔÇØ he continued.Another burgeoning area of focus for Harleysville is its inland marine line. Harleysville has already achieved significant expansion in this market in recent times and expectations are high for further growth. Geographically, the business is looking to expand its footprint across the south western states, particularly west of the Mississippi, where a number of regional offices have already been opened.As one might expect, an outstanding workforce has been a cornerstone to HarleysvilleÔÇÖs success. Collaboration, productivity and flexibility are traits that are evident throughout the organization. This work ethic is reinforced through the companyÔÇÖs policy to grant promotions based on merit, comprehensive professional development and training programs, and a strong emphasis on overall performance.The GroupÔÇÖs Care Force initiative enables employees to support organizations and volunteer activities focusing on disadvantaged citizens, housing and neighborhood development, the environment, and education and safety programs.Harleysville has always unflinchingly supported the Independent Agency System and the advantages this distribution system offers to consumers and insurance companies, particularly regional insurers. With intense focus on investment, relationships and employee excellence, Harleysville Group is looking forward to another century of success.